Slide 1: Q4 2020 Financial Results Conference Call
Q4 2020 Financial Results Conference Call Veeco (Nasdaq: VECO) February 11, 2021
Slide 2: Safe Harbor
Safe Harbor This presentation contains “forward-looking statements”, within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, as amended, that are based on management’s expectations, estimates, projections and assumptions. Words such as “expects,
Slide 3: CEO Overview
CEO Overview William J. Miller, Ph.D.
Slide 4: 2020 – A Year of Progress
2020 – A Year of Progress ▪ Completed Functional Reorganization o Functional Structure, New CFO and Head of Sales & Service o Optimized R&D Investments ▪ Divested Non-core Product Line ▪ Improved Operating Performance (GM%, Opex%, Op Inc.%) ▪ Improved Liquidity and Capital Structure Extending Debt M
Slide 5: FY 2020 Highlights
FY 2020 Highlights $454M $52M 86¢ Revenue Non-GAAP Diluted Operating Income Non-GAAP EPS • 8% top line growth driven by strength in • Diluted EPS increased to $0.86 from ($0.03) Compound Semiconductor and Data Storage markets • $43M in cashflow from operations • Positioned well for growth in 2021 fr
Slide 6: Q4 2020 Highlights
Q4 2020 Highlights $139M $18M 30¢ Revenue Non-GAAP Diluted Operating Income Non-GAAP EPS • Top line driven by strength in • $15M in cashflow from operations Semiconductor and Compound Semiconductor markets • Multi-system laser annealing win for 2nd application step at an advanced logic node • Non-GA
Slide 7: CFO Financial Review
CFO Financial Review John P. Kiernan
Slide 8: End-Market Update
End-Market Update Former End-Markets New End-Markets Semiconductor Front-End Semiconductor (Includes Front End Semiconductor, EUV Mask Blank and Advanced Packaging markets) LED Lighting, Display & Compound Semiconductor (Includes Photonics*, Power Electronics and RF Filter & Compound Semiconductor D
Slide 9: FY 2020 Revenue by Market & Region
FY 2020 Revenue by Market & Region Revenue by Market Revenue by Region Scientific & Other EMEA 13% 16% Rest of 36% Semiconductor 39% APAC China 13% Data Storage 27% $454M 24% 32% Compound Semiconductor Revenue Trend ($M) 2019 2020 United States Semiconductor 176 166 Compound Semi 86 108 Rest of Worl
Slide 10: Q4 2020 Revenue by Market & Region
Q4 2020 Revenue by Market & Region Revenue by Market Revenue by Region Scientific & EMEA Other 12% 12% Data Storage China 14% Semiconductor 14% 41% Rest of 48% $139M APAC United States 26% 33% Compound Semiconductor Revenue Trend ($M) Q4 19 Q3 20 Q4 20 Semiconductor 51 34 57 Compound Semi 28 27 45 R
Slide 11: FY Operating Results
FY Operating Results GAAP Non-GAAP In millions (except per share amounts) FY 19 FY 20 FY 19 FY 20 Revenue $419.3 $454.2 $419.3 $454.2 Gross Profit 158.2 194.3 161.6 196.5 Gross Margin 37.7% 42.8% 38.5% 43.3% Operating Expenses 197.8 171.7 156.5 144.0 Operating Income / (Loss) (39.6) 22.6 5.1 52.5 Ne
Slide 12: Q4 Operating Results
Q4 Operating Results GAAP Non-GAAP In millions (except per share amounts) Q3 20 Q4 20 Q3 20 Q4 20 Revenue $112.1 $138.9 $112.1 $138.9 Gross Profit 49.1 56.8 49.8 57.4 Gross Margin 43.8% 40.9% 44.5% 41.3% Operating Expenses 42.2 46.2 35.7 39.7 Operating Income / (Loss) 7.0 10.6 14.1 17.6 Net Income /
Slide 13: Balance Sheet and Cash Flow Highlights
Balance Sheet and Cash Flow Highlights $ millions Q4 19 Q3 20 Q4 20 Cash & Short-Term Investments 245 310 320 Accounts Receivable 46 80 80 Inventories 133 143 146 Accounts Payable 21 34 34 Long-Term Debt 300 321 321 Cash Flow from Operations 16 10 15 DSO (days) 36 64 52 DOI 177 200 159 DPO 28 49 37
Slide 14: 2020 Capital Restructuring
2020 Capital Restructuring Annual Annual Non- Initial Principal Convertible Debt Coupon Cash Cash Conversion Amount Interest Interest Price As of December 31, Convertible Notes Due Jan 2023 $345M 2.7% $9.3M $12.7 $40.03 2019 Total Convertible Debt $345M 2.7% $9.3M $12.7 Convertible Notes Due Jan 202
Slide 15: Q1 2021 Guidance
Q1 2021 Guidance GAAP Non-GAAP Revenue $115M - $135M $115M - $135M Gross Margin 40% - 42% 40% - 42% Operating Expenses $44M - $46M $37M - $39M Net Income (Loss) $(4M) - $5M $6M - $15M Earnings (Loss) Per Share $(0.09) – $0.09 $0.12 - $0.30 Diluted Shares 49M – 53M 50M 15 Q4 2020 Financial Results Co
Slide 16: CEO Market Update
CEO Market Update William J. Miller, Ph.D.
Slide 17: Significant Market Opportunities
Significant Market Opportunities Market Served Primary Drivers Primary Veeco Technologies Laser Annealing Semiconductor High Performance Computing Ion Beam / AP Lithography Wet Processing Compound 5G / Photonics / MicroLED / Wet Processing Semiconductor Power MOCVD Data Storage Cloud / Data Center I
Slide 18: 2021 Priorities – Building on a Profitable Growth Plan
2021 Priorities – Building on a Profitable Growth Plan Growth Phase of Transformation Maintain Resilience Focus Execute Near-Term Prepare Long-Term essential business profitability & products 2021 growth 2022 & beyond ▪ Employees ▪ Defend foundational businesses ▪ Laser Annealing ▪ Aggressively inve
Slide 19: Making a Material Difference
MAKING A MATERIAL DIFFERENCE &A
Slide 20: Backup & Reconciliation Tables
Backup & Reconciliation Tables
Slide 21: Historical Revenue by End-Market
Historical Revenue by End-Market (New and Former) $M 2018 2019 2020 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Semiconductor 31.7 39.1 33.4 33.7 137.8 44.6 37.8 41.8 51.3 175.6 37.4 37.5 33.6 57.4 165.9 New End-Markets Compound Semi 91.2 91.4 63.2 14.5 260.3 15.0 16.4 26.3 28.1 85.9 18.4 17.7 26.6
Slide 22: Effect of Convertible Notes on Diluted Share Count
Effect of Convertible Notes on Diluted Share Count GAAP Approximate Non-GAAP Approximate Incremental Dilutive Shares Incremental Dilutive Shares (in thousands) (in thousands) Average Stock Price 2025 2027 2025 2027 per Common Share Notes Notes Total Notes Notes Total $15.00 - 609 609 - - - $16.00 -
Slide 23: 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 24: Supplemental Information—GAAP to Non-GAAP Reconciliation
Supplemental Information—GAAP to Non-GAAP Reconciliation In millions Q3 20 Q4 20 2020 2019 In millions, except per share amounts Q3 20 Q4 20 2020 2019 Net Sales $112.1 $138.9 454.2 419.3 GAAP Basic weighted average shares 48.3 48.3 48.4 47.5 GAAP Gross Profit 49.1 56.8 194.3 158.2 GAAP Diluted weigh
Slide 25: Q4 2020 Actual: GAAP to Non-GAAP Reconciliation
Q4 2020 Actual: GAAP to Non-GAAP Reconciliation Non-GAAP Adjustments Share-Based In millions, except per share amounts GAAP Compensation Amortization Other Non-GAAP Net Sales $138.9 $138.9 Gross Profit 56.8 0.5 57.4 Gross Margin 40.9% 41.3% Operating Expenses 46.2 (2.6) (3.8) (0.1) 39.7 Operating In
Slide 26: 2020 Actual: GAAP to Non-GAAP Reconciliation
2020 Actual: GAAP to Non-GAAP Reconciliation Non-GAAP Adjustments Share-Based In millions, except per share amounts GAAP Compensation Amortization Other Non-GAAP Net Sales $454.2 $454.2 Gross Profit 194.3 1.9 0.3 196.5 Gross Margin 42.8% 43.3% Operating Expenses 171.7 (10.8) (15.3) (1.5) 144.0 Opera
Slide 27: Q1 2021 Guidance: GAAP to Non-GAAP Reconciliation
Q1 2021 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 $115–$135 $115–$135 Gross Profit 47–58 — — — 47–58 Gross Margin 40%–42% 40%–42% Operating Expenses $44–$46 (3) (4) — $37–$3
Slide 28: Thank You
MAKING A MATERIAL DIFFERENCE *