Slide 1: Q4 & FY 2022 Financial Results Conference Call
Q4 & FY 2022 Financial Results Conference Call Veeco (Nasdaq: VECO) February 15, 2023 1 Q4 & FY 2022 Financial Results Conference Call Copyright © 2023 Veeco Instruments Inc. All Rights Reserved.
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 Bill Miller, Ph.D. 3 Q4 & FY 2022 Financial Results Conference Call Copyright © 2023 Veeco Instruments Inc. All Rights Reserved.
Slide 4: 2022 – A Year of Progress
2022 – A Year of Progress ✓ Progress in laser annealing, IBD for semi, power, photonics Solidly Executing Multi-Year ✓ Robust evaluation program in place with high customer acceptance rate Growth Strategy ✓ San Jose expansion – Completed ✓ 11% overall revenue growth for Company Achieved Leveraged Gr
Slide 5: FY 2022 Highlights
FY 2022 Highlights Revenue $646M • 11% YoY revenue growth • Record year of semiconductor revenue • Up 50% YoY • Led by Laser Annealing Non-GAAP Operating Income $100M • Backlog grew by $60M to $500M • $108M in CFFO • Mixed demand environment Diluted Non-GAAP EPS $1.57 • Supply chain challenges persi
Slide 6: Q4 2022 Highlights
Q4 2022 Highlights Revenue $154M • Semiconductor momentum continues • $33M in CFFO • Mixed demand environment Non-GAAP Operating Income $24M • Supply chain challenges persist with signs of improvement Diluted Non-GAAP EPS 38¢ Solid quarter in a challenging environment 6 Q4 & FY 2022 Financial Result
Slide 7: Veeco Acquires Epiluvac – Deal Rationale
Veeco Acquires Epiluvac – Deal Rationale Accelerated Access to High-Growth SiC Markets • Veeco to enter SiC market faster 1 • Epiluvac’s team along with Veeco’s capability will fast-track product roadmap execution Complementary Technology and Capabilities • Epiluvac’s system achieves high productivi
Slide 8: Epiluvac Extends Veeco’s Reach into SiC Epitaxy Market
Epiluvac Extends Veeco’s Reach into SiC Epitaxy Market ▪ Rapidly growing demand for SiC devices driven by multiple strong and stable end-markets including automotive, industrial and energy ▪ SiC device market is expected to experience significant growth translating into strong demand for SiC epitaxy
Slide 9: Veeco Acquires Epiluvac – Transaction Overview
Veeco Acquires Epiluvac – Transaction Overview ▪ Veeco acquired Epiluvac AB, a privately held Swedish manufacturer of Silicon Carbide (SiC) epitaxy systems ▪ Purchase price is $30 million of cash upfront from Veeco’s balance sheet ▪ Additional performance based earn-outs up to $35 million ▪ Transact
Slide 10: CFO Financial Review
CFO Financial Review John Kiernan 10 Q4 & FY 2022 Financial Results Conference Call Copyright © 2023 Veeco Instruments Inc. All Rights Reserved.
Slide 11: FY 2022 Revenue by Market & Region
FY 2022 Revenue by Market & Region Revenue by Market Revenue by Region Scientific & ROW is negligible Other EMEA Data Storage 11% 14% Rest of APAC 13% 36% 19% $646M Semiconductor China 57% 19% Compound United States Semiconductor 31% Revenue Trend ($M) FY 20 FY 21 FY 22 Semiconductor 166 247 369 Com
Slide 12: FY Operating Results
FY Operating Results GAAP Non-GAAP In millions (except per share amounts) FY 21 FY 22 FY 21 FY 22 Revenue $583.3 $646.1 $583.3 $646.1 Gross Profit 242.3 263.1 245.1 271.0 Gross Margin 41.5% 40.7% 42.0% 41.9% Operating Expenses 185.6 202.9 158.5 171.2 Operating Income 56.7 60.3 86.6 99.8 Net Income 2
Slide 13: Q4 2022 Revenue by Market & Region
Q4 2022 Revenue by Market & Region Revenue by Market Revenue by Region Scientific & ROW is negligible Other EMEA Data Storage 12% 14% Rest of APAC 11% 42% 19% $154M Semiconductor China 16% 61% Compound United States Semiconductor 25% Revenue Trend ($M) Q4 21 Q3 22 Q4 22 Semiconductor 65 100 94 Compo
Slide 14: Q4 Operating Results
Q4 Operating Results GAAP Non-GAAP In millions (except per share amounts) Q3 22 Q4 22 Q3 22 Q4 22 Revenue $171.9 $153.8 $171.9 $153.8 Gross Profit 70.0 62.9 72.2 65.1 Gross Margin 40.7% 40.9% 42.0% 42.3% Operating Expenses 52.4 49.5 43.9 41.3 Operating Income 17.6 13.4 28.4 23.8 Net Income 15.0 128.
Slide 15: Balance Sheet and Cash Flow Highlights
Balance Sheet and Cash Flow Highlights $ millions Q4 21 Q3 22 Q4 22 Cash & Short-Term Investments 225 272 303 Accounts Receivable 110 143 124 Inventories 171 188 207 Accounts Payable 44 51 52 Long-Term Debt Including Current Portion 229 274 275 Cash Flow from Operations 17 47 33 DSO (days) 64 75 73
Slide 16: Q1 2023 Guidance
Q1 2023 Guidance GAAP Non-GAAP Revenue $130M - $150M $130M - $150M Gross Margin 37% - 40% 39% - 41% Operating Expenses $49M - $51M $42M - $44M Net Income / (Loss) $(1M) - $8M $6M - $15M Diluted Earnings / (Loss) Per Share $(0.03) – $0.16 $0.12 - $0.28 16 Q4 & FY 2022 Financial Results Conference Cal
Slide 17: Market Update
Market Update Bill Miller, Ph.D. 17 Q4 & FY 2022 Financial Results Conference Call Copyright © 2023 Veeco Instruments Inc. All Rights Reserved.
Slide 18: Differentiated Technologies Aligned with Megatrends
Differentiated Technologies Aligned with Megatrends Megatrends Growth Markets Core Technologies Laser Faster and more Annealing Ion Beam efficient computing to High Performance Computing/AI enable large scale data center applications and Semiconductor artificial intelligence AP Connecting people on
Slide 19: 2023 Priorities – Executing Our Growth Strategy
2023 Priorities – Executing Our Growth Strategy Strategy Execution Protect Execute Innovate & Growth & Invest Profitability ▪ Safety ▪ Supply chain ▪ Product Development ▪ Outperform WFE in ▪ Culture ▪ Customer ▪ Advance evaluation Semiconductor revenue satisfaction program ▪ Revenue growth in Data
Slide 20: Thank You Q&A
Thank You Q&A 20 Q4 & FY 2022 Financial Results Conference Call Copyright © 2023 Veeco Instruments Inc. All Rights Reserved.
Slide 21: Backup and Financial Tables
Backup and Financial Tables 21 Q4 & FY 2022 Financial Results Conference Call Copyright © 2023 Veeco Instruments Inc. All Rights Reserved.
Slide 22: Historical Revenue by End-Market
Historical Revenue by End-Market $M 2019 2020 2021 2022 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Semiconductor 175.6 37.4 37.5 33.6 57.4 165.9 51.6 53.7 76.3 65.4 247.1 77.6 97.5 100.4 93.8 369.4 Compound Semi 85.9 18.4 17.8 26.6 45.2 107.9 24.8 24.2 23.3 34.7 107.0 37.1 31.1 28.1 24.9 121.2
Slide 23: Convertible Notes as of December 31, 2022
Convertible Notes as of December 31, 2022 Annual Cash Annual Non-Cash Initial Conversion Convertible Debt Principal Amount Carrying Value Coupon Interest Interest3 Price Convertible Notes Due Jan 2023 $20M $20M 2.7% $0.5M $0.1M $40.03 Convertible Notes Due Jan 2025 $133M $131M 3.5% $4.6M $0.5M $24.0
Slide 24: 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 25: Supplemental Information—GAAP to Non-GAAP Reconciliation
Supplemental Information—GAAP to Non-GAAP Reconciliation In millions, except per share amounts Q3 22 Q4 22 2022 2021 In millions Q3 22 Q4 22 2022 2021 GAAP Basic weighted average shares 49.9 49.9 49.9 49.1 GAAP Diluted weighted average shares 65.2 65.7 65.6 53.6 Net sales $171.9 $153.8 $646.1 583.3
Slide 26: Q4 2022 Actual: GAAP to Non-GAAP Reconciliation
Q4 2022 Actual: GAAP to Non-GAAP Reconciliation Non-GAAP Adjustments Share-Based GAAP Compensation Amortization Other Non-GAAP Net Sales $153.8 $153.8 Gross Profit 62.9 1.2 — 1.0 65.1 Gross Margin 40.9% 42.3% Operating Expenses $49.5 (4.9) (2.5) (0.8) $41.3 Operating Income $13.4 6.0 2.5 1.8 $23.8 N
Slide 27: FY 2022 Actual: GAAP to Non-GAAP Reconciliation
FY 2022 Actual: GAAP to Non-GAAP Reconciliation Non-GAAP Adjustments Share-Based GAAP Compensation Amortization Other Non-GAAP Net Sales $646.1 $646.1 Gross Profit 263.1 4.6 — 3.3 271.0 Gross Margin 40.7% 41.9% Operating Expenses $202.9 (18.4) (10.0) (3.2) $171.2 Operating Income $60.3 23.0 10.0 6.5
Slide 28: Q1 2023 Guidance
Q1 2023 Guidance (in millions, except per share amounts) Reconciliation of GAAP to non-GAAP Financial Data Non-GAAP Adjustments Share-Based GAAP Compensation Amortization Other Non-GAAP Net Sales $130–$150 $130–$150 Gross Profit 48–61 1 — — 49–62 Gross Margin 37%–40% 39%–41% Operating Expenses $49–$