Slide 1: Q4 2016 Conference Call
Q4 2016 Conference Call Veeco Instruments Inc. February 16, 2017 1 | Investor Presentation
Slide 2: Cautionary Statements
Cautionary Statements Forward-looking Statements This written communication contains forward-looking statements that involve risks and uncertainties concerning the Company’s proposed acquisition of Ultratech, Ultratech’s and the Company’s expected financial performance, as well as Ultratech’s and th
Slide 3: Cautionary Statements
Cautionary Statements Additional Information and Where to Find It In connection with the proposed acquisition of Ultratech (“Ultratech”) by Veeco (the “Company”) pursuant to the terms of an Agreement and Plan of Merger by and among Ultratech, the Company and Ultratech, the Company will file with the
Slide 4: CEO Introduction
CEO Introduction John Peeler 4 | Investor Presentation
Slide 5: Q4 Financial Results
Q4 Financial Results Revenue Adjusted EBITDA Bookings $94M $6.2M $127M Revenue ($M) Adjusted EBITDA ($M) Bookings ($M) 100 94 8 6.2 150 127 118 85 78 4 2.9 75 68 75 75 62 (2.1) (2.8) 0 50 -4 0 Q1 16 Q2 16 Q3 16 Q4 16 Q1 16 Q2 16 Q3 16 Q4 16 Q1 16 Q2 16 Q3 16 Q4 16 Increased ~9% Q/Q More than doubled
Slide 6: Executing Well Against Strategic Objectives
Executing Well Against Strategic Objectives Strengthening our Core Named exclusive supplier for Osram’s LED production facility in Kulim (MOCVD & PSP) Launched K475i As/P MOCVD system to expand our positions in Red, Orange, Yellow LEDs Grew Advanced Packaging, MEMS & RF sales by ~10% Y/Y Enhan
Slide 7: CFO Financial Review
CFO Financial Review Sam Maheshwari 7 | Investor Presentation
Slide 8: Q4 2016 Revenue Breakdown by End Market and Geography
Q4 2016 Revenue Breakdown by End Market and Geography Q4 2016 Revenue by End Market Q4 2016 Revenue by Geography 13% 42% Lighting, Display & Data Storage Power Electronics 20% 33% United States China $39M Foundational Businesses 28% $94M 23% Scientific & EMEA Industrial 17% 24% Advanced Packaging, R
Slide 9: 2016 End Market and Geographic Revenue Diversification
2016 End Market and Geographic Revenue Diversification 2016 Revenue by End Market 2016 Revenue by Geography 16% 41% Data Storage Lighting, Display & Power Electronics 26% 26% United States China Foundational Businesses $332M 22% Scientific & Industrial 25% 23% EMEA Rest of World 21% Advanced Packagi
Slide 10: P&L Highlights
P&L Highlights GAAP Non-GAAP ($M) Q3 16 Q4 16 2016 Q3 16 Q4 16 2016 Revenue $85.5 $93.6 $332.5 $85.5 $93.6 $332.5 Gross Profit 33.5 36.0 132.9 34.4 36.7 135.5 % 39.1% 38.5% 40.0% 40.3% 39.2% 40.8% R&D 19.9 17.5 81.0 18.9 17.2 77.7 SG&A & Other 19.2 18.8 77.9 15.7 15.7 65.9 Net Income (69.6) (5.0) (1
Slide 11: Successfully Executed Convertible Debt Offering
Successfully Executed Convertible Debt Offering 6-Year Convertible Notes Summary Key Terms » $345M upsized convertible note offering; » Non-GAAP cash pre-tax interest expense includes 15% underwriter’s option of ~$9.3M annualized, based on 2.70% coupon rate » 2.70% coupon rate, notes maturing 2023 »
Slide 12: Financial Highlights
Financial Highlights ($M) Q3 16 Q4 16 Cash & Short-term Investments 337 344 Accounts Receivable 50 58 Inventories 87 77 Accounts Payable 27 23 Cash Flow from Operations 7 0.4 DSO 53 56 DOI 163 134 DPO 48 36 > Grew cash balance by ~$7M > DOI trending down as we consume inventory Note: Amounts may not
Slide 13: Q1 2017 Guidance
Q1 2017 Guidance GAAP Non-GAAP Revenue $85M–$100M $85M–$100M Gross Margins 37%–39% 38%–40% Net Income (Loss) ($11M)–($5M) $0M–$6M Earnings Per ($0.28)–($0.12) $0.00–$0.16 Share Adjusted EBITDA $5M–$11M Note: A reconciliation of GAAP to Non-GAAP financial measures is contained in the Back Up & Reconc
Slide 14: Business Update & Outlook
Business Update & Outlook 14 | Investor Presentation
Slide 15: 2017 LED Industry - Off to a Healthy Start
2017 LED Industry - Off to a Healthy Start TV industry dynamics bode well for panel makers and LED manufacturers » Panel pricing increased in 2H 2016; positively impacting panel maker profitability » Demand for larger size TVs and 4K TVs growing » 4K TVs require 30%-35% more LEDs Rapid growth in Fin
Slide 16: Veeco MOCVD – Riding the LED Wave
Veeco MOCVD – Riding the LED Wave LED industry recovery Veeco is poised to Strengthening expected to drive strong benefit as market leader ROY LED positions MOCVD demand in 2017 in MOCVD while expanding into other applications Photonics/ MOCVD Industry Market Share leader for Blue ROY LED Reactor Sh
Slide 17: Veeco PSP - Sowing the Seeds for Growth
Veeco PSP - Sowing the Seeds for Growth FO WLP expected to Veeco is gaining a Penetrating new packaging grow ~50% foothold in customers; qualifying CAGR 2015-2020 Advanced Packaging new applications Penetration FO WLP Device Veeco Advanced Packaging Revenue Revenue NA IDM ~50% CAGR NA IDM Asian OSAT
Slide 18: Veeco Foundational Business – Fortifying from the Ground Up
Veeco Foundational Business – Fortifying from the Ground Up Stable revenue stream High-power laser demand Leaders in magnetic driving MBE opportunities materials processing opening doors to new opportunities Veeco Foundational Business Veeco MBE Revenue Revenue Ion Beam Deposition System order for E
Slide 19: Starting 2017 Stronger and Well Positioned
Starting 2017 Stronger and Well Positioned > Stable business conditions » Positive LED industry dynamics » Healthy backlog of $209M > Strong technology portfolio » Strengthening leadership in MOCVD » Penetrating growing Advanced Packaging markets with PSP » Leveraging Ion Beam and MBE expertise to c
Slide 20: Q&A
Q&A 20 | Investor Presentation
Slide 21: Back Up & Reconciliation Tables
Back Up & Reconciliation Tables 21 | Investor Presentation
Slide 22: Note On Reconciliation Tables
Note On Reconciliation Tables These tables include financial measures adjusted for the impact of certain items; these financial measures are therefore not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These Non- GAAP financial measures exclude items such as: s
Slide 23: Supplemental Information—GAAP to Non-GAAP Reconciliation
Supplemental Information—GAAP to Non-GAAP Reconciliation US$ millions Q3 16 Q4 16 US$ millions Q3 16 Q4 16 US$ millions, except per share data Q3 16 Q4 16 Net Sales $85.5 $93.6 GAAP Net Income (Loss) ($69.6) ($5.0) GAAP Basic EPS (1.78) (0.13) GAAP Gross Profit 33.5 36.0 Add: Share-Based Comp 3.7 3.
Slide 24: Q4 2016 GAAP to Non-GAAP Reconciliation
Q4 2016 GAAP to Non-GAAP Reconciliation Non-GAAP Adjustments Share-Based In millions, except per share data GAAP Compensation Amortization Other Non-GAAP Net Sales $93.6 $93.6 Gross Profit 36.0 0.3 0.4 36.7 Gross Margin 38.5% 39.2 % Research and Development 17.5 (0.3) 17.2 Selling, General, and Admi
Slide 25: 2016 GAAP to Non-GAAP Reconciliation
2016 GAAP to Non-GAAP Reconciliation Non-GAAP Adjustments Share-Based In millions, except per share data GAAP Compensation Amortization Other Non-GAAP Net Sales $332.5 $332.5 Gross Profit 132.9 1.9 0.7 135.5 Gross Margin 40.0% 40.8 % Research and Development 81.0 (3.3) 77.7 Selling, General, and Adm
Slide 26: Q1 2017 Guidance GAAP to Non-GAAP Reconciliation
Q1 2017 Guidance GAAP to Non-GAAP Reconciliation Non-GAAP Non-GAAP Adjustments Adjustments Share-Based In millions, except per share data GAAP Compensation Amortization Other Non-GAAP Net Sales $85–$100 $85–$100 Gross Profit 32–39 1 — — 33–40 Gross Margin 37%–39% 38%–40% Net Income (Loss) ($11)–($5)