Veeco Instruments Inc. · NASDAQ:VECO
Veeco Instruments — Needham Growth Conference 2020
23 slides from Veeco Instruments's conference presentation, Jan 14, 2020
Slide 1: Veeco Investor Presentation
Veeco Investor Presentation Making a Material Difference January 2020
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 at a Glance
Veeco at a Glance ▪ Advanced Technology Equipment Provider ▪ $306M 2019 YTD Revenue (Q1-Q3 19) ▪ ~1,000 Employees; >800 Patents ▪ $232M in Cash, $345M in Convertible Debt* St. Paul, MN Munich, Germany Waltham, MA Somerset, NJ Seoul, Korea Plainview, NY Horsham, PA San Jose, CA Shanghai, China Tokyo,
Slide 4: Veeco Customers Drive Megatrends
Veeco Customers Drive Megatrends OSATs, MEMS & RF Filters IDMs & Foundries Scientific & Industrial Compound Semi 4 Investor Presentation | © 2020 Veeco Instruments Inc.
Slide 5: Historical Perspective
Historical Perspective Transformation Proven Legacy of Enabling Technologies Positioned to Drive Growth 1990s 2000s 2010s Today LED GaN MOCVD for Data Storage LCD backlighting & general lighting applications Ion Beam Deposition & Etch of magnetic material for HDD heads Two-Phase Transformation Impro
Slide 6: Transformation Update
Transformation Update Phase 1: Returning to Profitability ▪ Shift MOCVD market focus from commodity LED to higher value photonics ▪ Execute general infrastructure reductions ▪ Rationalize product line investments Phase 1: well underway Phase 2: Driving Growth Grow in current markets Penetrate with n
Slide 7: Transformation Phase 1 - Highlights
Transformation Phase 1 - Highlights General Infrastructure Reductions: ▪ Flatter organization led by exceptional leadership team including newly appointed CFO ▪ Product line organization ▪ Centralized R&D – optimal allocation of resources Better Focus on Markets and Customers with More Efficient R&D
Slide 8: Returning to Profitability
Returning to Profitability Operating Expense Reduction Gross Margin Improvement $49M * 40% 39% $36M 37% SG&A R&D Q3 2017 Target Q3 2020 2018 2019 2020 Target ▪ SG&A reduction ▪ Gross margin has benefited from improving ▪ Optimize R&D investments product mix and volume increases Improving Operating E
Slide 9: Markets and Technologies
Megatrend Markets and Technologies Technology High Performance AI / High Performance Computing Computing • Laser Annealing • AP Lithography • Ion Beam Deposition & Etch Photonics / 5G Cloud / Data Storage • MOCVD • Ion Beam Deposition & Etch Veeco Applies Unique Know-how to Solve Unmet Needs with th
Slide 10: Increasing Transistor Density
EUV Mask Blanks for Front-End Semiconductor Market Drivers Enabling Advanced Nodes Veeco Advantage ▪ Artificial Intelligence Veeco supplies best in class Ion ▪ High Performance Computing 28nm 14nm 10nm 7nm 5nm Beam Deposition systems to the ▪ Autonomous Driving only two EUV Lithography mask Increasi
Slide 11: Laser Annealing for Front-End Semiconductor
Laser Annealing for Front-End Semiconductor Market Drivers Enabling Advanced Nodes Veeco Advantage ▪ Artificial Intelligence Veeco’s LSA allows customers to ▪ High Performance Computing Semiconductor Node perform their annealing steps with <10nm ▪ Graphics Processing Units great accuracy. ▪ Very hig
Slide 12: Lithography for Advanced Packaging
Lithography for Advanced Packaging Market Drivers Enabling Better System Performance Veeco Advantage ▪ Artificial intelligence Veeco’s advanced packaging ▪ Automotive lithography is the process of choice: ▪ Mobility Lower Cost • Fan-out wafer level packaging at Smaller Form ▪ GPU top foundries Facto
Slide 13: Compound Semi for Photonics, 5G & MicroLED
Compound Semi for Photonics, 5G & MicroLED Compound Semiconductor Markets Veeco Advantage: TurboDisc® Platform 3D Sensing / VCSEL AsP based devices with consumer, automotive and industrial • Multi-Wafer applications such as world facing sensors in mobile devices, LiDAR • Single Wafer for autonomous
Slide 14: Recent Financial Trends (Non-GAAP)
Recent Financial Trends (Non-GAAP) Revenue ($m) Gross Margin 40% 40% 109 110 38% Ending 2019 Q4 19 up 10% 36% 36% with anticipated 99 99 98 YOY 40% gross margin Q4 18 Q1 19 Q2 19 Q3 19 Q4 19* Q4 18 Q1 19 Q2 19 Q3 19 Q4 19* OPEX ($m) EPS ($) 43 0.08 0.05 40 40 39 39 Further OPEX (0.06) Return to redu
Slide 15: Balance Sheet and Cash Flow Highlights
Balance Sheet and Cash Flow Highlights $ millions Q2 19 Q3 19 Cash & Short-Term Investments 247 232 Accounts Receivable 59 73 Inventories 140 135 Accounts Payable 22 35 Long-Term Debt 294 297 Cash Flow from Operations 14 (15) DSO (days) 54 60 DOI 210 185 DPO 33 47 Amounts may not calculate precisely
Slide 16: Investment Summary
Investment Summary ▪ Leveraging core technologies in growing markets ▪ Growing top line ▪ Megatrends supported by our technologies ▪ EUV Mask Blanks – Ion Beam Deposition ▪ Advanced Front-End Semiconductor – Laser Annealing ▪ Photonics & 5G – MOCVD ▪ Advanced Packaging – Lithography ▪ Cloud / Data S
Slide 17: Backup & Financial Tables
Backup & Financial Tables 17 Investor Presentation | © 2020 Veeco Instruments Inc.
Slide 18: Q3 2019 Revenue by Market & Region
Q3 2019 Revenue by Market & Region Revenue by Market Revenue by Region Front-End United States Semiconductor LED Lighting, Display 25% 31% & Compound Semi 22% ROW 41% $109M EMEA Advanced 18% Packaging, MEMS & RF Filters 10% China Scientific & Industrial 16% Revenue Trend ($m) Q4 18 Q1 19 Q2 19 Q3 19
Slide 19: Growth Areas – Market Status
Growth Areas – Market Status Current Market Gross Margin SAM Share Growth Driver View (vs. corp. avg.) EUV Mask Good Better Up to $50M Very High Technology Blanks Laser Spike Good Equal Up to $100M Medium Technology Annealing AP Capacity Flat Equal Up to $100M High Lithography Technology 3D Sensing
Slide 20: The Markets We Serve
The Markets We Serve Ion Beam Deposition for EUV and Laser Spike Annealing that enable early steps Front-End Front-End in the process of integrated circuit fabrication Semi Semiconductor Compound Metal Organic Chemical Vapor Deposition of Gallium Nitride and Arsenide Compound Phosphide compound-semi
Slide 21: Historical Revenue by Market and Geography
Historical Revenue by Market and Geography Revenue by Market ($M) FY 2016 FY 2017 FY 2018 Revenue by Market (%) FY 2016 FY 2017 FY 2018 Advanced Packaging, MEMS & RF Advanced Packaging, MEMS & RF 68 67 91 20% 15% 17% Filters Filters LED Lighting, Display & Compound LED Lighting, Display & Compound 1
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: sh
Slide 23: Supplemental Information – GAAP to Non-GAAP Reconciliation
Supplemental Information – GAAP to Non-GAAP Reconciliation US$ millions Q4 18 Q1 19 Q2 19 Q3 19 US$ millions, except per share amounts Q4 18 Q1 19 Q2 19 Q3 19 Net Sales $99.0 $99.4 $97.8 $109.0 GAAP Basic EPS (3.11) (0.40) (0.33) (0.25) GAAP Gross Profit 35.3 34.7 36.3 42.2 GAAP Diluted EPS (3.11) (