Slide 1: Q4 2017 Conference Call
Q4 2017 Conference Call > Veeco Instruments Inc. > February 12, 2018 1 | Q4 2017 / FY 2017 Conference Call | Veeco Instruments Inc © 2018
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: CEO Introduction
CEO Introduction John Peeler 3 | Q4 2017 / FY 2017 Conference Call | Veeco Instruments Inc. © 2018
Slide 4: Q4 2017 Highlights
Q4 2017 Highlights Q4 $179M $143M $10.5M 19¢ Results Bookings Revenue Non-GAAP Non-GAAP Op Income EPS > Bookings up 3rd consecutive quarter; backlog building > Revenue up 9% from previous quarter > Strongest quarter of the year in Non-GAAP operating income > Non-GAAP EPS above high end of guided ran
Slide 5: 2017: A Transformational Year – Positioned to Grow
2017: A Transformational Year – Positioned to Grow Expanded Market Reach with Complementary Acquisition » Closed Ultratech acquisition; integration progressing well » Synergies greater than originally expected Executed Manufacturing Consolidation » New Jersey manufacturing consolidation complete » G
Slide 6: CFO Financial Review
CFO Financial Review Sam Maheshwari 6 | Q4 2017 / FY 2017 Conference Call | Veeco Instruments Inc. © 2018
Slide 7: Q4 2017 Revenue by End Market and Geography
Q4 2017 Revenue by End Market and Geography Mix By End Market By Geography 15% 24% United States 18% Scientific & China Industrial 58% LED Lighting, Display & Compound Semi 14% EMEA 9% Front-End $143M Semi 9% 53% Advanced Packaging, Rest of World MEMS & RF Filters > Bookings grew to ~$179M > Geograp
Slide 8: 2018: Growing Our Way to More Diversified Revenue Mix
2018: Growing Our Way to More Diversified Revenue Mix Higher Growth Areas Mix By End Market 15% - 20% Scientific & Industrial 40% - 50% LED Lighting, Revenue Display & 15% - 20% Markets Compound Semi Front-End Semi 2017 2018 2017 2018 Front-End Semi 15% - 20% Advanced Packaging, MEMS & RF Filters Ad
Slide 9: P&L Highlights
P&L Highlights GAAP Non-GAAP ($M) Q3 17 Q4 17 2017 Q3 17 Q4 17 2017 Revenue $131.9 $143.4 $484.8 $131.9 $143.4 $484.8 Gross Profit 53.1 58.3 184.3 55.8 59.5 196.9 % 40.2% 40.7% 38.0% 42.3% 41.5% 40.6% R&D 24.1 24.3 82.0 23.2 23.3 79.0 SG&A & Other 29.6 28.5 99.9 25.7 25.6 86.5 Operating Income/(Loss
Slide 10: Balance Sheet Highlights
Balance Sheet Highlights ($M) Q3 17 Q4 17 Cash & Short-Term Investments 321 328 Accounts Receivable 114 99 Inventories 114 120 Accounts Payable 54 50 Long-Term Debt 273 276 Cash Flow from Operations 25 19 DSO (days) 78 62 DOI 133 130 DPO 61 54 Note: Amounts may not calculate precisely due to roundin
Slide 11: Q1 2018 Guidance
Q1 2018 Guidance GAAP Non-GAAP Revenue $140M–$165M $140M–$165M Gross Margins 33%–35% 34%–36% Net Income (Loss) ($23M)–($15M) ($2M)–$6M Earnings Per ($0.50)–($0.32) ($0.04)–$0.14 Share Non-GAAP $2M–$10M Operating Income Note: A reconciliation of GAAP to Non-GAAP financial measures is contained in the
Slide 12: Business Update & Outlook
Business Update & Outlook 12 | Q4 2017 / FY 2017 Conference Call | Veeco Instruments Inc. © 2018
Slide 13: Multiple Veeco Technologies Serve Growing Markets
Multiple Veeco Technologies Serve Growing Markets Markets Growth of Veeco’s Served Markets » Advanced Packaging, MEMS & RF Filters From 2017 to 2020* » LED Lighting, Display & Compound Semi » Front-End Semi $1.8B » Scientific & Industrial $1.2B Growth Drivers 2017 2020 ~50% Growth from 2017 to 2020
Slide 14: Advanced Packaging, MEMS & RF Filters
Advanced Packaging, MEMS & RF Filters Significant Increase in Broad-Based Growth Vectors Demand for WLP » Mobile devices and connectivity trends Applications » Automotive electronics growth, including ADAS » Big Data Processing » 5G infrastructure deployment in 2019 and 2020 WLP Veeco Advanced Packa
Slide 15: LED Lighting, Display & Compound Semi
LED Lighting, Display & Compound Semi Veeco Remains the LED Market Leader » 55% market share for GaN LED* » Fab utilization worldwide > 85%; market to remain robust Non General-Lighting Areas Such as Photonics and RF Driving Meaningful Growth » VCSELs & Laser Diodes » Micro-LEDs & Fine Pitched Displ
Slide 16: Front-End Semi
Front-End Semi LSA » Demand from Taiwan and China » 2017 market share was approx. 40% » Melt being qualified for production at 7nm & 5nm EUV Photomask » Strong interest from photomask industry » LDD-IBD ready for EUV adoption STT-MRAM » Well positioned for MRAM ramp with multiple engagements across
Slide 17: Scientific & Industrial
Scientific & Industrial Good Momentum in Optical Coating Systems » Strong Bookings in 2017 » Broad-based market demand including industrial lasers, optical components for telecom, and R&D Data Storage » Good momentum with 60% bookings growth in 2017 Launched Lancer™ Ion Beam Etch System » A reduced-
Slide 18: 2018 Priorities
2018 Priorities > Complete Integration of Ultratech is now > Launch New Products > Deliver Growth in all 4 Markets > Diversify Revenue by End Market > Grow Earnings Faster than Revenue 18 | Q4 2017 / FY 2017 Conference Call | Veeco Instruments Inc. © 2018 18
Slide 19: Q&A
Q&A 19 | Q4 2017 / FY 2017 Conference Call | Veeco Instruments Inc. © 2018
Slide 20: Back Up & Reconciliation Tables
Back Up & Reconciliation Tables 20 | Q4 2017 / FY 2017 Conference Call | Veeco Instruments Inc. © 2018
Slide 21: 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 22: Supplemental Information—GAAP to Non-GAAP Reconciliation
Supplemental Information—GAAP to Non-GAAP Reconciliation US$ millions Q3 17 Q4 17 2017 US$ millions, except per share data Q3 17 Q4 17 2017 Net Sales $131.9 $143.4 $484.8 GAAP Basic EPS (0.47) (0.12) (1.01) GAAP Gross Profit 53.1 58.3 184.3 GAAP Diluted EPS (0.47) (0.12) (1.01) GAAP Gross Margin 40.
Slide 23: Q4 2017 GAAP to Non-GAAP Reconciliation
Q4 2017 GAAP to Non-GAAP Reconciliation Non-GAAP Adjustments Share-Based In millions, except per share data GAAP Compensation Amortization Other Non-GAAP Net Sales $143.4 $143.4 Gross Profit 58.3 0.6 0.5 59.5 Gross Margin 40.7% 41.5% Research and Development 24.3 (1.0) 23.3 Selling, General, and Adm
Slide 24: 2017 GAAP to Non-GAAP Reconciliation
2017 GAAP to Non-GAAP Reconciliation Non-GAAP Adjustments Share-Based In millions, except per share data GAAP Compensation Amortization Other Non-GAAP Net Sales $484.8 $484.8 Gross Profit 184.3 2.5 10.1 196.9 Gross Margin 38.0% 40.6% Research and Development 82.0 (3.0) 79.0 Selling, General, and Adm
Slide 25: Q1 2018 Guidance GAAP to Non-GAAP Reconciliation
Q1 2018 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 $140–$165 $140–$165 Gross Profit 47–58 1 — — 48–59 Gross Margin 33%–35% 34%–36% Net Income (Loss) $(23)–$(