Slide 1: Q2 2016 Conference Call
Q2 2016 Conference Call Veeco Instruments Inc. August 1, 2016 1 | Investor Presentation
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 | Investor Presentation
Slide 4: Q2 2016 Performance Summary
Q2 2016 Performance Summary Revenue of $75M » Consistent with expectations for a soft LED industry environment in 1H 2016 Gross margins exceeded expectations » Expanded GAAP and non-GAAP gross margins by ~70 basis points Bookings increased slightly to $68M » Supported by orders for Advanced Packagin
Slide 5: CFO Financial Review
CFO Financial Review Sam Maheshwari 5 | Investor Presentation
Slide 6: Focused on Return to Profitability
Focused on Return to Profitability Aligning operational structure to current business environment » Lowering quarterly breakeven to $75M-$80M by Q4 2016 » Foundation to deliver consistent adjusted EBITDA profitability » Will continue to assess / align structure as needed Target lowering fixed costs
Slide 7: Revenue Breakdown by Market and Geography
Revenue Breakdown by Market and Geography Q1 2016 Revenue by End Market Q2 2016 Revenue by End Market 22% 29% 18% 33% Lighting, Display & Data Storage Lighting, Display & Data Storage Power Electronics Power Electronics $32M $34M Foundational Businesses $78M Foundational Businesses $75M 19% 26% Scie
Slide 8: P&L Highlights
P&L Highlights GAAP Non-GAAP ($M) Q1 16 Q2 16 Q1 16 Q2 16 Revenue $78.0 $75.3 $78.0 $75.3 » Gross margins expanded by Gross Profit 32.0 31.4 32.5 31.9 70 basis points Q2/Q1, exceeding expectations for % 41.0% 41.7% 41.7% 42.4% second consecutive quarter R&D 22.1 21.5 21.0 20.6 » GAAP Net Income refl
Slide 9: Financial Highlights
Financial Highlights ($M) Q1 16 Q2 16 Cash & Short-term Investments 349 331 Accounts Receivable 56 42 Inventories 77 91 Accounts Payable 31 35 Cash Flow from Operations (19) (12) DSO 65 50 DOI 157 189 DPO 61 72 Note: Amounts may not calculate precisely due to rounding 9 | Investor Presentation
Slide 10: Q3 2016 Guidance
Q3 2016 Guidance GAAP Non-GAAP Net Sales $70M–$85M $70M–$85M Gross Margins 38%–40% 39%–41% Net income (Loss) ($24M)–($18M) ($10M)–($4M) EPS ($0.62)–($0.46) ($0.26)–($0.10) Adjusted EBITDA ($6M)–$0M Notes: A reconciliation of GAAP to Non-GAAP financial measures is contained in the Back Up & Reconcili
Slide 11: Business Update & Outlook
Business Update & Outlook 11 | Investor Presentation
Slide 12: LED Industry Conditions are Improving
LED Industry Conditions are Improving LED demand drivers Environment for LED supporting unit growth manufacturers is stabilizing • Bulb ASP’s declining at a slower • TV unit shipments forecast to pace; supports financial stability improve in 2017, following declines in 2015/2016 • Modest improvement
Slide 13: Veeco MOCVD – The Right Technology Platform for Growth
Veeco MOCVD – The Right Technology Platform for Growth Solid State Lighting, LED Display & Automotive EPIK 700 • Continue to win in GaN LED with market leading EPIK platform • Maintaining competitive advantage through multi-generation roadmap, already developed ROY LED & Photonics K475i • Gaining tr
Slide 14: Veeco PSP – Versatility Generating Multiple Growth Levers
Veeco PSP – Versatility Generating Multiple Growth Levers » Market leader for single-wafer solvent clean with unique Extend ImmJET™ technology Global » Leveraging process advantages and existing infrastructure Reach to expand into under-represented regions in Asia Advanced » Established positions in
Slide 15: Focusing on our Strategic Objectives
Focusing on our Strategic Objectives Expanding Strengthening Maintaining our footprint our core operational focus Investing in adjacent market Building on our foundational Right sizing the business to opportunities to diversify business to capture improve profitability through the revenues opportuni
Slide 16: Q&A
Q&A 16 | Investor Presentation
Slide 17: Back Up & Reconciliation Tables
Back Up & Reconciliation Tables 17 | Investor Presentation
Slide 18: 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 19: Supplemental Information—GAAP to Non-GAAP Reconciliation
Supplemental Information—GAAP to Non-GAAP Reconciliation US$ millions Q1 16 Q2 16 US$ millions Q1 16 Q2 16 US$ millions, except per share data Q1 16 Q2 16 Net Sales $78.0 $75.3 GAAP Net Income (Loss) ($15.5) ($32.1) GAAP Basic EPS ($0.40) (0.82) GAAP Gross Profit 32.0 31.4 Add: Share Based Comp 4.3
Slide 20: Q2 2016 GAAP to Non-GAAP Reconciliation
Q2 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 $75.3 $75.3 Gross Profit 31.4 0.5 31.9 Gross Margin 41.7% 42.4% Research and development 21.5 (0.9) 20.6 Selling, general, and administr
Slide 21: Q3 2016 Guidance GAAP to Non-GAAP Reconciliation
Q3 2016 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 $70–$85 $70–$85 Gross Profit 27–34 1 — — 28–35 Gross Margin 38%–40% 39%–41% Net Income (Loss) ($24)–($18)