Slide 1: Q1 2012 Financial Results Earnings Conference Call
Q1 2012 Financial Results Earnings Conference Call April 30, 2012
Slide 2: Safe Harbor Statement
4/30/12 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 items in
Slide 3: Introduction
Introduction John Peeler, Chief Executive Officer
Slide 4: Financial Highlights
Financial Highlights David Glass, Chief Financial Officer Q1 2012 Revenue in Line...Profit Ahead of Guidance z Q1 2012 Q1 2011 $1.44 4/30/12
Slide 5: Q1 2012 Revenue in Line...Profit Ahead of Guidance
Q1 2012 Revenue in Line...Profit Anead of Guidance + Revenue decreased 45% from Q1 ‘11 + Operating expenses declined $5M + GAAP EPS was $0.42 and non-GAAP Eps Seaventially to $43M was $0.49 + Adjusted EBITA was $25M, or 18% of sales + Gross margin was 46.7% $255 Qi ai 2012 2011 Revenue Non-GAAP Net
Slide 6: Total Revenue: $140M
Total Revenue: $140M Q1 2012 Revenue & Adjusted EBITA LED & Solar $96M Down from $215M in Q1 2011 MOCVD at $82M in Q1 2012 ($M) Q1 ‘12 Q1 ’11 Adj EBITA $17.5 $81.0 ($M) Q1 ‘12 Q1 ‘11 Adj EBITA $9.0 $12.2 Data Storage $44M Up from $40M in Q1 2011 4/30/12
Slide 7: Total Bookings: $113M
Total Bookings: $113M Q1 2012 Bookings Weak as Anticipated LED & Solar ~$85M Down from $198M in Q1 2011; up 26% from $67M in Q4 2011 MOCVD at $70M (+19% sequentially) and MBE at $15M (+71% sequentially) Data Storage $29M Down from $33M reported Q1 2011 4/30/12
Slide 8: Veeco's Strong Balance Sheet
Veeco’s Strong Balance Sheet 3/31/12 12/31/11 Cash & Short-term Investments* $524 $492 Accounts Receivable 90 95 Inventory 103 113 Fixed Assets, Net 92 86 Total Assets 944 936 Long-term Debt (including current portion) 3 3 Equity 780 761 4/30/12 Generated $42M in cash from operations Accounts receiv
Slide 9: Q2 2012 Guidance
Q2 2012 Guidance 4/30/12 Note: Guidance is for Veeco’s Continuing Operations See reconciliation to GAAP at end of presentation Q2 2012 Revenue $120-145M Gross Margins 44-46% Operating Spending $43-46M Adjusted EBITA 12-17% GAAP EPS $0.20-0.40 Non-GAAP EPS $0.29-0.48
Slide 10: Flexible Model Drives Profit through Cycles
4/30/12 Flexible Model Drives Profit through Cycles Quarterly Revenue EBITA % $100-125M 5-10% $125-150M 10-20% $150-200M 20-30% $200-300M 30-35%+ Revenue $Millions 2010 2011 2012 Flexible Manufacturing & Variable Costs $120-145F EBITA % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2F Q1 2012 18% EBITA Q4 2010 38% EB
Slide 11: Business Outlook
Business Outlook John Peeler, Chief Executive Officer
Slide 12: MOCVD Business Conditions Remain Muted
MOCVD Business Conditions Remain Muted 4/30/12 Bookings improved modestly in Q1 2012 Biggest sequential change in Taiwan and Korea No clear inflection in customer buying; customers remain cautious...unclear when orders improve Positive signs are emerging – increasing tool utilization rates in Korea,
Slide 13: Positive Trends in LED Lighting
4/30/12 Lower pricing LED bulb price dip accelerating (<$10 for 40W) More LED lamp products available Heightened consumer awareness New LED Icon Positive Trends in LED Lighting
Slide 14: SSL Adoption Drives Need for More MOCVD Reactors
SSL Adoption Drives Need for More MOCVD Reactors 4/30/12 2013 2014 2015 2016 1000 500 0 Demand Accelerates in 2013 Base Case TAM ~400-800 reactors per year 540 690 760 Base Case GaN MOCVD Reactor Shipments for LEDs (units) Upside Range Base Range Downside Range 460 Veeco Estimates
Slide 15: Our Technology Roadmap is Aligned To Lighting Industry Requirements
Our Technology Roadmap is Aligned To Lighting Industry Requirements 4/30/12 LED TV Market $4.3B1 LED Lighting Market $13.3B2 Veeco Roadmap Will Drive ~3X Epi Cost Reduction: Yield, Process Capability & Architecture 2010 2011 2012 and beyond SSL Will Be A Multi-Billion $ MOCVD Market MaxBright Indust
Slide 16: GaN Power Electronics: Emerging MOCVD Opportunity
GaN Power Electronics: Emerging MOCVD Opportunity Large Growing Market: GaN Power Electronics Power Electronics device market is expected to surpass $35B by 20201 GaN-based power devices offer higher efficiency, switching speed and lower power consumption Veeco winning at key global Power Device pla
Slide 17: Data Storage Business Growth: More than Just Hard Drives
Data Storage Business Growth: More than Just Hard Drives 4/30/12 End Market Blended CAGR ~20% High Performance Optical Coatings MEMS & Magnetic Sensors Veeco’s 2011 Data Storage Revenue $151M 65% 35% *Seagate Technology End Market CAGR ~ 10% Lap & Dice From 1960- 2010 approximately 1 billion terabyt
Slide 18: Growing Services Business
Growing Services Business Services business grew to nearly $100M in 2011, record Q1 2012 $31M Broad range of spare parts, consumables, upgrades that drive tool performance 400 MOCVD reactors go “off-warranty” this year – sell extended plans Asia centers ideal for customer training and process develo
Slide 19: 2012 Outlook Unchanged
2012 Outlook Unchanged $500-600M 4/30/12 MOCVD recovery will be driven by LED lighting investments and growing sales for new applications Data Storage, MBE and Services provide “cushion” during LED market pause Focused on driving future growth while delivering strong profitability in a down revenue
Slide 20: Investment Rationale
Investment Rationale 4/30/12 1 Market Leaders We are the leader in each of our core technologies – MOCVD, MBE, IBE/IBD and Advanced Thin Film Process Technologies 2 Exceptional Technology Our people, technology and process knowledge enables us to deliver systems with the lowest CoO to the world’s le
Slide 21: Additional Financial Slides
Additional Financial Slides
Slide 22: Income Statement
4/30/12 Income Statement Veeco Instruments Inc. and Subsidiaries Condensed Consolidated Statements of Income (In thousands, except per share data) (Unaudited) Three months ended March 31, 2012 2011 Net sales $ 139,909 $ 254,676 Cost of sales 74,641 123,713 Gross profit 65,268 130,963 Operating expen
Slide 23: Balance Sheets
4/30/12 Balance Sheets Veeco Instruments Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In thousands) March 31, December 31, 2012 2011 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 275,332 $ 217,922 Short-term investments 247,826 273,591 Restricted cash 852 577 Account
Slide 24: Q1 2012 Reconciliation
4/30/12 Q1 2012 Reconciliation Veeco Instruments Inc. and Subsidiaries Reconciliation of GAAP to non-GAAP results (In thousands, except per share data) (Unaudited) Three months ended March 31, 2012 2011 Adjusted EBITA Operating income $ 20,946 $ 87,208 Adjustments: Amortization 1,215 908 Equity-base
Slide 25: Q2 2012 Guidance Reconciliation
4/30/12 Q2 2012 Guidance Reconciliation Veeco Instruments Inc. and Subsidiaries Reconciliation of GAAP to non-GAAP results (In thousands, except per share data) (Unaudited) Guidance for the three months ending June 30, 2012 LOW HIGH Adjusted EBITA Operating income $ 9,087 $ 19,355 Adjustments: Amort
Slide 26: Segment Data
4/30/12 Segment Data Veeco Instruments Inc. and Subsidiaries Segment Bookings, Revenues, and Reconciliation of Operating Income (Loss) to Adjusted EBITA (Loss) (In thousands) (Unaudited) Three months ended March 31, 2012 2011 LED & Solar Bookings $ 84,629 $ 198,245 Revenues $ 95,574 $ 214,698 Operat