Slide 1: Q2 2014 Conference Call
Q2 2014 Conference Call July 30, 2014
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: John Peeler, Chairman & CEO: Introduction
John Peeler Chairman & CEO Introduction
Slide 4: Second Quarter 2014 Highlights
Second Quarter 2014 Highlights Q2 Orders $104M Cash and Short Term Investments $485M Q2 Revenue up 5% sequentially to $95M Third sequential quarter with a positive book-to-bill ratio Generated cash in a challenging quarter Improvement in MOCVD & MBE drive revenue growth
Slide 5: Strong MOCVD Order Trend
Strong MOCVD Order Trend ($M) 1H 2014 = $157M 1H 14 Up Nearly 80% from 1H 13 1H 2013 = $88M
Slide 6: Sam Maheshwari, CFO: Financial Highlights
Sam Maheshwari, CFO Financial Highlights
Slide 7: P&L Highlights
P&L Highlights *Excludes amortization and restructuring. **Q1 2014 GAAP results include $29M gain resulting from reversal of Synos acquisition related contingency accruals See financial tables for further details. Synos Purchase 10/1/13
Slide 8: Revenue Highlights – Q2 2014
Revenue Highlights – Q2 2014 Total Revenue: $95M LED & Solar ~$77M MOCVD $67M; up 5% sequentially MBE $10M ($M) Q2 14 Q1 14 Adj EBITA ($1.6M) $2.1M ($M) Q2 14 Q1 14 Adj EBITA ($0.3M) ($0.6M) Data Storage ~$18M Data Storage down 10% sequentially
Slide 9: Order Highlights – Q2 2014
Order Highlights – Q2 2014 Total Bookings: $104M LED & Solar ~$81M MOCVD at $75M; down 10% sequentially MBE $6M; up slightly on a sequential basis Data Storage ~$23M Improves 52% sequentially after extremely weak Q1 2014
Slide 10: Balance Sheet Highlights
Balance Sheet Highlights Cash improves $2M Accounts receivable increased by $7M Inventory reduced by $4M Synos Purchase 10/1/13
Slide 11: Cost Reduction Initiatives To Drive Lower Breakeven
Cost Reduction Initiatives To Drive Lower Breakeven Other Facility Consolidations & Streamlining Consolidate Data Storage Business into One Site General Expense Reduction Initiatives 2 1 3 Total annual OPEX savings $16M OPEX declines in 2H 2014 2015 OPEX to decline ~10% from 2014 levels Fund growth
Slide 12: Q3 2014 Guidance
Q3 2014 Guidance Q3 2014 Orders Higher than Q2 Revenue $92M-100M Gross Margins 31.5-33.5% OPEX* $41M-42M Adjusted EBITA ($7M)-($3M) Adjusted EBITDA ($4M)-$0M GAAP EPS ($0.43)-($0.34) Non-GAAP EPS** ($0.15)-($0.07) *Excludes amortization ** Non-GAAP EPS excludes $2.6M restructuring charge Orders Expe
Slide 13: Business Update and Outlook
Veecp Business Update and Outlook
Slide 14: UHD-TV uses 2X more LEDs
UHD-TV uses 2X more LEDs; larger chip size; brighter specs Increased share of >50” screen size shipments boosts LED demand High utilization and chip performance requirements (brighter chips) helped LED manufacturers to improve their bottom line in 1H 2014 Source: NPD Displaysearch, Digitimes CAGR 16
Slide 15: LED Lighting Demand Accelerating
LED Lighting Demand Accelerating Source: IHS Research LED Lamp Shipments (in M units) Nearly 40% CAGR LED Lighting Market Value up 25% to $5B in 2014
Slide 16: Early Innings of Big Secular LED Lighting Trend
Early Innings of Big Secular LED Lighting Trend Some Underutilized Equipment Still Coming On-line LED Customer Consolidation Customers Remain Cautious Install Base Yield Improvements Maxing Out Tier 1 Operating Close to Maximum Capacity Starting to Invest LED Adoption Accelerating Incandescent Phase
Slide 17: FAST-ALD Technology to Drive Growth in 2015 and Beyond
1 FAST-ALD Technology to Drive Growth in 2015 and Beyond Focused on winning for OLED Flex Display Encapsulation 3 OLED Mobile $200-400M TAM Engaging Potential New Customers 2 OLED TV and Lighting >$200M TAM 3 Market Validation Activity on Track for New Applications Semiconductor & Other >$200M TAM
Slide 18: Update on our Top Priorities
Update on our Top Priorities Transition to Profitable Growth in 2015 Develop and launch game changing new products Next-gen MOCVD and new ALD to drive growth Targeting GMs >40% Streamlining initiatives to improve profitability Improve customers’ CoO and our gross margins Drive process improvement in
Slide 19: Q&A Session
Veecm Q&A Session
Slide 20: Financial Tables and Reconciliation
Financial Tables and Reconciliation
Slide 21: Income Statement
Income Statement Veeco Instruments Inc. and Subsidiaries Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) For the three months ended For the six months ended June 30, June 30, 2014 2013 2014 2013 Net sales $ 95,122 $ 97,435 $ 185,963 $ 159,216 Cost of sales 64,
Slide 22: Balance Sheet
Balance Sheet Veeco Instruments Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In thousands) June 30, December 31, 2014 2013 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 232,332 $ 210,799 Short-term investments 252,165 281,538 Restricted cash 518 2,738 Accounts receiv
Slide 23: Reconciliation
Reconciliation Veeco Instruments Inc. and Subsidiaries Reconciliation of GAAP to non-GAAP results (In thousands, except per share data) (Unaudited) For the three months ended For the six months ended June 30, June 30, 2014 2013 2014 2013 Adjusted EBITA ** Operating income (loss) $ (15,771) $ (6,812)
Slide 24: Segment Data
Segment Data Veeco Instruments Inc. and Subsidiaries Segment Bookings, Revenues, and Reconciliation of Operating Income (Loss) to Adjusted EBITA (In thousands) (Unaudited) For the three months ended For the six months ended June 30, June 30, 2014 2013 2014 2013 LED & Solar Bookings $ 80,661 $ 58,089
Slide 25: Guidance
Guidance 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 September 30, 2014 LOW HIGH Adjusted EBITDA ** Operating income $ (17,596) $ (14,046) Adjustments: Amortization 2,929 2,9
Slide 26: Historical Reconciliation – EBITA to EBITDA
Historical Reconciliation – EBITA to EBITDA Veeco moves to Adjusted EBITDA model for Non-GAAP measures. Three Months Ended March 31, June 30, September 30, December 31, 2012 2012 2012 2012 Adjusted EBITA (As reported) $ 25,354 $ 20,319 $ 14,219 $ 1,230 Depreciation 2,500 2,934 2,870 2,980 Adjusted E