Investor Presentation

Transcription

1 Investor Presentation May 2012

2 Veeco at a Glance We Make Thin Film Process Equipment Growing, depositing and etching thin films is our core competency Our Technology supports energy efficiency, consumer electronics and network storage VECO 2011: $980M Revenue ~900 employees >200 patents High Growth Market Focus Our equipment enables the manufacture of LEDs, power electronics, hard drives, MEMS, & wireless communications chips We are the Market Leader in MOCVD, MBE, IBE/IBD and Advanced Thin Film Process Technologies Our R&D is Best-in-Class Veeco s exceptional R&D organization delivers systems that enable the future

3 Business Snapshot Metal Organic Chemical Vapor Deposition Molecular Beam Epitaxy LED & Solar Data Storage Ion Beam Etch & Deposition Diamond-Like Carbon Physical Vapor Deposition 2011 Rev: $832M 2011 Rev: $151M Veeco s 2011 Revenue $979M Saws & Lappers

4 Thin Film Technology: At the Core of Everything We Do MOCVD & MBE III-V Compound LED Power Electronics Data Storage Solar Wireless Hard Drives

5 Transformation from Industry Player to Industry Leader John Peeler joins as CEO Portfolio management approach to R&D Outsourced manufacturing Established High Performance Culture Investment in world-class Asia customer support and training sites New supply chain hub in Singapore Quintupled MOCVD manufacturing capacity Strengthened sales and services team Metrology business sold Achieved #1 market share in MOCVD Record Data Storage revenues Nearly $1B in revenue Variable business model enables strong performance and high R&D through industry cycles 2012 Veeco launches TurboDisc "Kseries" MOCVD platform including K300 MOCVD system Gen10 MBE cluster tool introduced K465 MOCVD introduced Gen2000 Supports Global Wireless Device Ramp NEXUS CVD System and TAMR PVD System introduced for Data Storage customers NEXUS PVD-1 Physical Vapor Deposition System TurboDisc K465i MOCVD System launched becomes #1 selling system TurboDisc MaxBright MOCVD system introduced becomes #1 selling system NEXUS DLC-X and Optium ADS-800 TM launched for Data Storage customers Veeco creates Certified Equipment business Strong focus on MEMS and Magnetic Sensor Applications for Data Storage technologies SPECTOR-HT Ion Beam Deposition System launched

6 Veeco s Business Strategy and Focus Competitive Greatness Aligned with High Growth Markets Financial Strength and Operational Flexibility

7 Competitive Greatness

8 Market Leadership GEN200 Edge Production MBE System NEXUS IBE-420Si Ion Beam Etching System TurboDisc MaxBright GaN MOCVD Multi-Reactor System MOCVD technology leader for solid-state lighting Foundation Businesses MBE and Data Storage are #1 Deep process expertise, patents and know-how Lowest CoO products at the technological forefront

9 World Leaders Use Veeco s Technology

10 Customer Connectivity Our Approach is a Competitive Differentiator Edina, MN Poughkeepsie, NY Fort Collins, CO Plainview, NY Santa Clara, CA St. Paul, MN Camarillo, CA Somerset, NJ Mannheim, Germany Beijing, China Shanghai, China Seoul, Korea Tokyo, Japan Hsinchu City, Taiwan Bangkok, Thailand Penang, Malaysia Singapore Philippines Sales and Service R&D/Engineering/Training Proximity to customers is a strategic priority resulting in stronger customer support, better R&D alignment, and new customer conversion

11 Relentless Focus on Product Development Talent, discipline and focus has been a driver of our success Fast and agile; feedback loops and continuous improvement drive decisions Customers recognize we constantly seek new ideas and ways to improve products/processes MOCVD R&D has tripled since 2009 R&D Investment is our Growth Engine $97M $57M $39M $38M

12 Aligned with High Growth Markets

13 LED Market Forecasted to Grow Tremendously LED Market demand CAGR 31% LED lighting chip demand CAGR 40% LED in the news less than 5% of World s Lighting is LED

14 GaN MOCVD Reactor Shipments for LEDs (units) SSL Adoption Drives Need for More MOCVD Reactors Demand Accelerates in Base Case TAM ~ reactors per year Base Case Upside Range Base Range Downside Range Veeco Estimates

15 MOCVD Revenue ($M) Relative Market Share MOCVD Market Share $1,200 Veeco Q Veeco Market Share 60% 51% 60% $1,000 Aixtron Share (Relative) 44% $951 50% $800 $751 $781 $743 40% $600 24% 29% 30% $400 $342 $385 20% $200 $109 $154 10% $ %

16 Our Technology Roadmap is Aligned To Lighting Industry Requirements LED Lighting Market $13.3B 2 LED TV Market $4.3B 1 K465i Focus on Yield Improvement MaxBright Industry-first Multi-chamber System; 500% Productivity Increase Veeco Roadmap Will Drive ~3X Epi Cost Reduction: Yield, Process Capability & Architecture SSL Will Be A Multi-Billion $ MOCVD Market Notes: 1) LED TV Revenue 2009 to 2011 IMS Research; 2) LED Lighting Revenue 2013 to 2015 IMS Research

17 Imminent Global Adoption of LEDs China, Korea, Taiwan and Japan are all immediate LED lighting growth markets as they seek to implement new energy/lighting programs Other markets around the world are emerging as LED lighting price points decrease and energy policies shift toward greater LED usage Japan: Basic Energy Plan: Specific goals for Energy Efficient Lighting Korea: 60% penetration China: Releasing a LED Incentive policy of lighting by 2020 Taiwan: 250,000 Replacing Streetlights with LEDs in 2012

18 Large Growing Market: GaN Power Electronics Power Supplies GaN Power Electronics: Emerging MOCVD Opportunity Solar GaN Power Device Market 2 71% CAGR Consumer Electronics Clean Energy Notes: 1) Yole Nov 2011, 2) IMS Research Feb 2012 Automobile Power Electronics device market is expected to surpass $35B by GaN-based power devices offer higher efficiency, switching speed and lower power consumption Veeco winning at key global Power Device players for GaN R&D

19 Number of Devices (million) Wireless Device Growth Drives MBE GaAs Devices Shipped RF Switch Power Amplifier Transition to broadband multimode, multiband capacity More wireless devices in home environment MBE Production Leader High-performance, lowest CoO Source: Strategy Analytics

20 Data Storage Business Growth: More than Just Hard Drives High Performance Optical Coatings End Market CAGR ~ 10% From approximately 1 billion terabytes of data was stored. In 2012, 1 billion terabytes will be stored.* End Market Blended CAGR ~20% 65% 35% Veeco s 2011 Data Storage Revenue $151M MEMS & Magnetic Sensors DLC CVD PVD IBD IBE Lap & Dice *Seagate Technology

21 Financial Strength and Operational Flexibility

22 Veeco s Strong Balance Sheet Strong net cash position of $522 million Q1 2012: generated $42M in cash from operations Maintain R&D spend and pursue organic and inorganic growth through industry cycles

23 Veeco s Strong Balance Sheet Balance Sheet ($ millions) 3/31/12 12/31/11 Cash & Short-term Investments* $524 $492 Accounts Receivable Inventory Fixed Assets, Net Generated $42M in cash from operations Accounts receivable decreased to $90M (DSO = 58) Inventory declined by ~$10M to $103M (2.9 turns) Total Assets Long-term Debt (including current portion) 3 3 Equity * Includes restricted cash of $0.9M at 3/31/12 and $0.6M at 12/31/11

24 Revenue $Millions Flexible Model Drives Profit through Cycles $221 $277 $300 $255 $265 $268 EBITA % Quarterly Revenue EBITA % $ M 5-10% $ M 10-20% $ M 20-30% $ M 30-35%+ 200 $ $133 Q % EBITA $140 Q % EBITA $ F Flexible Manufacturing & Variable Costs Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2F

25 Recent Financials & Outlook

26 $ Millions z Q Revenue in Line Profit Ahead of Guidance Revenue decreased 45% from Q1 11 GAAP EPS was $0.42 and non-gaap EPS was $0.49 Gross margin was 46.7% Operating expenses declined $5M sequentially to $43M Adjusted EBITA was $25M, or 18% of sales $140 $255 Q1 Q $1.44 $19 $61 $0.49 Revenue Non-GAAP Net Income Non-GAAP EPS

27 Q Revenue & Adjusted EBITA Total Revenue: $140M LED & Solar $96M 32% Data Storage $44M Down from $215M in Q MOCVD at $82M in Q % Up from $40M in Q ($M) Q1 12 Q1 11 Adj EBITA $17.5 $81.0 ($M) Q1 12 Q1 11 Adj EBITA $9.0 $12.2

28 Q Bookings Weak as Anticipated Total Bookings: $113M LED & Solar ~$85M 26% Data Storage $29M Down from $198M in Q1 2011; up 26% from $67M in Q MOCVD at $70M (+19% sequentially) and MBE at $15M (+71% sequentially) 74% Down from $33M reported Q1 2011

29 MOCVD Business Conditions Remain Muted Bookings improved modestly in Q 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, Taiwan (~80%) and key customers in China Pick-up in quoting activity

30 Foundation Businesses Balance MOCVD Cycles Data Storage and MBE provide: Customer and capital investment cycle diversity Exposure to hard drive, optical coating, wireless market growth Data Storage and MBE Revenue CAGR 25% $181M $198M Regional diversity (<10% revenues China, Korea, Taiwan) $127M Consistent quarterly EBITA 10-30% 1 Expect similar growth in 2012 on backlog tailwind Provide Growth, Earnings and Consistency Through MOCVD Cycles 1) Quarterly adjusted EBITA for Data Storage and MBE Combined

31 Growing Services Business Services business grew to nearly $100M in 2011, record Q $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 development support New VCE business resells refurbished tools with Veeco warranty 2012 Goal 40% G r o w t h

32 Q Guidance Q Revenue $ M Gross Margins 44-46% Operating Spending $43-46M Adjusted EBITA 12-17% GAAP EPS $ Non-GAAP EPS $ Note: Guidance is for Veeco s Continuing Operations See reconciliation to GAAP at end of presentation

33 2012 Outlook Unchanged $ M 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 year Maintain high R&D investment Highly-variable cost model

34 Investment Rationale Market Leaders We are the leader in each of our core technologies MOCVD, MBE, IBE/IBD and Advanced Thin Film Process Technologies Exceptional Technology Our people, technology and process knowledge enables us to deliver systems with the lowest CoO to the world s leading companies Tied to High Growth Markets LEDs for lighting, power electronics for energy conversion, hard drives, wireless chips and MEMS for cloud computing and state-of-the-art electronics High-Performance Organization Fast and agile culture featuring speed as a competitive differentiator, customers count on our flexibility and value proposition

35 Safe Harbor Statement 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 include the risk factors discussed in the Business Description and Management's Discussion and Analysis sections of Veeco's Annual Report on Form 10-K for the year ended December 31, 2011 and subsequent Quarterly Reports on Form 10-Q and current reports on Form 8-K. Veeco does not undertake any obligation to update any forward-looking statements to reflect future events or circumstances after the date of such statements. In addition, this presentation includes non-gaap financial measures. For GAAP reconciliation, please refer to the reconciliation section in this presentation as well as Veeco s financial press releases and 10-K and 10-Q filings available on Note: All results presented herein are for Veeco s Continuing Operations which excludes the Metrology business sold to Bruker Corporation on October 7, 2010 and reflects the discontinuation of Veeco s CIGS Solar Systems Business in the third quarter of 2011.