Veeco Instruments Inc. · NASDAQ:VECO
Veeco Instruments — Investor Presentation (November 2021)
30 slides from Veeco Instruments's investor presentation, November 2021
Slide 1: Investor Presentation November 2021
Investor Presentation November 2021
Slide 2: Safe Harbor
Safe Harbor This presentation contains “forward-looking statements”, within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, as amended, that are based on management’s expectations, estimates, projections and assumptions. Words such as “expects,
Slide 3: Who is Veeco
Who is Veeco Patents ~500 Global provider of Differentiated portfolio of semiconductor capital high-value technology that has equipment that addresses Employees evolved with market trends complex materials challenges >1000 Technology leadership across four key end markets, with 2021 Revenue* opportu
Slide 4: Evolution Aligned with Market Opportunities
Evolution Aligned with Market Opportunities 1990s & 2000s 2010-2011 2017 2018 2019/2020 and Beyond Exited Commodity LED Business Ion Beam GaN MOCVD for LED Leader in Laser Necessitated a Deposition & Etch of backlighting LCD displays & Annealing and Transformation and a magnetic material for general
Slide 5: Transformation Accomplishments
Transformation Accomplishments ▪ Completed Functional Reorganization o Functional Structure, New CFO and Head of Sales & Service o Optimized R&D Investments ▪ Divested Non-core Product Line ▪ Improved Operating Performance (GM%, Opex%, Op Inc.%) ▪ Improved Liquidity and Capital Structure Extending D
Slide 6: Our Customers Drive the Trends
Our Customers Drive the Trends Semiconductor Data Storage Compound Semiconductor Scientific & Industrial Veeco is a long-term partner of industry leaders driving today’s megatrends in each of our markets 6 Investor Presentation | © 2021 Veeco Instruments Inc.
Slide 7: Significant Market Opportunities
Significant Market Opportunities End-Market Served Primary Drivers Primary Veeco Technologies Semiconductor High Performance Computing Laser Annealing Ion Beam / AP Lithography Compound 5G / Power / Photonics / Wet Processing Semiconductor MicroLED MOCVD Data Storage Cloud / Data Center Ion Beam Sci
Slide 8: 2021 Evaluation Landscape
2021 Evaluation Landscape Number of Eval Systems by End-Market Shipped / Under Forecasted Evaluation US (2) Asia Semiconductor 7 1 (8) Compound Semiconductor 2 n/a 10 evaluation systems in key markets at leading semi and compound semi customers 8 Investor Presentation | © 2021 Veeco Instruments Inc.
Slide 9: Semiconductor Solutions with Laser Annealing
Semiconductor Solutions with Laser Annealing Market Drivers The Veeco Difference Enabling Advanced Nodes ▪ Artificial Intelligence Veeco’s Laser Annealing systems ▪ High Performance Computing allow customers to perform their annealing steps with great accuracy ▪ Graphical Processing Units ▪ Very hig
Slide 10: Increasing Transistor Density
EUV Mask Blank for Semiconductor End-Market Market Drivers The Veeco Difference Enabling Advanced Nodes ▪ Artificial Intelligence Veeco supplies best-in-class Ion ▪ High Performance Computing Beam Deposition systems to the EUV 28nm 14nm 10nm 7nm 5nm ▪ Autonomous Driving Lithography mask blank suppli
Slide 11: Advanced Packaging Solutions with Lithography
Advanced Packaging Solutions with Lithography Market Drivers The Veeco Difference Enabling Better System Performance ▪ Artificial Intelligence Veeco’s Advanced Packaging Lithography is the process of choice: ▪ Automotive ▪ Fan-out wafer level packaging at ▪ Mobility top foundries and OSATs ▪ Graphic
Slide 12: Compound Semi Solutions with Wet Processing & MOCVD
Compound Semi Solutions with Wet Processing & MOCVD Market Drivers The Veeco Difference RF Filters & Devices (5G) Wet Processing As number of bands and frequencies increase with 5G, filter Lift-off – Strip – Clean – Etch content is increasing. GaN based RF devices are more efficient than silicon bas
Slide 13: Data Storage Solutions with Ion Beam Technology
Data Storage Solutions with Ion Beam Technology Decades of investment have driven deep customer partnerships Digital/ Information Revolution Heads & Steps per Head Market Drivers The Veeco Difference Projected to Increase ▪ Data Center / Cloud ▪ Enterprise HDDs have a ~10X cost ▪ Edge Computing adva
Slide 14: Financial Update
MAKING A MATERIAL DIFFERENCE Financial Update See <1)
Slide 15: Improving Financial Trends (2019 – 2021) (Non-GAAP)
Improving Financial Trends (2019 – 2021) (Non-GAAP) Revenue^ ($m) Gross Margin (%) ~580 454 43% ~42% 419 39% 2019 2020 2021* 2019 2020 2021* OPEX ($m, %) Diluted EPS($) 37% ~1.36 32% 0.86 ~28% 156 144 (0.03) 2019 2020 2021* 2019 2020 2021* Improving financials demonstrate our transformation progress
Slide 16: Balance Sheet and Cash Flow Highlights
Balance Sheet and Cash Flow Highlights $ millions Q2 21 Q3 21 Cash & Short-Term Investments 330 336 Accounts Receivable 108 87 Inventories 164 171 Accounts Payable 55 49 Long-Term Debt 328 332 Cash Flow from Operations 10 30 DSO (days) 67 52 DIO 167 173 DPO 58 51 16 Investor Presentation | © 2021 Ve
Slide 17: Convertible Notes
Convertible Notes Annual Annual Initial Principal Convertible Debt Coupon Cash Non-Cash Conversion Amount Interest Interest Price Convertible Notes Due Jan 2023 $132M 2.7% $3.6M $5.6 $40.03 As of Convertible Notes Due Jan 2025 $133M 3.5% $4.6M $4.9 $24.00 September 30, 2021 Convertible Notes Due Jun
Slide 18: 2021 Priorities – Building on a Profitable Growth Plan
2021 Priorities – Building on a Profitable Growth Plan Growth Phase of Transformation Maintain Resilience Focus Execute Near-Term Prepare Long-Term essential business profitability & products 2021 growth 2022 & beyond ▪ Employees ▪ Defend foundational businesses ▪ Laser Annealing ▪ Aggressively inve
Slide 19: Thank you
MAKING A MATERIAL DIFFERENCE 8
Slide 20: Backup & Financial Tables
MAKING A MATERIAL DIFFERENCE Backup & Financial Tables
Slide 21: Q3 2021 Revenue by Market & Region
Q3 2021 Revenue by Market & Region Revenue by Market Revenue by Region Scientific & Other EMEA 9% 8% China Semiconductor Rest of Data Storage 18% 40% 26% APAC $150M 51% United States 15% 33% Compound Semiconductor Revenue Trend ($M) Q3 20 Q2 21 Q3 21 Semiconductor 34 54 76 Rest of World is less than
Slide 22: Q3 Operating Results
Q3 Operating Results GAAP Non-GAAP In millions (except per share amounts) Q2 21 Q3 21 Q2 21 Q3 21 Revenue $146.3 $150.2 $146.3 $150.2 Gross Profit 60.2 63.2 60.8 63.9 Gross Margin 41.1% 42.0% 41.6% 42.6% Operating Expenses 46.9 46.8 39.6 39.6 Operating Income / (Loss) 13.3 16.4 21.3 24.3 Net Income
Slide 23: Q4 2021 Guidance
Q4 2021 Guidance GAAP Non-GAAP Revenue $140M - $160M $140M - $160M Gross Margin 41% - 43% 41% - 43% Operating Expenses $49M - $51M $41M - $43M Net Income (Loss) $1M - $11M $14M - $24M Earnings (Loss) Per Share $0.04 – $0.22 $0.27 - $0.45 Diluted Shares 54M 52M 23 Investor Presentation | © 2021 Veeco
Slide 24: Historical Revenue by End-Market
Historical Revenue by End-Market $M 2019 2020 2021 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Semiconductor 44.6 37.8 41.8 51.3 175.6 37.4 37.5 33.6 57.4 165.9 51.6 53.7 76.3 Compound Semi 15.0 16.4 26.3 28.1 85.9 18.4 17.8 26.6 45.2 107.9 24.8 24.2 23.3 Data Storage 19.6 22.7 24.1 17.6 84.1 38.9 28.3 3
Slide 25: Effect of Convertible Notes on Diluted Share Count
Effect of Convertible Notes on Diluted Share Count (Effective through 12/31/21) GAAP Approximate Non-GAAP Approximate Incremental Dilutive Shares Incremental Dilutive Shares (in thousands) (in thousands) Average Stock Price 2025 2027 2025 2027 per Common Share Notes Notes Total Notes Notes Total $15
Slide 26: Effect of New Accounting Standard for Convertible Notes on Diluted EPS
Effect of New Accounting Standard for Convertible Notes on Diluted EPS (Effective Q1 2022) Quarterly GAAP Non-GAAP* Reduction to Reduction to EPS threshold Incremental EPS threshold Incremental Interest expense Interest expense before effect of Dilutive Shares** before effect of Dilutive Shares** fo
Slide 27: 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: sh
Slide 28: Supplemental Information—GAAP to Non-GAAP Reconciliation
Supplemental Information—GAAP to Non-GAAP Reconciliation In millions Q1 21 Q2 21 Q3 21 2020 2019 In millions, except per share amounts Q1 21 Q2 21 Q3 21 2020 2019 Net sales $133.7 $146.3 $150.2 $454.2 $419.3 GAAP Basic weighted average shares 48.6 48.7 49.0 48.4 47.5 GAAP gross profit 54.9 60.2 63.2
Slide 29: Q3 2021 Actual: GAAP to Non-GAAP Reconciliation
Q3 2021 Actual: GAAP to Non-GAAP Reconciliation Non-GAAP Adjustments Share-Based In millions, except per share amounts GAAP Compensation Amortization Other Non-GAAP Net Sales $150.2 $150.2 Gross Profit 63.2 0.6 0.2 63.9 Gross Margin 42.0% 42.6% Operating Expenses 46.8 (3.5) (3.0) (0.6) 39.6 Operatin
Slide 30: Q4 2021 Guidance: GAAP to Non-GAAP Reconciliation
Q4 2021 Guidance: GAAP to Non-GAAP Reconciliation Non-GAAP Adjustments Share-Based In millions, except per share amounts GAAP Compensation Amortization Other Non-GAAP Net Sales $140–$160 $140–$160 Gross Profit 58–69 1 — — 59–70 Gross Margin 41%–43% 41%–43% Operating Expenses $48–$50 (3) (3) (1) $41–
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