veeco investor presentation -...
TRANSCRIPT
Veeco Investor PresentationJuly 30, 2008
2 ©2008 Veeco Instruments Inc 073008 Investor Slides
Veeco Investment ThemesVeeco Investment Themes
Leading technology positions in our three businesses:– LED & Solar Process Equipment (MOCVD, MBE and Web Coaters)– Data Storage Process Equipment (Ion Beam and Slider)– Metrology (Auto AFM, Nano-Bio AFM, Optical)
Several high-growth market opportunities:– HB-LED– Solar– Nanotechnology - material science, life science and 3D in-fab
metrologyFocused on executing a financial turnaround:– Restructuring underway and having impact on 1st half ’08 results– Maximizing our diversified business model
3 ©2008 Veeco Instruments Inc 073008 Investor Slides
2008 Focus: Improving Veeco’s Performance2008 Focus: Improving Veeco’s Performance
Increase Top-Line Growth
Align R&D to best growth opportunities– 40% increases in MOCVD and
MBE; Nano-Bio also up in 2008 New product launches to support ’08 growthStrengthen management team –Tomeo (Sales) and Munch (Metrology)Improve global field sales and service organization
Profit Improvement Activities
During Q4’07/Q1’08, made significant progressCompleted 7.5% RIF; annualized savings $12M (>50% focused on DS operations)Additional “Right-sizing” of data storage business:Consolidated corporate headquarters: $1.8M savings annuallyAdditional cost cutting in Metrology due to semi market downturn
Veeco on track to deliver 13% revenue growth and dramatic profit improvement in 2008
4 ©2008 Veeco Instruments Inc 073008 Investor Slides
Q2 2008 Financials – Ahead of GuidanceQ2 2008 Financials – Ahead of Guidance($M except EPS)
*See reconciliation to GAAP at end of presentation
Q1 ’08
$109.3
$102.3
42%
$0.1
$5.3
$0.09
Q2 ’07
$112.5
$98.7
43%
($1.0)
$2.8
$0.05
Q2 ’08
$136.5
$114.4
42%
$6.2
$8.7
$0.16
Orders +21%
Revenues +16%
Gross Margin
Operating Income (Loss)
EBITA*
EPS (Non-GAAP)
5 ©2008 Veeco Instruments Inc 073008 Investor Slides
$33
$52 $52$36$45
$33
Second Quarter 2008 Segment ResultsSecond Quarter 2008 Segment Results
LED & Solar
Process Equipment
Data Storage Process
Equipment LED & Solar
Process Equipment
Data Storage Process
Equipment
(39%) (32%)
(29%)
(38%) (38%)
(24%)
Q2 08 Revenues ($M)$114 Million
Q2 08 Bookings ($M)$137 Million
POSITIVE BOOK-TO-BILL IN LED & SOLAR AND DATA STORAGE
MetrologyMetrology
6 ©2008 Veeco Instruments Inc 073008 Investor Slides
Q2 2008 Segment Performance Q2 2008 Segment Performance
$136.5
$32.7
$51.7
$52.1
Q2 08
$112.5
$34.8
$41.3
$36.4
Q2 07
+21%
-6%
+25%
+43%
∆
(4.1)
8.7
(1.2)
5.2
8.7
Q2 08
(3.0)
2.8+16%$98.8$114.4
Unallocated CorporateVeeco Total
0.4-16%$38.7$32.6Metrology
1.6+15%$32.0$36.7Data Storage
3.8+61%$28.0$45.1LED & Solar
Q2 07∆Q2 07Q2 08$m
RevenuesBookings EBITA*
*See reconciliation to GAAP at end of presentation
LED & Solar Process Equipment
8 ©2008 Veeco Instruments Inc 073008 Investor Slides
Q2 LED & Solar HighlightsQ2 LED & Solar Highlights
$45M revenues up 61% vs. prior year and up 7% sequentiallyLargest Veeco segment at 39% revenueEBITA $8.7M – Record level$52M orders, up 43% vs. last year & 35% sequentially– Latest GEN tools gaining traction– Multi-million $ orders from 5 LED customers in Taiwan & China– Multi-unit order from Spectrolab for III-V multi-junction solar
cells– Building strong ’09 backlog
Completed purchase of Mill Lane Engineering– Expands product line to include web coaters for flexible PV
applications– Global Solar Energy key customer
9 ©2008 Veeco Instruments Inc 073008 Investor Slides
LED & Solar Process EquipmentLED & Solar Process Equipment
MOCVD
Web Coaters
MBE Systems
MBE Sources
• K465 MOCVD GaN B/G LED
• E475 MOCVD AsP R/O/Y LED and III-V Concentrator Solar Cells
• High Throughput tool set, excellent yield
• FastFlex™ Web Coaters for flexible PV applications
• CIGS Deposition• Complete line of vacuum processing tools
• MBE systems for III-V materials
• Applications including Solar, LED, Wireless, & Broad R&D
•Thermal Deposition Sources
• CIGS & other
10 ©2008 Veeco Instruments Inc 073008 Investor Slides
LED Market Highlights: Adoption Occurring in Broad-Based ApplicationsLED Market Highlights: Adoption Occurring in Broad-Based Applications
Laptop Backlighting: Apple & HP 13” – 15”Mobile devices/ cell phone flashAutomotive headlamps:– Audi R8 & Lexus 600h– Cadillac Escalade 1st SUV with a
full LED headlamp – Daytime running lights, stop
lightsEmerging Markets:– $269B for lighting China’s
national highways (DigiTimes) Big Screen TVs:– Samsung 40/52” & 70” LED TV
11 ©2008 Veeco Instruments Inc 073008 Investor Slides
LED Market Highlights: Multi-Year Growth OpportunityLED Market Highlights: Multi-Year Growth Opportunity
Exceptional, multi-year growth opportunityVeeco is a leading supplier of MOCVD technology 20-30 companies worldwide currently investing in MOCVD equipmentKey markets Taiwan, Korea, China, Japan, NA and EuropeVeeco scaling up process support, service, investment in next-gen technology
Strategies Unlimited LED Growth Forecast
2,000
4,000
6,000
8,000
10,000
12,000
020122007 2008 2009 2010 2011
$M
other illumination signals automotive
signs & displays other mobile mobile phones
20% CAGR
12 ©2008 Veeco Instruments Inc 073008 Investor Slides
Veeco’s High-Throughput MOCVD SystemsVeeco’s High-Throughput MOCVD Systems
TurboDisc K465 GaN modular platformHighest margin for B/G HB-LED manufacturersOnly automated, high capacity system Highest throughput & excellent yieldExtendable platform for long capital life
45 - 120% More Throughput
Highest margin for ROY HB-LED manufacturersAccurate process reproducibilityExcellent uniformity & repeatability Vacuum load-lock minimizes idle time Low maintenance
30 - 40% More Throughput
K SERIES E SERIES
13 ©2008 Veeco Instruments Inc 073008 Investor Slides
Veeco’s PV OpportunityVeeco’s PV Opportunity
Crystalline Si Thin Film
Mono-Si16-18%
Poly-Si14-16%
a-Si5-10%
CIGS8-14%
CdTe8-12%
III-Vs35-40%
Si Wafer Glass, Stainless Steel, Plastic Ge WaferCIGS = copper, indium, gallium, selenide
(Cu, In, Ga, Se)
Web Coaters & Thermal Deposition Sources
MBE Systems
MOCVD Systems
14 ©2008 Veeco Instruments Inc 073008 Investor Slides
Veeco’s Offering for Thin Film CIGS Veeco’s Offering for Thin Film CIGS
Sunlight
Window Layer - CdS
CIGS
Back Contact – Mo
Glass, Stainless, Plastic
TCO
Veeco
CIGS Thin Films Currently Deposited using Glass or Roll-to-Roll (Web) Systems
Veeco product line now includes Oxide, Metal and CIGS Deposition Processing capability using Web Coating systems
For CIGS layer, Veeco is leading manufacturer of thermal deposition sources providing a significant competitive advantage for CIGS web systems
15 ©2008 Veeco Instruments Inc 073008 Investor Slides
WW Solar Cell Consumption (MW)
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
MW
Other Thin Films
CIGS
Cadmium Telluride
Amorphous - Si
Other (i.e Ribbon)
Poly - Si
Mono-Si
2006-2010 CAGR% Total = 40.7%Cryst. Si = 37.1%Thin Film= 71.3%
WW Solar Market Growth ForecastsWW Solar Market Growth Forecasts
Thin Film
Crystalline Si
Source: Information Network, Photon Consulting
16 ©2008 Veeco Instruments Inc 073008 Investor Slides
Thin Film Projected CostsThin Film Projected Costs
CIGS Thin Film costs are estimated to be lower than silicon by 2011
17 ©2008 Veeco Instruments Inc 073008 Investor Slides
Why Veeco for Thin Films CIGS?Why Veeco for Thin Films CIGS?
We are thin film experts…CIGS complex thin film structure fits well in Veeco overall expertise and portfolio Veeco is already a leading provider of CIGS thermal source technologyOpportunity to combine other Veeco technologies – IBD, PVD, with Mill Lane expertiseEmerging customer base:– 20 thin film PV suppliers working on CIGS – early stage opportunity– Requires integrated process equipment solutions for mass production– Good opportunity for customer partnership and equipment innovation
Our estimate is that every 10MW capacity solar line requires $8-12M in MO, TCO and CIGS deposition equipmentOur “Sweet Spot” to integrate process and equipment
Data Storage Process Equipment
19 ©2008 Veeco Instruments Inc 073008 Investor Slides
Q2 Data Storage HighlightsQ2 Data Storage Highlights
Revenue $37M; up 15% vs. last year and up 52% sequentially– Customer “pull-ins” of delivery dates tied to wafer size change
programs & increased capacity requirements
EBITA $5.2M – strong recovery from EBITA loss in Q1– Improved profitability on a lower cost basis after rationalization
initiatives
Orders $52M – highest level since early 2006 – 25% increase vs. prior year & up 27% sequentiallyWell-aligned to customer capacity & technology requirements
20 ©2008 Veeco Instruments Inc 073008 Investor Slides
Advanced Dicing SystemAdvanced Lapping System
Physical Vapor Deposition Diamond-Like Carbon
Refocused Data Storage Process Equipment Product Line Refocused Data Storage Process Equipment Product Line
Ion Beam Etch and Deposition
IBE 420Si, IBE 350Si, IBE 350SeIBD-DS, IBD-LDD PVD-HR, PVD-1, PVDi DLC-X
Optium ASL 200 Optium ADS 160
21 ©2008 Veeco Instruments Inc 073008 Investor Slides
Data Storage TrendsData Storage Trends
Growth rates for TFMH & drives have slowed from prior yearsCustomers trends:– Industry consolidation– CapEx management
Veeco strategy: right size business to improve profits & maintain customer alignment:– Exited two product lines– Consolidated R&D and
engineering sites
Hard Drive Growth Forecast
Source: IDC May 2008
Heads
Platters
0M
100M
200M
300M
400M
500M
600M
700M
800M
900M
199219931994199519961997199819992000200120022003200420052006200720082009201020112012
$0B
$5B
$10B
$15B
$20B
$25B
$30B
$35B
$40B
$45B
$50B
Units Revenue
7% CAGR
9% CAGR
22 ©2008 Veeco Instruments Inc 073008 Investor Slides
CAPEX Drivers in a Maturing IndustryCAPEX Drivers in a Maturing Industry
Capacity8” wafer format: 50% increase in sliders/wafer…without investment in facility expansionRequires retooling in >50% of the process steps for comparable yields
TechnologyAreal density growth continues at 30-40% per year…drives tech spendingNew materials, new processes
Cost of OwnershipHDD manufacturing cost reduction driving lower cost-of-ownership tool sets and processesPVD for Alumina and Metals
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
2005 2006 2007 2008 2009 2010
Year
Ado
ptio
n [%
]
-350
-250
-150
-50
50
150
250
350
450
550
GB
SI
PMR
Areal Density Trend
TMR
2nd and 3rd Generation PMR
Metrology
24 ©2008 Veeco Instruments Inc 073008 Investor Slides
Q2 Metrology HighlightsQ2 Metrology Highlights
$33M revenues, down 16% from Q2 ’07 & down 10% sequentiallyReported EBITA loss of $1.5M$33M bookings, down 6% prior year but up 9% sequentiallyOnly business unit with significant exposure to semiconductor market. Trough level bookings & revenue– Market traction for new InSight Auto AFM slower than originally
anticipated
Nano-Bio & Optical instruments businesses also weak in ’08 due to sluggish overall research spendingCost cutting in Metrology to improve profitability in 2H ’08Mark Munch joined Feb. ’08 – new leadership to drive improvements…marketing, new product introductions, customer satisfaction, gross margins
25 ©2008 Veeco Instruments Inc 073008 Investor Slides
Veeco MetrologyVeeco Metrology
Veeco is a leading provider of:– Auto AFMs for semiconductor, data storage applications, 3D
“nanoscale” metrology– Optical Metrology for broad industrial applications– Nano-Bio AFMs for scientific research; nanotech; life science
applications
Auto AFM STI Image SPM Polymer Image Optical Profiler Sensor Image
26 ©2008 Veeco Instruments Inc 073008 Investor Slides
New Products Provide Growth OpportunityNew Products Provide Growth Opportunity
Innova SPM: New modes in Q1– Lower cost option for university
researchersHarmoniX SPM Mode
– Quantitative measurementsDektak 150 – High-performance research/ industrial
metrology stylus profiler– High repeatability, low noise, large
scanning rangeWyko NT9100: First Shipments Q1– “More affordable” table-top optical
profiler for optics, solar, biomedical, automotive
Wyko HD 9800: First Shipment Q1– New optical profiler for HDD
applications
Innova SPM
Wyko NT 9100
27 ©2008 Veeco Instruments Inc 073008 Investor Slides
New InSight 3DAFM: Improved Performance Expands Our TAMNew InSight 3DAFM: Improved Performance Expands Our TAM
45nm node measurement capability…32nm roadmapIndustry highest AFM depth & CD throughput: 30 wph, 9 sites<1nm measurement uncertaintyProduction based metrology– Ease of use enhancements– Improved reliability
10x improvement in probe lifetimes – better CoOCustomer demos increasing in 2H ‘08
Outlook and Financial Model
29 ©2008 Veeco Instruments Inc 073008 Investor Slides
2008 Performance Improvements2008 Performance Improvements
Goal is revenue growth > 10% to $450-455MOperating spending forecasted to decline as a percentage of sales (38% in ’07 to 35-36% ’08)Continued focus on gross margin improvements:– On track to achieve 42% gross margin in 2008 – Driving margin improvement independent of volume
• Better pricing• Global supply chain initiatives• Outsourcing
Cost containment focus so that spending does not get ahead of revenue growth…continued improvements in expense structure
30 ©2008 Veeco Instruments Inc 073008 Investor Slides
Veeco’s 2008 Outlook: >10% Revenue GrowthVeeco’s 2008 Outlook: >10% Revenue Growth
$450-455M$440M$402MTOTAL
$135-140M$157-160M$150MMetrology
$145-150M$137-143M$136MData StorageProcess Equipment
$165-170M*$140-145M$116MLED & Solar Process Equipment
July 2008 Guidance
Feb 2008 Guidance
2007Revenue
* LED & Solar Guidance includes $10-15M for Mill Lane Acquisition
LED & SOLAR and DATA STORAGE Businesses Running Ahead of Original Revenue Guidance…Weakness in Semi and Research Hurting Metrology
31 ©2008 Veeco Instruments Inc 073008 Investor Slides
Q3 ’08 GuidanceQ3 ’08 Guidance
Q3 ‘08 Revenues $113-$118 million
Q3 ‘08 Earnings ($0.12) – ($0.03) per share GAAP
Non-GAAP EPS $0.10 - $0.15[using 35% tax rate and excluding $3.7M charge related to mutually agreed termination of employment agreement for Veeco’s former CEO;$0.7M for Metrology restructuring; $0.4M purchase accounting adjustment to write up inventory to fair value (Mill Lane); amortization $3.1M.]
Q3 ‘08 Orders $113-$118 million
32 ©2008 Veeco Instruments Inc 073008 Investor Slides
Gross Margin Improvement ModelGross Margin Improvement Model
5-7%11 - 14%5-7%7.6%2.7%3.8%EBITA (%)
35-36%32 - 34%35-36%34.1%37.6%34.1%Operating Expenses
42%45%42%41.7%40.3%37.9%TOTAL
45-46%50%45%43.8%44.1%39.3%Metrology
40-41%43%40%40.9%38.1%37.2%Process Equipment
Gross Margin
$450-455$135*$113-$118$114.4$402$106.8Revenue ($M)
2008 Forecast
Peak QuarterTargets
Q3’08 FQ2’082007 Full YearQ4 2007
*Peak Quarter Margins Require >$40M Metrology Revenues
33 ©2008 Veeco Instruments Inc 073008 Investor Slides
Veeco Balance Sheet Veeco Balance Sheet
December 31, 2007June 30, 2008
$273.7$281.7Shareholder’s Equity
146.6146.4Long-Term Debt (including current portion)
529.3542.8Total Assets
66.166.5Fixed Assets
174.5178.6Working Capital
$117.1$109.6Cash and Investments
(in millions)
34 ©2008 Veeco Instruments Inc 073008 Investor Slides
Veeco Investment ThemesVeeco Investment Themes
Leading technology positions in our three businesses:– LED & Solar Process Equipment (MOCVD, MBE and Web Coaters)– Data Storage Process Equipment (Ion Beam and Slider)– Metrology (Auto AFM, Nano-Bio AFM, Optical)
Several high-growth market opportunities:– HB-LED– Solar– Nanotechnology - material science, life science and 3D in-fab
metrologyFocused on executing a financial turnaround:– Restructuring underway and having impact on 1st half ’08 results– Maximizing our diversified business model
35 ©2008 Veeco Instruments Inc 073008 Investor Slides
Safe Harbor StatementSafe Harbor Statement
To the extent that this presentation discusses expectations or otherwise make 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 factors 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, 2007 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 www.veeco.com.
36 ©2008 Veeco Instruments Inc 073008 Investor Slides
Back-Up and Reconciliation SlidesBack-Up and Reconciliation Slides
37 ©2008 Veeco Instruments Inc 073008 Investor Slides
Q2 and 1H ’08 Reconciliation TableQ2 and 1H ’08 Reconciliation Table
NOTE - The above reconciliation is intended to present Veeco's operating results, excluding certain items and providing income taxes at a 35% statutory rate. This reconciliation is not in accordance with, or an alternative method for, generally accepted accounting principles in the United States, and may be different from similar measures presented by other companies. Management of the Company evaluates performance of its business units based on EBITA, which is the primary indicator used to plan and forecast future periods. The presentation of this financial measure facilitates meaningful comparison with prior periods, as management of the Company believes EBITA reports baseline performance and thus provides useful information.
1. During the first quarter of 2008, the Company recorded a restructuring charge of $2.9 million, consisting of $2.6 million of costs associated with the consolidation and relocation of the lease for our Corporate headquarters, and $0.3 million of personnel severance costs.
2. During the first quarter of 2008, the Company recorded a $0.3 million asset impairment charge related to fixed asset write-offs associated with the consolidation and relocation of our Corporate headquarters. 3. During the first quarter of 2007, the Company repurchased $56.0 million aggregate principal amount of its 4.125% convertible subordinated notes. As a result of these repurchases, the Company recorded a gain from the early
extinguishment of debt in the amount of $0.7 million.
(1)
(2)
(3)
June 30, 2008 June 30, 2007 June 30, 2008 June 30, 2007
Operating income (loss) $6,230 ($1,010) $6,382 $728Adjustments:Amortization expense 2,426 2,368 4,382 6,277Restructuring expense - 1,445 2,875 1,445 Asset impairment charge - - 285 - Earnings before interest, income taxes and amortization
excluding certain items ("EBITA") 8,656 2,803 13,924 8,450Interest expense, net 969 772 1,861 1,591Gain on extinguishment of debt - - - (738) Adjustment to exclude gain on extinguishment of debt - - - 738 Earnings excluding certain items before income taxes 7,687 2,031 12,063 6,859Income tax provision at 35% 2,690 711 4,222 2,401Noncontrolling interest, net of income tax provision at 35% (46) (149) (95) (233)Earnings excluding certain items $5,043 $1,469 $7,936 $4,691Earnings excluding certain items per diluted share $0.16 $0.05 $0.25 $0.15Diluted weighted average shares outstanding 31,590 31,263 31,435 31,278
Three months ended Six months ended
38 ©2008 Veeco Instruments Inc 073008 Investor Slides
Q2 and Six Month Segment DataQ2 and Six Month Segment Data
June 30, 2008 June 30, 2007 June 30, 2008 June 30, 2007
LED & Solar Process EquipmentBookings 52.1$ 36.4$ 90.8$ 72.8$ Revenues 45.1 28.0 87.2 50.4 Operating income 7.8 2.8 15.8 2.3 Amortization expense 1.0 1.0 1.5 3.3 EBITA 8.8 3.8 17.3 5.6
Data Storage Process EquipmentBookings 51.7 41.3 92.3 73.6 Revenues 36.7 32.0 60.9 67.7 Operating income 4.3 0.7 1.7 2.1 Amortization expense 0.9 0.9 1.9 1.9 Restructuring expense - - 0.1 - EBITA 5.2 1.6 3.7 4.0
MetrologyBookings 32.7 34.8 62.7 72.0 Revenues 32.6 38.7 68.7 79.8 Operating (loss) income (1.6) (1.3) (0.4) 2.3 Amortization expense 0.4 0.3 0.8 0.7 Restructuring expense - 1.4 0.2 1.4 EBITA (1.2) 0.4 0.6 4.4
Unallocated CorporateOperating loss (4.2) (3.3) (10.8) (6.0) Amortization expense 0.1 0.2 0.2 0.4 Restructuring expense - 0.1 2.6 0.1 Asset impairment charge - - 0.3 - EBITA (4.1) (3.0) (7.7) (5.5)
TotalBookings 136.5 112.5 245.8 218.4 Revenues 114.4 98.7 216.8 197.9 Operating income (loss) 6.3 (1.1) 6.3 0.7 Amortization expense 2.4 2.4 4.4 6.3 Restructuring expense - 1.5 2.9 1.5 Asset impairment charge - - 0.3 - EBITA 8.7$ 2.8$ 13.9$ 8.5$
** Refer to footnotes on Reconciliation of operating income to earnings excluding certain items
Six months endedThree months ended
($Ms)
39 ©2008 Veeco Instruments Inc 073008 Investor Slides
Q3 Guidance Reconciliation TableQ3 Guidance Reconciliation Table
NOTE - The above reconciliation is intended to present Veeco's operating results, excluding certain items and providing income taxes at a 35% statutory rate. This reconciliation is not in accordance with, or an alternative method for, generally accepted accounting principles in the United States, and may be different from similar measures presented by other companies. Management of the Company evaluates performance of its business units based on EBITA, which is the primary indicator used to plan and forecast future periods. The presentation of this financial measure facilitates meaningful comparison with prior periods, as management of the Company believes EBITA reports baseline performance and thus provides useful information.
1. During the third quarter of 2008, the Company plans to record a restructuring charge of $3.7 million associated with the termination of the employment agreement for our former CEO pursuant to the successful transition of the new CEO and a charge of $0.7 million for Metrology restructuring.
2. During the third quarter of 2008, the Company plans to record a purchase accounting adjustment of $0.4 million to Cost of Sales associated with the acquisition of Mill Lane Engineering.
LOW HIGH
Operating (loss) income ($2,000) $600
Amortization expense 3,100 3,100
Restructuring expense 4,400 4,400
Purchase accounting adjustment 400 400
Earnings before interest, income taxes and amortization 5,900 8,500and excluding certain items ("EBITA")
Interest expense, net 1,000 1,000
Earnings excluding certain items before income taxes 4,900 7,500
Income tax provision at 35% 1,715 2,625
Earnings excluding certain items $3,185 $4,875
Earnings excluding certain items per diluted share $0.10 $0.15
Diluted weighted average shares outstanding 31,800 31,800
Guidance for theThree months ended June 30, 2008
(1)
(2)
(1)
(2)
$ in 000 except EPS
40 ©2008 Veeco Instruments Inc 073008 Investor Slides
2007 Quarterly Segment Data2007 Quarterly Segment Data
March 31, June 30, September 30, December 31,2007 2007 2007 2007
LED & Solar Process EquipmentBookings 36.4$ 36.4$ 48.7$ 42.5$ Revenues 22.4 28.0 31.8 33.7 Operating (loss) income (0.5) 2.8 2.7 4.7 Amortization expense 2.3 1.0 0.5 0.5 EBITA 1.8 3.8 3.2 5.2
Data Storage Process EquipmentBookings 32.3 41.3 32.2 35.8 Revenues 35.7 32.1 31.1 37.3 Operating income (loss) 1.4 0.6 (2.2) (6.4) Amortization expense 1.0 1.0 1.0 1.0 Restructuring expense - - 0.2 2.3 Asset impairment charge - - - 1.1 Inventory write-off - - - 4.8 EBITA 2.4 1.6 (1.0) 2.8
MetrologyBookings 37.2 34.8 37.4 36.6 Revenues 41.1 38.7 34.8 35.8 Operating income (loss) 3.6 (0.6) (0.8) (2.4) Amortization expense 0.4 0.3 0.4 0.3 Restructuring expense - 0.6 0.6 EBITA 4.0 0.3 (0.4) (1.5)
Unallocated CorporateOperating loss (2.8) (3.9) (3.9) (4.4) Amortization expense 0.2 0.1 0.1 0.2 Restructuring expense - 0.8 0.3 1.8 EBITA (2.6) (3.0) (3.5) (2.4)
TotalBookings 105.9 112.5 118.3 114.9 Revenues 99.2 98.8 97.7 106.8 Operating income (loss) 1.7 (1.1) (4.2) (8.5) Amortization expense 3.9 2.4 2.0 2.0 Restructuring expense - 1.5 0.5 4.7 Asset impairment charge - - - 1.1 Inventory write-off - - - 4.8 EBITA 5.6$ 2.8$ (1.7)$ 4.1$
Three months ended
Veeco Instruments Inc. and Subsidiaries Segment Revenues, Bookings, and Reconciliation
(In millions)(Unaudited)
of Operating (Loss) Income to EBITA
41 ©2008 Veeco Instruments Inc 073008 Investor Slides
$63
$91 $92$61$87
$69
First Six Month 2008 Segment ResultsFirst Six Month 2008 Segment Results
LED & Solar
Process Equipment
Data Storage Process
Equipment
Metrology
LED & Solar
Process Equipment
Data Storage Process
Equipment
Metrology
(40%) (28%)
(32%)
(37%) (37%)
(26%)
Six Month 08 Revenues ($M)$217 Million
Six Month 08 Bookings ($M)$246 Million
POSITIVE BOOK-TO-BILL IN LED & SOLAR AND DATA STORAGE
42 ©2008 Veeco Instruments Inc 073008 Investor Slides
$146
$164$142$136
$116
$150
Focus on Our Three Business SegmentsFocus on Our Three Business Segments
LED & Solar
Process Equipment
Data Storage Process
Equipment
Metrology
LED & Solar
Process Equipment
Data Storage Process
Equipment
Metrology
(29%)
(34%)
(37%)
(36%)(31%)
(33%)
2007 Revenues ($M)$402 Million
2007 Bookings ($M)$452 Million
Each Business Has Unique Growth and Profit Opportunities
43 ©2008 Veeco Instruments Inc 073008 Investor Slides
TurboDisc K465 GaN Advantage TurboDisc K465 GaN Advantage
TurboDisc K465 GaN modular platformHighest margin for B/G HB-LED manufacturersOnly automated, high capacity system Highest throughput & excellent yieldExtendable platform for long capital life
45-120% More Throughput
9030Competitor B
13842Competitor A
20245TurboDisc K465 GaN
Wafers/Day
2” Wafer Capacity
44 ©2008 Veeco Instruments Inc 073008 Investor Slides
TurboDisc E475 As/P Advantage TurboDisc E475 As/P Advantage
Production proven E475
Highest margin for ROY HB-LED manufacturers– 30-40% more
throughput than competition
Accurate process reproducibilityExcellent uniformity & repeatability Vacuum load-lock minimizes idle time Low maintenance
2,2112,9054” Wafer
8,01011,0382” Wafer
CompetitorVeeco
Wafers/month
45 ©2008 Veeco Instruments Inc 073008 Investor Slides
III-V Solar Cells Provide Lowest Cost for Satellite Solar Cells & Terrestrial PVIII-V Solar Cells Provide Lowest Cost for Satellite Solar Cells & Terrestrial PV
E475 As/P TurboDisc MOCVD platformProvides high volume, low cost III-V solar cells 40.7% solar cell efficiency –highest in the world50% more throughput than the competition In-situ process controls for excellent repeatability and yieldsExcellent uniformity High purity epi layer films assures maximum solar cell performance