8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):  August 1, 2016

VEECO INSTRUMENTS INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation) 0-16244
(Commission
File Number) 11-2989601
(IRS Employer
Identification No.)

Terminal Drive, Plainview, New York  11803

(Address of principal executive offices)

(516) 677-0200
(Registrant’s telephone number, including area code)

Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02   Results of Operations and Financial Condition.

On August 1, 2016, Veeco Instruments Inc. issued a press release announcing its financial results for the quarter ended June 30, 2016.  In connection with the release and the related conference call, Veeco posted a presentation relating to its second quarter 2016 financial results on its website (www.veeco.com).  Copies of the press release and presentation are furnished as Exhibit 99.1 and Exhibit 99.2 to this report.

Item 9.01   Financial Statements and Exhibits.

(d)Exhibits.

Exhibit	Description
99.1	Press release issued by Veeco dated August 1, 2016
99.2	Veeco Q2 2016 Conference Call, August 1, 2016

The information in this report, including the exhibits, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section, nor shall this information or these exhibits be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

August 1, 2016	VEECO INSTRUMENTS INC.
	By:	/s/ Gregory A. Robbins
	Name:	Gregory A. Robbins
	Title:	Senior Vice President and General Counsel

EXHIBIT INDEX

Exhibit	Description
99.1	Press release issued by Veeco dated August 1, 2016
99.2	Veeco Q2 2016 Conference Call, August 1, 2016

2

EX-99.1

EXHIBIT 99.1

NEWS

VEECO REPORTS SECOND QUARTER 2016 FINANCIAL RESULTS

Second Quarter 2016 Results Summary:

·Revenues of $75.3 million

·GAAP net loss per share of $0.82, includes a pre-tax charge of ~$16 million associated with the restructuring plans

·Non-GAAP net loss per share of $0.19

·Non-GAAP adjusted EBITDA of negative $2.8 million

Plainview, N.Y., August 1, 2016 — Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its second fiscal quarter ended June 30, 2016. Results are reported in accordance with U.S. generally accepted accounting principles (“GAAP”) and are also reported adjusting for certain items (“Non-GAAP”). A reconciliation between GAAP and Non-GAAP operating results is provided at the end of this press release.

U.S. dollars in millions, except per share data
GAAP Results	Q2 ‘16			Q2 ‘15
Revenue	$	75.3		$	131.4
Net income (loss)	$	(32.1	)	$	(8.4	)
Diluted earnings (loss) per share	$	(0.82	)	$	(0.21	)

Non-GAAP Results	Q2 ‘16			Q2 ‘15
Net income (loss)	$	(7.6	)	$	8.4
Adjusted EBITDA	$	(2.8	)	$	12.8
Diluted earnings (loss) per share	$	(0.19	)	$	0.20

“Veeco closed out a difficult first half of 2016 delivering second quarter results which were in line with our expectations and underscore our focus on operational execution,” commented John R. Peeler, Chairman and Chief Executive Officer.

“As previously communicated, we have taken decisive steps aimed at improving our through-cycle profitability by reducing fixed costs and streamlining our operations. This plan will enable us to lower our quarterly adjusted EBITDA breakeven level to between $75 and $80 million in revenue, without compromising our ability to capitalize on growth opportunities. Looking ahead, we see positive indications that should lead to a pick-up in demand for our Metal Organic Chemical Vapor Deposition (“MOCVD”) equipment over the near term,” Mr. Peeler concluded.

The restructuring plan involves the consolidation of three manufacturing operations and streamlining of field and administrative functions. The plan is expected to be substantially completed by the end of 2016 and to result in annualized savings of approximately $20 million starting in the first quarter of 2017.  As a result of these actions, the company recorded a pre-tax charge of approximately $16 million in the second quarter.

Guidance and Outlook

The following guidance is provided for Veeco’s third quarter 2016:

·Revenue is expected to be in the range of $70 million to $85 million

·GAAP Net Income (loss) is expected to be in the range of ($24) million to ($18) million and earnings (loss) per share is expected to be in the range of ($0.62) to ($0.46)

·Non-GAAP Net Income (loss) is expected to be in the range of ($10) million to ($4) million and earnings (loss) per share is expected to be in the range of ($0.26) to ($0.10)

·Adjusted EBITDA (loss) is expected to be in the range of ($6) million to breakeven

Please refer to the tables at the end of this press release for further details.

Conference Call Information

A conference call reviewing these results has been scheduled for today, August 1, 2016 starting at 5:00pm ET. To join the call, dial 1-888-455-2296 (toll free) or 1-719-325-2454 and use passcode 7244577. The call will also be webcast live on the Veeco website at ir.veeco.com. A replay of the webcast will be made available on the Veeco website beginning at 8:00pm ET this evening. We will post an accompanying slide presentation to our website prior to the beginning of the call.

About Veeco

Veeco’s process equipment solutions enable the manufacture of LEDs, displays, power electronics, compound semiconductors, hard disk drives, semiconductors, MEMS and wireless chips. We are the leader in MOCVD, MBE, Ion Beam, Wet Etch single wafer processing and other advanced thin film process technologies. Our high performance systems drive innovation in energy efficiency, consumer electronics and network storage and allow our customers to maximize productivity and achieve lower cost of ownership. For information on our company, products and worldwide service and support, please visit www.veeco.com.

To the extent that this news release 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 factors include the risks 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, 2015 and in our subsequent quarterly reports on Form 10-Q, current reports on Form 8-K and press releases. Veeco does not undertake any obligation to update any forward-looking statements to reflect future events or circumstances after the date of such statements.

-financial tables attached-

Veeco Contacts:
Investors:	Media:
Shanye Hudson 516-677-0200 x1272	Jeffrey Pina 516-677-0200 x1222
shudson@veeco.com	jpina@veeco.com

Veeco Instruments Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016			2015
Net sales	$	75,348		$	131,410		$	153,359		$	229,751
Cost of sales	43,909			82,341			89,964			145,545
Gross profit	31,439			49,069			63,395			84,206
Operating expenses, net:
Selling, general, and administrative	19,995			24,365			39,834			47,247
Research and development	21,543			20,119			43,653			38,704
Amortization	5,273			7,979			10,524			15,941
Restructuring	2,095			683			2,195			3,040
Asset impairment	13,627			—			13,627			126
Other, net	159			(51		)	88			(1,002		)
Total operating expenses, net	62,692			53,095			109,921			104,056
Operating income (loss)	(31,253		)	(4,026		)	(46,526		)	(19,850		)
Interest income, net	185			119			453			280
Income (loss) before income taxes	(31,068		)	(3,907		)	(46,073		)	(19,570		)
Income tax expense (benefit)	1,014			4,479			1,542			7,926
Net income (loss)	$	(32,082	)	$	(8,386	)	$	(47,615	)	$	(27,496	)
Income (loss) per common share:
Basic	$	(0.82	)	$	(0.21	)	$	(1.22	)	$	(0.69	)
Diluted	$	(0.82	)	$	(0.21	)	$	(1.22	)	$	(0.69	)
Weighted average number of shares:
Basic	38,965			39,693			39,035			39,666
Diluted	38,965			39,693			39,035			39,666

Veeco Instruments Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

	June 30, 2016		December 31, 2015
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	257,641	$	269,232
Short-term investments	73,211		116,050
Accounts receivable, net	41,695		49,524
Inventories	90,771		77,469
Deferred cost of sales	2,590		2,100
Prepaid expenses and other current assets	20,356		22,760
Assets held for sale	11,177		5,000
Total current assets	497,441		542,135
Property, plant and equipment, net	62,981		79,590
Intangible assets, net	121,380		131,674
Goodwill	114,908		114,908
Deferred income taxes	1,384		1,384
Other assets	21,056		21,098
Total assets	$	819,150	$	890,789
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	34,883	$	30,074
Accrued expenses and other current liabilities	35,113		49,393
Customer deposits and deferred revenue	65,753		76,216
Income taxes payable	654		6,208
Current portion of long-term debt	354		340
Total current liabilities	136,757		162,231
Deferred income taxes	13,014		11,211
Long-term debt	1,013		1,193
Other liabilities	6,141		1,539
Total liabilities	156,925		176,174
Total stockholders’ equity	662,225		714,615
Total liabilities and stockholders’ equity	$	819,150	$	890,789

Veeco Instruments Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Data

(in thousands, except per share amounts)

(unaudited)

				Non-GAAP Adjustments
Three months ended June 30, 2016	GAAP			Share-based Compensation		Amortization	Other		Non-GAAP
Net sales	$	75,348							$	75,348
Gross profit	31,439			486					31,925
Gross margin	41.7		%						42.4		%
Selling, general, and administrative and Other	20,154			(2,576	)		(62	)	17,516
Research and development	21,543			(940	)				20,603
Net income (loss)	(32,082		)	4,002		5,273	15,222		(7,585		)
Income (loss) per common share:
Basic	$	(0.82	)						$	(0.19	)
Diluted	(0.82		)						(0.19		)
Weighted average number of shares:
Basic	38,965								38,965
Diluted	38,965								38,965

Veeco Instruments Inc. and Subsidiaries

Other Non-GAAP Adjustments

(in thousands)

(unaudited)

Three months ended June 30, 2016
Asset impairment	13,627
Restructuring	2,095
Acquisition related	62
Non-GAAP tax adjustment *	(562	)
Total Other	15,222

* - The ‘with or without’ method is utilized to determine the income tax effect of all non-GAAP adjustments.

These table includes 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: share-based compensation expense; charges relating to restructuring initiatives; non-cash asset impairments; certain other non-operating gains and losses; and acquisition-related items such as transaction costs, non-cash amortization of acquired intangible assets, and incremental transaction-related compensation.

These Non-GAAP financial measures may be different from Non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. By excluding these items, Non-GAAP financial measures are intended to facilitate meaningful comparisons to historical operating results, competitors’ operating results, and estimates made by securities analysts. Management is evaluated on key performance metrics including adjusted EBITDA, which is used to determine management incentive compensation as well as to forecast future periods. These Non-GAAP financial measures may be useful to investors in allowing for greater transparency of supplemental information used by management in its financial and operational decision-making. In addition, similar Non-GAAP financial measures have historically been reported to investors; the inclusion of comparable numbers provides consistency in financial reporting. Investors are encouraged to review the reconciliation of the Non-GAAP financial measures used in this news release to their most directly comparable GAAP financial measures.

Veeco Instruments Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Data

(in thousands, except per share amounts)

(unaudited)

				Non-GAAP Adjustments
Three months ended June 30, 2015	GAAP			Share-based Compensation		Amortization	Other		Non-GAAP
Net sales	$	131,410							$	131,410
Gross profit	49,069			713					49,782
Gross margin	37.3		%						37.9		%
Selling, general, and administrative and Other	24,314			(3,112	)		(188	)	21,014
Research and development	20,119			(1,096	)				19,023
Net income (loss)	(8,386		)	4,921		7,979	3,867		8,381
Income (loss) per common share:
Basic	$	(0.21	)						$	0.21
Diluted	(0.21		)						0.20
Weighted average number of shares:
Basic	39,693								40,790
Diluted	39,693								40,960

Veeco Instruments Inc. and Subsidiaries

Other Non-GAAP Adjustments

(in thousands)

(unaudited)

Three months ended June 30, 2015
Restructuring	683
Acquisition related	188
Non-GAAP tax adjustment *	2,996
Total Other	3,867

* - The ‘with or without’ method is utilized to determine the income tax effect of all non-GAAP adjustments.

These table includes 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: share-based compensation expense; charges relating to restructuring initiatives; non-cash asset impairments; certain other non-operating gains and losses; and acquisition-related items such as transaction costs, non-cash amortization of acquired intangible assets, and incremental transaction-related compensation.

These Non-GAAP financial measures may be different from Non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. By excluding these items, Non-GAAP financial measures are intended to facilitate meaningful comparisons to historical operating results, competitors’ operating results, and estimates made by securities analysts. Management is evaluated on key performance metrics including adjusted EBITDA, which is used to determine management incentive compensation as well as to forecast future periods. These Non-GAAP financial measures may be useful to investors in allowing for greater transparency of supplemental information used by management in its financial and operational decision-making. In addition, similar Non-GAAP financial measures have historically been reported to investors; the inclusion of comparable numbers provides consistency in financial reporting. Investors are encouraged to review the reconciliation of the Non-GAAP financial measures used in this news release to their most directly comparable GAAP financial measures.

Veeco Instruments Inc. and Subsidiaries

Reconciliation of GAAP Net Income (loss) to Adjusted EBITDA

(in thousands)

(unaudited)

	Three months ended			Three months ended
	June 30, 2016			June 30, 2015
GAAP Net income (loss)	$	(32,082	)	$	(8,386	)
Share-based compensation	4,002			4,921
Amortization	5,273			7,979
Asset impairment	13,627			—
Restructuring	2,095			683
Acquisition related	62			188
Interest (income) expense	(185		)	(119		)
Depreciation	3,424			3,022
Income tax expense (benefit)	1,014			4,479
Adjusted EBITDA	$	(2,770	)	$	12,767

This table includes 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: share-based compensation expense; charges relating to restructuring initiatives; non-cash asset impairments; certain other non-operating gains and losses; and acquisition-related items such as transaction costs, non-cash amortization of acquired intangible assets, and incremental transaction-related compensation.

These Non-GAAP financial measures may be different from Non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. By excluding these items, Non-GAAP financial measures are intended to facilitate meaningful comparisons to historical operating results, competitors’ operating results, and estimates made by securities analysts. Management is evaluated on key performance metrics including adjusted EBITDA, which is used to determine management incentive compensation as well as to forecast future periods. These Non-GAAP financial measures may be useful to investors in allowing for greater transparency of supplemental information used by management in its financial and operational decision-making. In addition, similar Non-GAAP financial measures have historically been reported to investors; the inclusion of comparable numbers provides consistency in financial reporting. Investors are encouraged to review the reconciliation of the Non-GAAP financial measures used in this news release to their most directly comparable GAAP financial measures.

Veeco Instruments Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Data

(in millions, except per share amounts)

(unaudited)

							Non-GAAP Adjustments
Guidance for the three months ended September 30, 2016	GAAP						Share-based Compensation	Amortization	Other	Non-GAAP
Net sales	$	70	-	$	85					$	70	-	$	85
Gross profit	27		-	34			1	—	—	28		-	35
Gross margin	38%		-	40%						39%		-	41%
Net income (loss)	$	(24	) -	$	(18	)	5	6	3	(10		) -	(4		)
Income (loss) per diluted common share	$	(0.62	) -	$	(0.46	)				$	(0.26	) -	$	(0.10	)
Weighted average number of shares	39			39						39			39

Veeco Instruments Inc. and Subsidiaries

Reconciliation of GAAP Net Income (loss) to Adjusted EBITDA

(in millions)

(unaudited)

Guidance for the three months ended September 30, 2016
GAAP Net income (loss)	$	(24	)  -	$	(18	)
Share-based compensation	5		-	5
Amortization	6		-	6
Other *	3		-	3
Interest (income) expense	0		-	0
Depreciation	3		-	3
Income tax expense (benefit) **	1		-	1
Adjusted EBITDA	$	(6	)  -	$	—

Note: Amounts may not calculate precisely due to rounding.

* - Other includes expenses associated with the termination of a defined benefit plan and the restructuring plan.

** - The ‘with or without’ method is utilized to determine the income tax effect of all non-GAAP adjustments.

These table includes 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: share-based compensation expense; charges relating to restructuring initiatives; non-cash asset impairments; certain other non-operating gains and losses; and acquisition-related items such as transaction costs, non-cash amortization of acquired intangible assets, and incremental transaction-related compensation.

These Non-GAAP financial measures may be different from Non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. By excluding these items, Non-GAAP financial measures are intended to facilitate meaningful comparisons to historical operating results, competitors’ operating results, and estimates made by securities analysts. Management is evaluated on key performance metrics including adjusted EBITDA, which is used to determine management incentive compensation as well as to forecast future periods. These Non-GAAP financial measures may be useful to investors in allowing for greater transparency of supplemental information used by management in its financial and operational decision-making. In addition, similar Non-GAAP financial measures have historically been reported to investors; the inclusion of comparable numbers provides consistency in financial reporting. Investors are encouraged to review the reconciliation of the Non-GAAP financial measures used in this news release to their most directly comparable GAAP financial measures.

EX-99.2

Exhibit 99.2

Q2 2016 Conference Call Veeco Instruments Inc. August 1, 2016

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 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, 2015 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.

CEO Introduction John Peeler

Revenue of $75M Consistent with expectations for a soft LED industry environment in 1H 2016 Driving a return to profitability Executing restructuring plans, as committed Bookings increased slightly to $68M Supported by orders for Advanced Packaging Q2 2016 Performance Summary Gross margins exceeded expectations Expanded GAAP and non-GAAP gross margins by ~70 basis points

CFO Financial Review Sam Maheshwari

Focused on Return to Profitability Aligning operational structure to current business environment Lowering quarterly breakeven to $75M-$80M by Q4 2016 Foundation to deliver consistent adjusted EBITDA profitability Will continue to assess / align structure as needed Target lowering fixed costs by ~$20M on an annualized basis by Q1 2017 Reducing headcount Consolidating 3 manufacturing operations into 1 facility ~60% of savings from operating expenses (OPEX), ~40% of savings from cost of goods sold (COGS) Creates flexible, capable organization aligned with business needs Validate accuracy of modifying top graphic to “mid-70’s by Q1 17”

23% Advanced Packaging, MEMS & RF Revenue Breakdown by Market and Geography Note: Amounts may not calculate precisely due to rounding 33% Lighting, Display & Power Electronics 26% Scientific & Industrial 18% Data Storage Q2 2016 Revenue by End Market $75M 27% United States 33% China 20% EMEA 20% Rest of the World Q2 2016 Revenue by Geography Q2 2016 Revenue of $75M: Foundational businesses providing a stable revenue base Q2 2016 Bookings of $68M: Bookings increased by ~10% Q/Q Advanced Packaging, MEMS & RF doubled Q/Q, supported by multiple orders in Advanced Packaging 30% Advanced Packaging, MEMS & RF 22% Data Storage 19% Scientific & Industrial 29% Lighting, Display & Power Electronics Q1 2016 Revenue by End Market $78M $34M Foundational Businesses $32M Foundational Businesses

P&L Highlights ($M) Q1 16 Q2 16 Q1 16 Q2 16 Revenue $78.0 $75.3 $78.0 $75.3 Gross Profit 32.0 31.4 32.5 31.9 % 41.0% 41.7% 41.7% 42.4% R&D 22.1 21.5 21.0 20.6 SG&A & Other 19.8 20.2 17.0 17.5 Net Income (15.5) (32.1) (5.7) (7.6) % -19.9% -42.6% -7.3% -10.1% EPS ($0.40) ($0.82) ($0.15) ($0.19) Adjusted EBITDA (2.1) (2.8) % -2.7% -3.7% GAAP Non-GAAP Gross margins expanded by 70 basis points Q2/Q1, exceeding expectations for second consecutive quarter GAAP Net Income reflects impacts of cost reduction plans and includes ~$2M in restructuring and ~$14M in asset impairment charges Notes: Amounts may not calculate precisely due to rounding A reconciliation of GAAP to Non-GAAP financial measures is contained in the Back Up & Reconciliation Tables

($M) Q1 16 Q2 16 Cash & Short-term Investments 349 331 Accounts Receivable 56 42 Inventories 77 91 Accounts Payable 31 35 Cash Flow from Operations (19) (12) Financial Highlights DSO 65 50 DOI 157 189 DPO 61 72 Note: Amounts may not calculate precisely due to rounding

Q3 2016 Guidance Net Sales $70M–$85M $70M–$85M Gross Margins 38%–40% 39%–41% Net income (Loss) ($24M)–($18M) ($10M)–($4M) EPS ($0.62)–($0.46) ($0.26)–($0.10) Adjusted EBITDA ($6M)–$0M Non-GAAP GAAP Notes: A reconciliation of GAAP to Non-GAAP financial measures is contained in the Back Up & Reconciliation Tables

Business Update & Outlook

LED Industry Conditions are Improving Environment for LED manufacturers is stabilizing LED demand drivers supporting unit growth LED SUPPLY LED DEMAND MOCVD MARKET TV unit shipments forecast to improve in 2017, following declines in 2015/2016 LED lighting adoption continues to progress at a measured pace Bulb ASP’s declining at a slower pace; supports financial stability Modest improvement in MOCVD utilization rates Suggests supply / demand moving directionally toward equilibrium Note: based on IHS and Veeco estimates Multiple LED manufacturers planning to invest in MOCVD capacity over the next 12-months Near-term improvement in MOCVD demand

Veeco MOCVD – The Right Technology Platform for Growth Solid State Lighting, LED Display & Automotive Continue to win in GaN LED with market leading EPIK platform Maintaining competitive advantage through multi-generation roadmap, already developed ROY LED & Photonics Gaining traction in As/P applications with K475i Leveraging high performance platform to expand wins in LED and capture opportunities in growing photonics market (optical/fiber laser, sensors) Advanced Power Electronics Single-wafer platform enabling the development of commercially viable GaN power devices Focused on helping customers transition from R&D to volume production (late 2017 timeframe) EPIK 700 K475i Propel Power GaN NOTES: GaN – Gallium Nitride ROY – Red / Orange / Yellow AsP – Arsenic Phosphide

Veeco PSP – Versatility Generating Multiple Growth Levers Expand Served Markets Extend Global Reach Capture New Applications Market leader for single-wafer solvent clean with unique ImmJET™ technology Leveraging process advantages and existing infrastructure to expand into under-represented regions in Asia Established positions in core markets: MEMS, RF and Compound Semi (i.e. LED, power electronics, IR sensors) Demonstrating our unique technology + process advantage to expand in Advanced Packaging (2.5D and 3D) Single-wafer technology and process flexibility make PSP ideal for the most complex applications (result in precise process control) Device trends towards higher densities and tighter dimensions require precise process control (new opportunities) Compound Semi MEMS & RF Advanced Packaging MLO Strip Wafer thin Wet etch TSV reveal

Expanding our footprint Investing in adjacent market opportunities to diversify revenues Advanced Power Electronics Advanced Packaging Focusing on our Strategic Objectives Maintaining operational focus Right sizing the business to improve profitability through the cycles Lowering fixed costs by ~$20M on an annualized basis by Q1 2017 Strengthening our core Building on our foundational business to capture opportunities in core markets Data Storage, Scientific & Industrial Lighting & Display MEMS & RF

Q&A

Back Up & 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: share-based compensation expense; charges relating to restructuring initiatives; non-cash asset impairments; certain other non-operating gains and losses; and acquisition-related items such as transaction costs, non-cash amortization of acquired intangible assets, and incremental transaction-related compensation. These Non-GAAP financial measures may be different from Non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. By excluding these items, Non-GAAP financial measures are intended to facilitate meaningful comparisons to historical operating results, competitors' operating results, and estimates made by securities analysts. Management is evaluated on key performance metrics including adjusted EBITDA, which is used to determine management incentive compensation as well as to forecast future periods. These Non-GAAP financial measures may be useful to investors in allowing for greater transparency of supplemental information used by management in its financial and operational decision-making. In addition, similar Non-GAAP financial measures have historically been reported to investors; the inclusion of comparable numbers provides consistency in financial reporting. Investors are encouraged to review the reconciliation of the Non-GAAP financial measures used in this news release to their most directly comparable GAAP financial measures.

Supplemental Information—GAAP to Non-GAAP Reconciliation US$ millions Q1 16 Q2 16 Net Sales $78.0 $75.3 GAAP Gross Profit 32.0 31.4 GAAP Gross Margin 41.0% 41.7% Add: Share Based Comp 0.5 0.5 Add: Acquisition Related — — Non-GAAP Gross Profit $32.5 $31.9 Non-GAAP Gross Margin 41.7% 42.4% US$ millions Q1 16 Q2 16 GAAP Net Income (Loss) ($15.5) ($32.1) Add: Share Based Comp 4.3 4.0 Add: Acquisition Related 0.1 0.1 Add: Restructuring 0.1 2.1 Add: Amortization 5.3 5.3 Add: Asset Impairment — 13.6 Add: Interest (Income) Expense 0.3 (0.2) Add: Depreciation 3.3 3.4 Add: Taxes 0.0 1.0 Adjusted EBITDA ($2.1) ($2.8) US$ millions, except per share data Q1 16 Q2 16 GAAP Basic EPS ($0.40) (0.82) GAAP Diluted EPS ($0.40) (0.82) GAAP Net Income (Loss) ($15.5) (32.1) Add: Share Based Comp 4.3 4.0 Add: Acquisition Related 0.1 0.1 Add: Restructuring 0.1 2.1 Add: Amortization 5.3 5.3 Add: Asset Impairment — 13.6 Add: Tax Adjustment from GAAP to Non-GAAP 0.0 (0.6) Non-GAAP Net Income (Loss) ($5.7) (7.6) Non-GAAP Basic EPS ($0.15) (0.19) Non-GAAP Diluted EPS ($0.15) (0.19) Note: Amounts may not calculate precisely due to rounding

Q2 2016 GAAP to Non-GAAP Reconciliation Non-GAAP Adjustments In millions, except per share data GAAP Share-Based Compensation Amortization Other Non-GAAP Net Sales $75.3 $75.3 Gross Profit 31.4 0.5 31.9 Gross Margin 41.7% 42.4% Research and development 21.5 (0.9) 20.6 Selling, general, and administrative and Other 20.2 (2.6) (0.1) 17.5 Net Income (Loss) ($32.1) 4.0 5.3 15.2 ($7.6) Income (loss) per common share: Basic ($0.82) ($0.19) Diluted (0.82) (0.19) Weighted average number of shares: Basic 39 39 Diluted 39 39 Other Non-GAAP Adjustments Asset Impairment 13.6 Restructuring 2.1 Acquisition related 0.1 Non-GAAP tax adjustment (0.6) Total Other 15.2 Note: Amounts may not calculate precisely due to rounding

Q3 2016 Guidance GAAP to Non-GAAP Reconciliation Non-GAAP Adjustments In millions, except per share data GAAP Share-Based Compensation Amortization Other Non-GAAP Net Sales $70–$85 $70–$85 Gross Profit 27–34 1 — — 28–35 Gross Margin 38%–40% 39%–41% Net Income (Loss) ($24)–($18) 5 6 3 ($10)–($4) Income (Loss) per Diluted Share ($0.62)–($0.46) ($0.26)–($0.10) GAAP Net Income (loss) ($24)–($18) Share Based Compensation 5 Amortization 6 Other 3 Income tax expense (benefit) 1 Interest income, net (0) Depreciation 3 Adjusted EBITDA ($6)–($0) Note: Amounts may not calculate precisely due to rounding Non-GAAP Adjustments