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):  May 3, 2018

VEECO INSTRUMENTS INC.

(Exact name of registrant as specified in its charter)

Delaware	0-16244	11-2989601
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 2.02  Results of Operations and Financial Condition.

On May 7, 2018, Veeco Instruments Inc. issued a press release announcing its financial results for the quarter ended March 31, 2018.  In connection with the release and the related conference call, Veeco posted a presentation relating to its first quarter 2018 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 5.07  Submission of Matters to a Vote of Security Holders.

On May 3, 2018, Veeco held its 2018 Annual Meeting.  The matters voted on at the meeting are described in detail in the Company’s proxy statement for the meeting, which was filed with the SEC on March 19, 2018.

As of the record date for the meeting, there were 48,125,907 shares of common stock outstanding, each of which was entitled to one vote with respect to each of the matters voted on at the meeting.  Each of the directors up for election was elected and each of the other matters was approved by the required number of votes on each such matter.  The terms of each of the following directors continued after the meeting:  Kathleen A. Bayless, Gordon Hunter, John R. Peeler, Peter J. Simone and Thomas St. Dennis.

The final voting results were:

Matter	For	Withheld	Broker Non- votes
1.Election of Directors
(a)Richard A. D’Amore	39,064,432	1,026,970	3,074,908
(b)Keith D. Jackson	39,322,795	768,607	3,074,908

Matter	For	Against	Abstained	Broker Non-votes
2.Approval of the advisory vote on executive compensation	33,077,477	6,400,399	613,526	3,074,908
3.Ratification of the appointment of KPMG LLP	42,917,414	104,598	144,298	0

Item 9.01   Financial Statements and Exhibits.

(d)Exhibits.

Exhibit	Description
99.1	Press release issued by Veeco dated May 7, 2018
99.2	Veeco Q1 2018 Conference Call, May 7, 2018

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.

2

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.

May 7, 2018	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 May 7, 2018
99.2	Veeco Q1 2018 Conference Call, May 7, 2018

3

EX-99.1

Exhibit 99.1

	NEWS

VEECO REPORTS FIRST QUARTER 2018 FINANCIAL RESULTS

First Quarter 2018 Highlights:

·      Revenues of $158.6 million, compared with $94.5 million in the same period last year

·      GAAP net loss of $15.8 million, or $0.34 loss per share

·      Non-GAAP net income of $9.2 million, or $0.20 per diluted share

Plainview, N.Y., May 7, 2018 — Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its first quarter ended March 31, 2018.  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	Q1 ‘18			Q1 ‘17
Revenue	$	158.6		$	94.5
Net income (loss)	$	(15.8	)	$	1.6
Diluted earnings (loss) per share	$	(0.34	)	$	0.04

Non-GAAP Results	Q1 ‘18		Q1 ‘17
Net income (loss)	$	9.2	$	4.2
Operating income (loss)	$	11.3	$	4.8
Diluted earnings (loss) per share	$	0.20	$	0.11

“2018 is off to a great start with strong sequential and year-over-year revenue growth.  Our Non-GAAP gross margin, operating income, net income and EPS all exceeded our guided ranges,” commented John R. Peeler, Chairman and Chief Executive Officer.  “Sales growth in the first quarter was driven primarily by shipments of our lithography systems into the advanced packaging market, and shipments of MOCVD systems for LED applications.

“As we work towards our goal of being a more diversified company, we are pleased to see orders grow in the Front-End Semi and Advanced Packaging, MEMS & RF Filter markets,” continued Mr. Peeler.  “Our Ultratech integration is also proceeding well and we remain encouraged with Veeco’s growth prospects ahead.”

Guidance and Outlook

The following guidance is provided for Veeco’s second quarter 2018:

·      Revenue is expected in the range of $145 million to $170 million

·      Non-GAAP operating income is expected in the range of $2 million to $11 million

·      GAAP earnings (loss) per share are expected in the range of ($0.45) to ($0.26)

·      Non-GAAP earnings (loss) per share are expected in the range of $0.01 to $0.20

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, May 7, 2018, starting at 5:00pm ET. To join the call, dial 1-800-281-7973 (toll free) or 1-323-794-2093 and use passcode 1840311. Participants may also access a live webcast of the call by visiting the investor relations section of Veeco’s 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.

New Accounting Standard

The Company adopted the new accounting standard, ASC 606, related to revenue recognition, effective January 1, 2018. The prior periods presented here have been recast to reflect the adoption of this new standard.

About Veeco

Veeco (NASDAQ: VECO) is a leading manufacturer of innovative semiconductor process equipment. Our proven MOCVD, lithography, laser annealing, ion beam and single wafer etch & clean technologies play an integral role in producing LEDs for solid-state lighting and displays, and in the fabrication of advanced semiconductor devices. With equipment designed to maximize performance, yield and cost of ownership, Veeco holds technology leadership positions in all these served markets. To learn more about Veeco’s innovative equipment and services, visit www.veeco.com.

Forward-looking Statements

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, 2017 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:
Anthony Bencivenga 516-677-0200 x1308	David Pinto 408-325-6157
abencivenga@veeco.com	dpinto@veeco.com

2

Veeco Instruments Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

	Three months ended March 31,
	2018			2017
Net sales	$	158,574		$	94,499
Cost of sales	101,894			59,999
Gross profit	56,680			34,500
Operating expenses, net:
Research and development	24,320			14,989
Selling, general, and administrative	26,383			19,105
Amortization of intangible assets	13,532			2,867
Restructuring	2,695			1,338
Acquisition costs	1,342			1,361
Asset impairment	—			463
Other, net	(157		)	(78		)
Total operating expenses, net	68,115			40,045
Operating income (loss)	(11,435		)	(5,545		)
Interest income (expense), net	(4,622		)	(3,342		)
Income (loss) before income taxes	(16,057		)	(8,887		)
Income tax expense (benefit)	(230		)	(10,527		)
Net income (loss)	$	(15,827	)	$	1,640
Income (loss) per common share:
Basic	$	(0.34	)	$	0.04
Diluted	$	(0.34	)	$	0.04
Weighted average number of shares:
Basic	46,963			39,619
Diluted	46,963			40,140

3

Veeco Instruments Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

	March 31,		December 31,
	2018		2017
Assets
Current assets:
Cash and cash equivalents	$	245,525	$	279,736
Restricted cash	841		847
Short-term investments	65,130		47,780
Accounts receivable, net	108,219		98,866
Contract assets	1,984		160
Inventories	130,964		120,266
Deferred cost of sales	1,080		15,994
Prepaid expenses and other current assets	29,615		33,437
Total current assets	583,358		597,086
Property, plant and equipment, net	83,100		85,058
Intangible assets, net	356,311		369,843
Goodwill	307,131		307,131
Deferred income taxes	3,281		3,047
Other assets	28,847		25,310
Total assets	$	1,362,028	$	1,387,475
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	58,273	$	50,318
Accrued expenses and other current liabilities	54,297		58,068
Customer deposits and deferred revenue	94,473		112,032
Income taxes payable	1,581		3,846
Total current liabilities	208,624		224,264
Deferred income taxes	36,794		36,845
Long-term debt	278,489		275,630
Other liabilities	10,164		10,643
Total liabilities	534,071		547,382
Total stockholders’ equity	827,957		840,093
Total liabilities and stockholders’ equity	$	1,362,028	$	1,387,475

4

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 March 31, 2018	GAAP			Share-Based Compensation		Amortization	Other		Non-GAAP
Net sales	$	158,574							$	158,574
Gross profit	56,680			554			611		57,845
Gross margin	35.7		%						36.5		%
Research and development	24,320			(954	)				23,366
Selling, general, and administrative and Other, net	26,226			(2,857	)		(188	)	23,181
Net income (loss)	(15,827		)	4,537		13,532	6,985		9,227
Income (loss) per common share:
Basic	$	(0.34	)						$	0.20
Diluted	(0.34		)						0.20
Weighted average number of shares:
Basic	46,963								47,022
Diluted	46,963								47,191

Veeco Instruments Inc. and Subsidiaries

Other Non-GAAP Adjustments

(in thousands)

(unaudited)

Three months ended March 31, 2018
Restructuring	2,523
Acquisition related	1,342
Release of inventory fair value step-up associated with the Ultratech purchase accounting	514
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting	293
Non-cash interest expense	2,859
Other	(8	)
Non-GAAP tax adjustment *	(538	)
Total Other	6,985

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

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, incremental transaction-related compensation, and certain integration costs.

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 Non-GAAP Operating Income (loss), 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.

5

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 March 31, 2017	GAAP			Share-based Compensation		Amortization	Other		Non-GAAP
Net sales	$	94,499							$	94,499
Gross profit	34,500			657			89		35,246
Gross margin	36.5		%						37.3		%
Research and development	14,989			(429	)				14,560
Selling, general, and administrative and Other, net	19,027			(3,100	)		(1,361	)	14,566
Net income (loss)	1,640			4,186		2,867	(4,504	)	4,189
Income (loss) per common share:
Basic	$	0.04							$	0.11
Diluted	0.04								0.10
Weighted average number of shares:
Basic	39,619								39,619
Diluted	40,140								40,140

Veeco Instruments Inc. and Subsidiaries

Other Non-GAAP Adjustments

(in thousands)

(unaudited)

Three months ended March 31, 2017
Restructuring	1,338
Acquisition related	1,361
Asset impairment	463
Accelerated depreciation	89
Non-cash interest expense	2,185
Non-GAAP tax adjustment *	(9,940	)
Total Other	(4,504	)

* - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments. Also included in the Non-GAAP tax adjustment is the exclusion of a $4.9 million tax benefit associated with the Convertible Senior Notes, as well as a $4.9 million tax benefit associated with the reversal of a reserve for an uncertain tax position.

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, incremental transaction-related compensation, and certain integration costs.

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 Non-GAAP Operating Income (loss), 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.

6

Veeco Instruments Inc. and Subsidiaries

Reconciliation of GAAP Net Income (loss) to Non-GAAP Operating Income (loss)

(in thousands)

(unaudited)

	Three months ended			Three months ended
	March 31, 2018			March 31, 2017
GAAP Net income (loss)	$	(15,827	)	$	1,640
Share-based compensation	4,537			4,186
Amortization	13,532			2,867
Restructuring	2,523			1,338
Acquisition related	1,342			1,361
Release of inventory fair value step-up associated with the Ultratech purchase accounting	514			—
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting	293			—
Asset impairment	—			463
Accelerated depreciation	—			89
Interest (income) expense	4,622			3,342
Other	(8		)	—
Income tax expense (benefit)	(230		)	(10,527		)
Non-GAAP Operating Income (loss)	$	11,298		$	4,759

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, incremental transaction-related compensation, and certain integration costs.

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 Non-GAAP Operating Income (loss), 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.

7

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 ending June 30, 2018	GAAP					Share-based Compensation	Amortization	Other	Non-GAAP
Net sales	$	145	-	$	170				$	145	-	$	170
Gross profit	47		-	58		1	—	—	48		-	59
Gross margin	33%		-	35%					33%		-	35%
Net income (loss)	$	(21)	-	$	(12)	4	14	4	$	1	-	$	10
Income (loss) per diluted common share	$	(0.45)	-	$	(0.26)				$	0.01	-	$	0.20
Weighted average number of shares	47			47					47			47

Veeco Instruments Inc. and Subsidiaries

Reconciliation of GAAP Net Income (loss) to Non-GAAP Operating Income (Loss)

(in millions)

(unaudited)

Guidance for the three months ending June 30, 2018
GAAP Net income (loss)	$	(21	)	-	$	(12	)
Share-based compensation	4			-	4
Amortization	14			-	14
Restructuring	1			-	1
Acquisition related	1			-	1
Interest expense, net	5			-	5
Income tax expense (benefit)	(2		)	-	(2		)
Non-GAAP Operating Income	$	2		-	$	11

Note: Amounts may not calculate precisely due to rounding.

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, incremental transaction-related compensation, and certain integration costs.

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 Non-GAAP Operating Income (loss), 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.

8

EX-99.2

Exhibit 99.2

Q1 2018 Conference Call Veeco Instruments Inc. May 7, 2018

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, 2017 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

20¢ Non-GAAP EPS $159M Revenue Q1 2018 Highlights Profit better than consensus and exceeded guided range Maintained solid backlog of $331M Strong revenue growth Ultratech integration – On Track $155M Bookings Q1 Results Note: A reconciliation of GAAP to Non-GAAP financial measures may be found in Back-up & Reconciliation Tables $11M Non-GAAP Op Income 2018 is off to a great start

CFO Financial Review Sam Maheshwari

Q1 2018 Revenue by End Market and Geography Strong shipments to China Revenue concentration in LED Lighting, Display & Compound Semi reflects strong 2018 opening MOCVD backlog Mix by End Market Mix by Geography 17% Advanced Packaging, MEMS & RF Filters 20% Scientific & Industrial 57% LED Lighting, Display & Compound Semi $159M 28% Rest of World 47% China 10% EMEA 15% United States 6% Front-End Semi ROW includes Photonics, RF Device and Advanced Packaging revenue in Taiwan, Korea and Japan Note: Amounts may not calculate precisely due to rounding

Non-GAAP GAAP P&L Highlights Note: Amounts may not calculate precisely due to rounding. Prior period results have been recast to reflect the retrospective adoption of ASC 606. A reconciliation of GAAP to Non-GAAP financial measures is contained in the Back Up & Reconciliation Tables $ millions (except per share amounts) Q4 17 Q1 18 Q4 17 Q1 18 Revenue $139.7 $158.6 $139.7 $158.6 Gross Profit 55.4 56.7 56.5 57.8 Gross Margin 39.6% 35.7% 40.5% 36.5% R&D 24.3 24.3 23.3 23.4 SG&A & Other 28.5 26.2 25.6 23.2 Operating Income/(Loss) (15.0) (11.4) 7.5 11.3 Net Income/(Loss) (8.5) (15.8) 6.2 9.2 Earnings/(Loss) Per Share ($0.18) ($0.34) $0.13 $0.20 Solid revenue growth Sequential gross margin decline due to product mix. Expect improvement in 2nd half.

DSO (days) 62 61 DOI 130 118 DPO 54 52 $ millions Q4 17 Q1 18 Cash & Short-Term Investments 328 311 Accounts Receivable 99 108 Inventories 120 131 Accounts Payable 50 58 Long-Term Debt 276 278 Cash Flow from Operations 19 (12) Balance Sheet Highlights Note: Amounts may not calculate precisely due to rounding Working capital investment as we prepare for higher volume in Q2

Q2 2018 Guidance Revenue $145M–$170M $145M–$170M Gross Margin 33%–35% 33%–35% Net Income (Loss) ($21M)–($12M) $1M–$10M Earnings Per Share ($0.45)–($0.26) $0.01–$0.20 Non-GAAP Operating Income $2M–$11M Non-GAAP GAAP Note: A reconciliation of GAAP to Non-GAAP financial measures is contained in the Back Up & Reconciliation Tables

Business Update & Outlook

Advanced Packaging, MEMS & RF Filters Reflects new customers or application penetrations 2016 FOWLP – Fan Out Wafer Level Packaging ADAS – Advanced Driver Assisted Systems GPU – Graphical Processing Unit Applicable Technologies: MOCVD Lithography Wet Etch/Clean Laser Anneal Ion Beam MBE 3D Inspection ALD Ample Growth Drivers Big data analytics Autonomous vehicles (ADAS) 5G RF Cryptocurrency mining (GPUs) Capacity is Being Added Etching for MEMS applications Lithography – FOWLP & Cu Pillar

Recent Wins in Photonics and Power Photonics market: 25% CAGR to $1.5B by 2022 EXALOS – Superluminescent LEDs for medical imaging, optical sensing and other applications Power market: 80% CAGR to $500M by 2022 ON Semiconductor – High voltage power management for automotive and other applications LED Lighting, Display & Compound Semi VCSEL – Vertical Cavity Surface-Emitting Laser Applicable Technologies: MOCVD Lithography Wet Etch/Clean Laser Anneal Ion Beam MBE 3D Inspection ALD Continue to Win Business in China Booked additional EPIK® 868 business R&D Focused on Growth Markets Photonics (VCSEL) GaN power devices

Front-End Semi 3D Wafer Inspection Repeat order for multiple SuperfastTM systems for 3D NAND application Continuing high level of interest and engagement across customers STT-MRAM Partnership with leading semiconductor capital equipment manufacturer DTOR at leading memory manufacturer Applicable Technologies: MOCVD Lithography Wet Etch/Clean Laser Anneal Ion Beam MBE 3D Inspection ALD STT-MRAM – Spin-Transfer Torque Magnetic Random Access Memory DTOR – Development Tool of Record

Scientific & Industrial Applicable Technologies: MOCVD Lithography Wet Etch/Clean Laser Anneal Ion Beam MBE 3D Inspection ALD Continued Momentum in Optical Coatings Robust Q1 bookings Broad-based market demand including industrial lasers, medical imaging & material processing Compound Semiconductor Innovation Award GENxcelTM R&D MBE system Enabling leading edge research in compound semiconductor/photonics

2018 Priorities Update On track to achieve our 2018 priorities Ultratech Integration ERP Go-Live New Product Innovation Underway in MOCVD, Lithography, Wet Etch, Optical, EUV Delivering Growth – Diversifying Company Significant revenue growth and solid bookings Operating Leverage Solid Q1 results

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, incremental transaction-related compensation, and certain integration costs. 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 Non-GAAP Operating Income, 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 Note: Amounts may not calculate precisely due to rounding. Prior period results have been recast to reflect the retrospective adoption of ASC 606. In millions Q4 17 Q1 18 Net Sales $139.7 $158.6 GAAP Gross Profit 55.4 56.7 GAAP Gross Margin 39.6% 35.7% Add: Release of inventory fair value step-up for purchase accounting 0.4 0.5 Add: Share-Based Comp 0.6 0.6 Add: Accelerated Depreciation 0.1 0.1 Non-GAAP Gross Profit $56.5 $57.8 Non-GAAP Gross Margin 40.5% 36.5% In millions (except per share amounts) Q4 17 Q1 18 GAAP Basic EPS (0.18) (0.34) GAAP Diluted EPS (0.18) (0.34) GAAP Net Income (Loss) (8.5) (15.8) Add: Share-Based Comp 4.4 4.5 Add: Amortization 13.8 13.5 Add: Restructuring 2.1 2.5 Add: Acquisition Related 1.5 1.3 Add: Release of inventory fair value step-up for purchase accounting 0.4 0.5 Add: Depreciation of PP&E fair value step-up for purchase accounting 0.3 0.3 Add: Non-Cash Interest Expense 2.8 2.9 Add: Tax Adjustment from GAAP to Non-GAAP (10.6) (0.5) Non-GAAP Net Income (Loss) 6.2 9.2 Non-GAAP Basic EPS 0.13 0.20 Non-GAAP Diluted EPS 0.13 0.20 In millions Q4 17 Q1 18 GAAP Net Income (Loss) $(8.5) $(15.8) Add: Share-Based Comp 4.4 4.5 Add: Amortization 13.8 13.5 Add: Restructuring 2.1 2.5 Add: Acquisition Related 1.5 1.3 Add: Release of inventory fair value step-up for purchase accounting 0.4 0.5 Add: Depreciation of PP&E fair value step-up for purchase accounting 0.3 0.3 Add: Interest Expense 4.7 4.6 Subtract: Tax Benefit (11.3) (0.2) Non-GAAP Operating Income $7.5 $11.3

Q1 2018 GAAP to Non-GAAP Reconciliation Non-GAAP Adjustments In millions (except per share amounts) GAAP Share-Based Compensation Amortization Other Non-GAAP Net Sales $158.6 $158.6 Gross Profit 56.7 0.6 0.6 57.8 Gross Margin 35.7% 36.5% Research and Development 24.3 (1.0) 23.4 Selling, General, and Administrative and Other 26.2 (2.9) (0.2) 23.2 Net Income (Loss) $(15.8) 4.5 13.5 (7.0) $9.2 Income (Loss) Per Common Share: Basic $(0.34) $0.20 Diluted (0.34) 0.20 Weighted Average Number of Shares: Basic 47.0 47.0 Diluted 47.0 47.2 Other Non-GAAP Adjustments Restructuring 2.5 Acquisition Related 1.3 Release of inventory fair value step-up associated with the Ultratech purchase accounting 0.5 Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 0.3 Non-Cash Interest Expense 2.9 Non-GAAP Tax Adjustment (0.5) Total Other (7.0) Note: Amounts may not calculate precisely due to rounding

Q2 2018 Guidance GAAP to Non-GAAP Reconciliation Non-GAAP Adjustments In millions (except per share amounts) GAAP Share-Based Compensation Amortization Other Non-GAAP Net Sales $145–$170 $145–$170 Gross Profit 47–58 1 — — 48–59 Gross Margin 33%–35% 33%–35% Net Income (Loss) $(21)–$(12) 4 14 4 $1–$10 Income (Loss) per Diluted Share $(0.45)–$(0.26) $0.01–$0.20 GAAP Net Income (Loss) $(21)–$(12) Share-Based Compensation 4 Amortization 14 Restructuring 1 Acquisition Related Expense 1 Interest Expense 5 Income Tax Expense (Benefit) (2) Non-GAAP Operating Income $2–$11 Non-GAAP Adjustments Note: Amounts may not calculate precisely due to rounding

2017 Recast Historical Financials Under ASC 606 Note: Amounts may not calculate precisely due to rounding. Prior period results have been recast to reflect the retrospective adoption of ASC 606. Q1 2017 In millions (except per share amounts) As reported Adjustments As adjusted Net Sales $94.4 $0.1 $94.5 Cost of sales 60.2 (0.2) 60.0 Income tax expense (benefit) (10.3) (0.2) (10.5) Net Income (loss) 1.1 0.5 1.6 Diluted earnings (loss) per share $0.03 $0.01 $0.04 Q2 2017 In millions (except per share amounts) As reported Adjustments As adjusted Net Sales $115.1 $(2.8) $112.2 Cost of sales 76.3 - 76.4 Income tax expense (benefit) (12.9) (0.4) (13.3) Net Income (loss) (18.4) (2.4) (20.8) Diluted earnings (loss) per share $(0.43) $(0.06) $(0.49) Q3 2017 In millions (except per share amounts) As reported Adjustments As adjusted Net Sales $131.9 $(2.6) $129.3 Cost of sales 78.8 - 78.8 Income tax expense (benefit) (1.8) (0.7) (2.5) Net Income (loss) (21.9) (1.9) (23.7) Diluted earnings (loss) per share $(0.47) $(0.04) $(0.51) Q4 2017 In millions (except per share amounts) As reported Adjustments As adjusted Net Sales $143.4 $(3.8) $139.7 Cost of sales 85.1 (0.8) 84.3 Income tax expense (benefit) (11.1) (0.1) (11.3) Net Income (loss) (5.6) (2.9) (8.5) Diluted earnings (loss) per share $(0.12) $(0.06) $(0.18) Sales by Market In millions Q1 ‘17 Q2 ‘17 Q3 ‘17 Q4 ‘17 CY 2017 Advanced Packaging, MEMS & RF Filters $10.9 $21.8 $21.5 $13.2 $67.4 LED Lighting, Display & Compound Semi 55.2 54.3 57.6 81.5 248.6 Front-End Semiconductor 1.2 10.3 16.3 12.6 40.3 Scientific & Industrial 27.3 25.8 33.9 32.4 119.3 Total Sales $94.5 $112.2 $129.3 $139.7 $475.7