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):  April 27, 2006
 
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.)	
 	 	 	 	 	
100 Sunnyside Boulevard, Suite B, Woodbury, New York 11797
(Address of principal executive offices, including zip code)	
 
(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):
 
o                   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o                   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o                   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o                   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
Section 7 - Regulation FD
 
Item 7.01   Regulation FD Disclosure.
 
Veeco Instruments Inc. (“Veeco”) plans to attend certain investor meetings on April 27, 2006.  A copy of Veeco’s presentation for these meetings is furnished as Exhibit 99.1 to this report and will be available on Veeco’s website (www.veeco.com) prior to or simultaneously with the first of these meetings.
 
The information in this report, including the exhibit, 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 it 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.
 
Section 9 - Financial Statements and Exhibits
 
Item 9.01   Financial Statements and Exhibits.
 
(c)                                   Exhibits .

Exhibit	 	Description	
 	 	 	
99.1	 	Veeco’s Instruments Inc. - Investor Presentation dated April 2006.	
 
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.

 	VEECO INSTRUMENTS INC.	
 	 	
April 27, 2006	By:	/s/ Gregory A. Robbins	 	
 	 	Gregory A. Robbins	
 	 	Senior Vice President and General Counsel	
 
3

 
EXHIBIT INDEX

Exhibit	 	Description	
 	 	 	
99.1	 	Veeco’s Instruments Inc. - Investor Presentation dated April 2006.	
 
4

Exhibit 99.1

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Exhibit 99.1 

[LOGO]	Solutions for a nanoscale world.	
 
[GRAPHIC]
 
Investor Presentation

April 2006
 
Veeco Instruments Inc.

 
VEECO PROVIDES ENABLING TECHNOLOGY IN PROCESS EQUIPMENT AND METROLOGY FOR MULTIPLE  GROWTH MARKETS

Data Storage	Semiconductor	HB-LED/Wireless	Scientific Research	
 	 	 	 	
[GRAPHIC]	[GRAPHIC]	[GRAPHIC]	[GRAPHIC]	
 	 	 	 	
Embedded Storage for CE	90 and 65nm	HB-LED / Wireless,	Nanotech, Material &	
Microdrives / Femto TFHS	300mm	Automotive, Camera Cell	Life Science	
Perpendicular recording	 	Phones, Backlit LCD TV	 	

040006 Braun Investor Presentation	 	[LOGO]	
 
2

 
MANAGEMENT HIGHLIGHTS 
 
•                   Solid Q106 results; $94M revenue in line…orders up; gross margins up, EBITA up significantly…above prior year and above guidance.
 
•                   2006 market conditions continue to strengthen…expect double digit growth in Data Storage and HB-LED / Wireless; single digit growth in Semiconductor and Scientific Research.
 
•                   Q1 Orders $127M reflect 55% growth in Data Storage to a record $70M… 74% growth in HB-LED / Wireless to $24M.
 
•                   Driven by the high growth of embedded hard drive storage in consumer electronics, investment in perpendicular recording, and the beginning of HB-LED / Wireless backlighting of flat panel LCD TV.
 
•                   Improved market conditions and new product introductions will allow Veeco Revenue growth to $450M in 2006; EBITA growth to ~$50M.
 
3

 
SOLID Q1 RESULTS Revenue in line…growth in Orders, Gross Margin and EBITA 

REVENUE	$94M …IN LINE WITH GUIDANCE…FLAT WITH Q105	
 	 	
ORDERS	$127M …	UP 28% FROM Q105	
 	 	(5 YEAR HIGH) …ABOVE GUIDANCE	
 	 	
EBITA	$5.7M ...UP 115% FROM Q105	
 	 	
EPS (NON GAAP)	$0.09 PER SHARE VS. $.01 IN Q105, ABOVE GUIDANCE	
 	 	
GROSS MARGIN	44.5% VS 40% Q105	
 	 	
CASH	$113.5M AFTER REPURCHASE OF CONVERT BONDS ($20M)	
 	 	
BOOK/BILL	1.35 TO 1	
 
4

 
VEECO’S STRATEGY FOR GROWTH 
 
•                   Develop a broad product line of enabling Process Equipment and Metrology technologies.
 
•                   Develop strategic relationships with technology leaders worldwide.
 
•                   Capture leading market share in all product lines.
 
•                   Leverage our exposure to end markets with high-growth potential.
 
•                   Fuel our growth through the development of new products tied to our customers new technology roadmap demands.
 
•                   Continually improve our operations to remain profitable through industry cycles.
 
WE BELIEVE THERE IS A MULTI-HUNDRED MILLION DOLLAR GROWTH OPPORTUNITY FOR VEECO EXISTING IN THE TECHNOLOGIES WE OWN TODAY
 
5

 
INNOVATIVE NEW CONSUMER ELECTRONICS PRODUCTS 

[GRAPHIC]	Consumer products named “Most Innovative” at January 2006 CES show. Demonstrates convergence of SEMI, data storage, HB-LED / Wireless technology.	[GRAPHIC]	
Samsung backlit LED TV		Pioneer Navigation System	
 		 	
[GRAPHIC]		[GRAPHIC]	
Samsung ZX20 Cell Phone		Zen Vision / I-Pod / MP-3	
 		 	
 	[GRAPHIC]	 	
 	Sony Handycam	 	
 
6

 
VEECO ENTERS A MULTI-YEAR, MULTI-MARKET GROWTH OPPORTUNITY 
 
2006 Opportunity for Growth in All Veeco Core Markets

 	 	 	 	2005 Veeco	 	2006 Veeco	 	
 	 	 	 	Revenue	 	Revenue Forecast	 	
Hard Disk Drive	 	Consumer Electronics technology   & capacity investments require new Veeco Equipment & Metrology	 	+35 %	 	+15 to 20%	 	
 	 	 	 	 	 	 	 	
HB-LED / Wireless	 	“Brightness Roadmap” for solid state lighting requires continued MOCVD technology advances	 	-36 %	 	+20 to 30%	 	
 	 	 	 	 	 	 	 	
Semiconductor	 	More 3D Metrology required as   dimensions shrink below 90nm	 	+27%	 	+8 to 10%	 	
 	 	 	 	 	 	 	 	
Scientific Research	 	Nanoscale Research requires atomic instrumentation	 	-2%	 	+6 to 8%	 	
 	 	 	 	 	 	 	 	
 	 	 	 	$410.2M	 	~$450M	 	
 	 	 	 	+5%	 	+10%	 	
 
7

 
BROAD PRODUCT LINE OF PROCESS EQUIPMENT AND METROLOGY TECHNOLOGIES 
 
WHAT WE DO
 
PROCESS EQUIPMENT
 
[GRAPHIC]
 
ADD MATERIAL
(DEPOSITION)
 
[GRAPHIC]
 
REMOVE MATERIAL
 
METROLOGY
 
[GRAPHIC]
 
IMAGE, MEASURE & MONITOR
 
‘06 NEW PRODUCTS at HIGHER GROSS MARGINS

•	Ion Beam Deposition (IBD)		
•	Physical Vapor Deposition (PVD)		
•	Atomic Layer Deposition (ALD)		
•	Molecular Beam Epitaxy (MBE)	 	
 	Diamond-Like Coating (DLC)		
•	Metal Organic CVD (MOCVD)		
 	 	 	
•	Ion Beam Etch (IBE)		
•	Precision Lapping/Slicing		
 	 	 	
•	Atomic Force Microscopy (AFM)		
•	Scanning Probe Microscopy (SPM)		
•	Stylus & Optical Profilers		
 
NEW PRODUCT REVENUE TO EXCEED $175 MILLION
 
8

 
WE HAVE STRATEGIC RELATIONSHIPS WITH GLOBAL TECHNOLOGY LEADERS AND STRONG MARKET  SHARE

Strong Market Share	Serving Global Industry Leaders	
 	 	
Data Storage	 	
 	 	
#1 TFMH	[LOGO]	
Equipment	 	

HB-LED / Wireless	 	
 	 	
A Leader in MOCVD	 	
and MBE	 	
 	 	
Semiconductor	 	
 	 	
#1 AFM,	 	
Leader Optical	 	
 	 	
Scientific Research	 	
 	 	
#1 Research AFM	 	
 
9

 
Q1 – TOP 15 CUSTOMERS (ORDERS) BY MARKET 
 
Large orders across all major Veeco markets

 	 	 	 	 	 	 	 	HB - LED &	 	Scientific	 	
 	 	 	 	Data Storage	 	Semiconductor	 	Wireless	 	Research	 	
 	 	 	 	 	 	 	 	 	 	 	 	
1.	 	Seagate	 	X	 	 	 	 	 	 	 	
2.	 	Hitachi Global Storage Tech	 	X	 	 	 	 	 	 	 	
3.	 	Western Digital	 	X	 	 	 	 	 	 	 	
4.	 	Headway/TDK/SAE	 	X	 	 	 	 	 	 	 	
5.	 	Huga Opto Tech	 	 	 	 	 	X	 	 	 	
6.	 	Epitech Technology	 	 	 	 	 	X	 	 	 	
7.	 	High Link Tech Corp	 	 	 	 	 	X	 	 	 	
8.	 	RF Micro Devices	 	 	 	 	 	X	 	 	 	
9.	 	ALPS	 	X	 	 	 	 	 	 	 	
10.	 	Sumika Electronic Materials	 	 	 	 	 	X	 	 	 	
11.	 	Svetlana Optoelectronics	 	 	 	 	 	X	 	 	 	
12.	 	ST Microelectronics	 	 	 	X	 	 	 	 	 	
13.	 	TECH Semiconductor	 	 	 	X	 	 	 	 	 	
14.	 	Micron Technology	 	 	 	X	 	 	 	 	 	
15.	 	STS Semiconductor	 	 	 	X	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
TOTAL TOP 15 BY MARKET	RECORD	5	 	4	 	6	 	 	 	
TOTAL $ ORDERS BY MARKET	LEVEL	$70M	 	$10M	 	$24M	 	$22M	 	
 
10

 
VEECO’s FINANCIAL MODEL 

 
VEECO HAS A DIVERSE REVENUE BASE . . . multi-product . . . multi-market . . . worldwide exposure 
 
Q106 Revenue $93.9M

[CHART]	[CHART]	[CHART]	
 	 	 	
Revenue by Product	Revenue by Market	Revenue by Geography	
(Equipment up 6%)	(Data Storage up 56%)	(APAC growth +24%)	
 
Veeco benefits from product, market and geographic diversity
 
12

 
VEECO HAS A DIVERSE REVENUE BASE . . . multi-product . . . multi-market . . . worldwide exposure 
 
Q106 Orders $127M (5 year high)

[CHART]	[CHART]	[CHART]	
 	 	 	
Orders by Product	Orders by Market	Orders by Geography	
(Equipment Orders Up 51%)	(Data Storage Orders Up 55%	(APAC Up 74%)	
 	HB-LED / Wireless Orders Up 74%)	 	
 	 	 	
Q1 Orders reflect strong Data Storage,	
HB-LED/Wireless markets and APAC growth	
 
13

 
VEECO’S 2006 GROWTH OPPORTUNITY… INCREASED REVENUES AND GROSS MARGINS 
 
[CHART]
 
Revenue and margin growth opportunities in both Equipment and Metrology…benefit of new products and outsourcing
 
14

 
Q1… 23% SEQUENTIAL ORDER GROWTH…INCREASES BACKLOG… QUARTERLY REVENUE TO TREND  UPWARD THROUGH 2006
 
Orders ($M) TRENDING UP
 
[CHART]
 
1 st HALF ORDERS ~$255M
 
Q1 Orders Up 23% Sequentially.
Up 28% Year Over Year.
 
Revenue ($M) TRENDING UP
 
[CHART]
 
2 nd HALF REVENUE ~$250M
=$450M YEAR
 
Q1 Backlog Up +$30M; Revenue to Trend Upward.
Expect Year Over Year Revenue Growth In Each Quarter.
 
15

 
2006…GROSS MARGINS and EBITA TREND UPWARD 
 
Gross Margin TRENDING UP
 
[CHART]
 
Expect Year Over Year
Margin Growth In Each Quarter.
 
EBITA ($M) TRENDING UP
 
[CHART]
 
Expect Year Over Year
EBITA Growth In Each Quarter of 2006.

*EBITA calculation =  earnings before interest, taxes and amortization…see reconciliation table
 
16

 
2006/07 CONTINUED GROWTH IN REVENUE, MARGINS & EBITA ($M) 
 
Revenue
 
[CHART]
 
2006 Revenue
Growth +10 to 15%.
 
Gross Margin
 
[CHART]
 
Gross Margin Improvement
+3% Points Per Year.
 
EBITA**
 
[CHART]
 
EBITA Nearly Doubles
Again For 2006/2007.

*In line with current Analyst consensus (target performance for 2007/8 timeframe)
**EBITA calculation =  earnings before interest, taxes and amortization…see reconciliation table
 
17

 
IMPROVE PROFITABILITY…COST REDUCTION… OPERATIONAL EXCELLENCE INITIATIVES 

In progress	Reduce system material content…use of centralized buying…partnering with Brooks Automation	
 	 	
2006	Simplify Veeco operational organization around a single Process Equipment and a single Metrology senior management structure with emphasis on:	
	 	
	• Centralized material purchasing/better supplier management	
	• Increased outsourcing content of new products	
	• Development of common hardware/software platforms	
	• Shorter manufacturing cycles …less inventory …improved reliability	
	 	
	Implement SAP across all Veeco divisions (end of ‘06) to eliminate layers of order entry / financial management	
	 	
	Operational excellence to include inventory reduction, capex reduction, DSO management and cash generation …best practices across all of Veeco	
 	 	
2007
Quarterly
Timeframe	Achieve Target Business Model	
	 	
	Sales	$	500	M	 	
	Gross Margin	50	%	 	
	Operating Expense	30	%	 	
	EBITA	20	%	 	
 
18

 
IMPROVED FINANCIAL PERFORMANCE IN PEAK AND TROUGH QUARTERS 

 	 	Trough Quarter	 	Peak Quarter	 	 	 	
 	 	 	 	 	 	Total	 	 	 	 	 	Total	 	2007	 	
 	 	Equipment	 	Metrology	 	Veeco	 	Equipment	 	Metrology	 	Veeco	 	Target	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Sales	 	100	%	100	%	100	%	100	%	100	%	100	%	100%	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross Margin	 	38	%	51	%	45	%	43	%	56	%	48	%	48 - 50%	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Op Exp	 	35	%	35	%	39	%	26	%	31	%	32	%	30%	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITA	 	3.5	%	16	%	6	%	17	%	25	%	16	%	18 - 20%	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenue	 	$	49	M	$	45	M	$	94	M	$	75	M	$	53	M	$	128	M	~$130 to
$140M /
Quarter	 	

Earn 5 to 6% in Trough quarters ($90 – $95M)	 	Earn 15 to 20% in Peak quarters ($125 – $135M)	 	
 
19

 
Q2 2006 GUIDANCE 
 
•                   Q2 revenues to be in the range of $105 - $110 million.
 
•                   Q2 orders to be in the range of $125 - $130 million.
 
•                   Q2 2006 GAAP in the range of $0.02 to $0.08 per share.
 
•                   Q2 2006 non-GAAP (excluding amortization) earnings per diluted share are expected to be between $0.12 and $0.16 using a 35% tax rate, including options expense.
 
20

 
Data Storage Opportunity 

 
VEECO PROCESS EQUIPMENT OVERVIEW 
 
Veeco Equipment’s Leadership Position in:

Ion Beam Etch/Deposition	Data Storage
TFMH	Areal Density, Perpendicular Transition and Capacity Growth (Consumer Electronics)	
Physical Vapor Deposition			
Atomic Layer Deposition			
Diamond Like Carbon			
Precision Lapping/Dicing			
 	 	 	
MOCVD	HB-LED / Wireless;
High - Frequency
Power Devices	Critical Backlighting, LCD/TV,
Cell Phones, PDAs, Automotive,
Specialty Lighting	
MBE			
Epitaxial Films			

PE Revenue	 	2004	 	GM	 	2005	 	GM	 	2006F	 	GM	 	
Ion Beam / Mechanical	 	$	134	M	 	 	$	163	M	 	 	$	175	M	 	 	
Epitaxial	 	$	93	M	 	 	$	65	M	 	 	$	80	M	 	 	
Process Equipment	 	$	227	M	30	%	$	228	M	35	%	$	255	M	40	%	
 
22

 
CONSUMER APPLICATIONS ENABLE EXPONENTIAL HARD DRIVE GROWTH… unit growth to double 
 
[CHART]
 
Source :  Hitachi GST Estimate
 
23

 
DATA STORAGE … hard disk drive unit growth >20% compound growth…consumer electronics segment will approach size of  computer market segment
 
[CHART]
 
24

 
HDD OPPORTUNITY: UNPRECEDENTED TECHNOLOGY AND FORM FACTOR CHANGES OCCURRING  SIMULTANEOUSLY
 
TFMH Technology Changes Drive Capital Equipment Growth
 
[CHART]
 
Areal density roadmap increases (30%) per year toward CPP (perpendicular recording) capable of 1 Terabit/in² (2008)…will require new manufacturing technology.
 
Microdrives
 
[GRAPHIC]
 
Slider Shrinks (FEMTO) and Wafer Size Increases (200mm)
 
[GRAPHIC]
 
Perpendicular Recording Development
 
[GRAPHIC]
 
25

 
DATA STORAGE MULTI-YEAR INVESTMENT IN NEW TECHNOLOGY & CAPACITY… PROVIDES VEECO WITH  CONTINUED GROWTH

Technology (units)	 	2004	 	2005	 	2006	 	2007	 	CAGR	 	
TFMH (M) Growth	 	885	 	1181	 	1385	 	1579	 	+22	%	
PMR Content	 	0	%	2.3	%	14	%	30	%	 	 	
Femto Content	 	0	%	3.1	%	31	%	80	%	 	 	
Larger Wafer 150mm/200mm	 	 	 	 	 	 	 	10	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
 	 	2003	 	2004	 	2005	 	2006F	 	 	 	CAGR	 	
Veeco Revenue	 	$	90M	 	$	123M	 	$	167M	 	$	220M	 	 	 	~35	%	

Market Conditions	 	 	 	•        Modest industry / areal density investment	 	•  Areal density growth 30% per year GMR
 
•        Flash emerges	 	•  TMR higher areal density growth
 
•        Consumer   electronics
 
•        Seagate / Maxtor	 	•        Perpendicular recording / Areal density growth
 
•        Femto sliders/200mm wafers
 
•  Continued CE and mobile growth	 	
 	 	 	 	 	 	 	 	 	 	 	 	
New Veeco Products	 	 	 	 	 	 	 	•  New Nexus
•  IBE / IBD / DLC
•  Optical Profiler	 	•  New Slider tools (saws / lapping)
•        New PVD / ALD deposition
•        Advanced Metrology Auto AFM

26

 
VEECO: A STRATEGIC PARTNER TO TFMH SUPPLIERS… IN EVERY STEP OF THE MANUFACTURING PROCESS 

[GRAPHIC]	[GRAPHIC]	[GRAPHIC]	
 	 	 	
WAFER PROCESSES	ROWBAR/SLIDER PROCESSES	HGS, FINAL ASSY AND TEST	
 
[GRAPHIC]
 
Veeco: a singular vision for data storage.
 
Veeco is the only company that provides a complete suite of process equipment and metrology solutions for every step of your process today.  And, we are the only company making the investment to extend the breadth of our technologies and precision of our solutions to be a strategic partner as you make the transition to smaller, higher-density drives in the future.
 
27

 
HB-LED / Wireless Opportunity 

 
HB-LED / WIRELESS OPPORTUNITY: “BRIGHTNESS” 
DEFINES NEXT GENERATION VEECO MOCVD
 
[CHART]
 
29

 
SOLID STATE LIGHTING GROWTH OPPORTUNITY 
Red, Green, Blue HB-LED / WIRELESS >20% CAGR
 
[CHART]
 
30

 
LED FORECAST…GaN HB-LED / WIRELESS MARKET CONTINUES TO GROW (22% CAGR ‘05 to ‘09) 
 
[CHART]
 
Source: Strategies Unlimited
 
31

 
HB-LED / WIRELESS OPPORTUNITY:  MULTI-YEAR EQUIPMENT GROWTH FROM INCREASED ADOPTION 

Mobile	Outdoor	LCD	Automotive	General	
Appliances	Signage	Backlighting	Lighting	Illumination	
 	 	 	 	 	
[GRAPHIC]	[GRAPHIC]	[GRAPHIC]	[GRAPHIC]	[GRAPHIC]	
 	 	 	 	 	
Cell phones	Large displays	Flat Panel TVs	Headlamps	Interior lighting	
PDAs	Traffic signals	Laptops	Dashboard	Industrial	
Flashlights	Storefront lighting	Retail Display	Heads up displays	Event lighting	
 	 	 	 	 	
57% growth in LEDs	Signage displays	Color rendering	60 million light vehicles	5% of LED market in	
for backlighting in	continue to become	significantly higher	produced per year;	2004, growing fast	
2004	larger and more	than CCFL (100%	only 40% use LEDs	 	
 	dynamic	NTSC)	 	Flexibility of light	
Expected growth for	 	 	Headlamps and DRL	quality and color drives	
white “flash” LED and	Beijing 2008 Olympics	Adopted for high-end	will be introduced as	novel applications	
other small displays	driving adoption in	TV units; will increase	brightness continues to	 	
 	China	penetration as price	increase	5-10 years before	
 	 	falls	 	major adoption into	
 	 	 	 	general lighting	
 	 	 	 	 	
 	 	2006-2007 GROWTH OPPORTUNITY	 	
 
32

 
MULTI-YEAR HB-LED / WIRELESS GROWTH DRIVEN BY “WHITE LED” PENETRATION OF LCD TV,  AUTOMOTIVE & ARCHITECTURAL LIGHTING

 	 	2005	 	2006	 	2007	 	2008	 	2009	 	CAGR	 	
LED Units	 	22B	 	28B	 	32B	 	42B	 	54B	 	+23%	 	
Flat Panel	 	 	 	 	 	 	 	 	 	 	 	 	 	
Backlit Units	 	208M	 	260M	 	296M	 	321M	 	350M	 	+20%	 	
LED - Backlit	 	 	 	 	 	 	 	 	 	 	 	 	 	
Penetration	 	0.2%	 	1.0%	 	3.5%	 	9.0%	 	13.0%	 	 	 	
Veeco CS Revenue	 	$65M	 	$88M +30 to 35%	 	$115M +30%	 	$150M 30%	 	$175M +15%	 	27%	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Market Applications	 	•  Mobile phones	 	•        Camera flash	 	•  Backlit LCD TV	 	•        Specialty interior lighting	 	 	 	
	 	•        Outdoor signs	 	•        Backlit laptops	 	•        Auto headlights	 	•  General illumination	 	 	 	
	 	•        Traffic lights	 	•  Auto lighting	 	•        Architectural lighting	 	 	 	 	 	 	 	
 
33

 
Veeco Metrology 

 
VEECO METROLOGY OVERVIEW 
 
Veeco’s Metrology Leadership Position in:

 	Nano-Bio Research	
Research and Automated	 	
Atomic Force Microscopy	Semiconductor (90/65nm CD Metrology)	
Optical Profilers	 	
 	Data Storage (Wafer/Slider Metrology)	

Metrology Revenues	 	2004	 	GM	 	2005	 	GM	 	2006F	 	GM	 	
Auto AFM	 	$	40	M	 	 	$	51	M	 	 	$	54	M	 	 	
Nano-Bio/Sci.Res	 	$	123	M	 	 	$	131	M	 	 	$	141	M	 	 	
Total	 	$	163	M	52	%	$	182	M	51	%	$	195	M	53	%	
 
35

 
NANOTECHNOLOGY “All the World’s Industry is in its Path” 

Life Science	 	 	 	Information Technology	
 	 	 	 	 	
[GRAPHIC]	 	 	 	[GRAPHIC]	
 	 	 	 	 	
Human Hair	 	 	 	MEMS	
70um wide	 	 	 	10um - 1mm	
 	 	 	 	 	
[GRAPHIC]	 	 	 	[GRAPHIC]	
 	 	 	 	 	
Red Blood Cells	 	 	 	Transistor	
3um	 	 	 	0.5um - 90nm	
 	 	 	 	 	
[GRAPHIC]	 	 	 	[GRAPHIC]	
 	 	 	 	 	
DNA Strand	 	 	 	Magnetic Bits (HDD)	
2nm wide	 	 	 	160nmx40nm (100Gb/in2)	
 	 	 	 	 	
[GRAPHIC]	 	 	 	[GRAPHIC]	
 	 	 	 	 	
Silicon Atom	 	[GRAPHIC]	 	Quantum Dots	
0.2nm dia	 	NANO RULER	 	20nm wide each	
 
AFMs Image, Measure and Manipulate  Nanoscale Structures
 
[GRAPHIC]
 
36

 
VEECO’S BROAD-BASED METROLOGY 
 
Nanotechnology
 
•                   Nano Metrology
•                   Nano Manipulation
•                   Nano Material
 
Materials Research
 
•                   Semiconductor
•                   Future Data Storage
•                   Polymers
 
Life Sciences
 
•                   Living Cells
•                   DNA
•                   Proteomics
 
We sell approximately 100 Scientific Research Tabletop AFMs per quarter… stable, high margin business with ‘06 Growth in “Nano-Bio”
 
Carbon Nanotube Transistor
 
[GRAPHIC]
 
Polymers
 
[GRAPHIC]
 
Cu Films
 
[GRAPHIC]
 
Magnetic Storage Media
 
[GRAPHIC]
 
DNA
 
[GRAPHIC]
 
Lipids
 
[GRAPHIC]
 
Protein Crystal Detection
 
[GRAPHIC]
 
37

 
BIO INSTRUMENTATION OPPORTUNITY 
 
AFM enables scientists in biology and life sciences to discover the structure, function, interactions of:
 
•                   Biological molecules (e.g., proteins, DNA…)
•                   Viruses
•                   Live cells
•                   Biomaterials
•                   …in real life conditions
 
Application areas include:
 
•                   Biomaterial development and characterization
 
•                   Implants, medical devices, cosmetics, artificial or engineered tissue
 
•                   Revealing disease mechanism and drug development
 
[GRAPHIC]
 
Works in Conjunction with Optical Microscopes
 
[GRAPHIC]
 
Tubular Micelles 1.72 micron image
 
38

 
KEY METROLOGY FOCUS: AFM APPLICATIONS ‘LAB-TO-FAB’ 
 
RESEARCH & SCIENTIFIC
 
[GRAPHIC]
 
INSTALLED BASE >7,000 SYSTEMS

Topography	Magnetics	Life Science	Nano ‘Pull / Position”	
 	 	 	 	
[GRAPHIC]	[GRAPHIC]	[GRAPHIC]	[GRAPHIC]	
 	 	 	 	
Atomic Scale Meas.	Polarization Meas.	Non-destructive	Nano-manipulation	
(Copper seed layer)	(BiFeO3 spheres)	(SARS virus)	& PicoForce	
 
PRODUCTION FAB
 
[GRAPHIC]
 
INSTALLED BASE >350 SYSTEMS; DATA STORAGE APPLICATIONS EMERGING

CMP	Etch	Litho Resist	Litho Masks	
 	 	 	 	
[GRAPHIC]	[GRAPHIC]	[GRAPHIC]	[GRAPHIC]	
 
39

 
SEMICONDUCTOR OPPORTUNITY: FOCUS ON CONTINUED DEVELOPMENT OF LEADING-EDGE TIP  TECHNOLOGY
 
[GRAPHIC]
 
Veeco tip development roadmap addresses leading edge 45nm and 25nm applications
 
[GRAPHIC]
 
JDP with Leti and Team NanoTech for advanced tip development
 
Next-gen tips required to meet industry roadmap and improve customers’ CoO
 
40

 
2005-2006 OPPORTUNITY TO STRENGTHEN BALANCE SHEET THROUGH CASH GENERATION ($M) 

($ IN MILLIONS)	 	March 31, 2006	 	December 31, 2005	 	
 	 	 	 	 	 	
Cash and Investments	 	$	113.5	 	$	124.5	 	
 	 	 	 	 	 	
Working Capital	 	216.5	 	229.7	 	
 	 	 	 	 	 	
Fixed Assets	 	69.8	 	69.8	 	
 	 	 	 	 	 	
Total Asset	 	547.0	 	567.9	 	
 	 	 	 	 	 	
Long Term Debt	 	209.1	 	229.2	 	
($200M convert due late 2008)	 	 	 	 	 	
 	 	 	 	 	 	
Shareholder’s Equity	 	$	251.3	 	$	248.6	 	
 
CASH GENERATED BY OPERATIONS IN 2005 TOTALED $44.9M
February 18, 2006: Veeco repurchased $20M of convertible notes
 
41

 
VEECO’S HISTORICAL FINANCIALS AND OUTLOOK 
 
2006 Forecast …potential record S ALES and P ROFITABILITY
 
[CHART]
 
[CHART]
 
•                   Founded in 1990 with Sales of $30M . . . IPO in 1994
•                   12 year Sales growth (1994 – 2005) from $86M to $410.2M . . . with +14% CAGR per year

*Exclusive of non-recurring charges
 
42

 
SAFE HARBOR STATEMENT 
 
To the extent that this presentation discusses expectations about market conditions, market acceptance and future sales of Veeco’s products, Veeco’s future financial performance, future disclosures, 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 challenges of volatility in end market conditions and the cyclical nature of the data storage, semiconductor, HB-LED/wireless and scientific research markets, risks associated with integrating acquired businesses and the acceptance of new products by individual customers and by the marketplace and other 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, 2005, 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 may review 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 10K and 10Q filings available on www.veeco.com
43

 
APPENDIX 
 
44

 
Q106 RECONCILIATION TABLE 

 	 	Three months ended March 31,	 	
 	 	(in thousands)	 	
 	 	2006	 	2005	 	
Operating income (loss)	 	$	1,639	 	$	(1,855	)	
Amortization expense	 	4,015	 	4,490	 	
Earnings before interest, income taxes and amortization (“EBITA”) excluding certain items	 	5,654	 	2,635	 	
Interest expense, net	 	1,378	 	2,146	 	
Gain on extinguishment of debt	 	(330	)(1)	—	 	
Adjustment to exclude gain on extinguishment of debt	 	330	 	—	 	
Earnings excluding certain items before income taxes	 	4,276	 	489	 	
Income tax provision at 35%	 	1,497	 	171	 	
Earnings excluding certain items	 	$	 2,779	 	$	 318	 	
Earnings excluding certain items per diluted share	 	$	 0.09	 	$	 0.01	 	
Diluted weighted average shares outstanding	 	$	 30,655	 	30,052	 	

(1)                                   During the first quarter of 2006, the Company repurchased $20.0 million aggregate principal amount of its 4.125% convertible subordinated notes. As a result of this repurchase, the amount of convertible subordinated notes outstanding was reduced to $200.0 million, and the Company recorded a gain from the early extinguishment of debt in the amount of $0.6 million, offset by a $0.3 million proportionate reduction in the related deferred financing costs for a net gain of $0.3 million.
 
NOTE:  The above reconciliation is intended to present Veeco’s operating results, excluding certain charges 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 by management 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
 
45

 
Q206 GUIDANCE RECONCILIATION TABLE 

 	 	Guidance for three months ended June	 	
 	 	30, 2006 (in thousands)	 	
 	 	Low End	 	High End	 	
Operating income (loss)	 	$	11,200	 	$	13,200	 	
Amortization expense	 	4,000	 	4,000	 	
Earnings before interest, income taxes and amortization (“EBITA”) excluding certain items	 	7,200	 	9,200	 	
Interest expense, net	 	1,500	 	1,500	 	
Earnings excluding certain items before income taxes	 	5,700	 	7,700	 	
Income tax provision at 35%	 	1,995	 	2,695	 	
Earnings excluding certain items	 	$	3,705	 	$	5,005	 	
Earnings excluding certain items per diluted share	 	$	0.12	 	$	0.16	 	
Diluted weighted average shares outstanding	 	31,200	 	31,200	 	

(1)                                   The forecasted income tax expenses for the three months ending June 31, 2006 high end and low end guidance is $1.2 million.
 
NOTE:  The above reconciliation is intended to present Veeco’s operating results, excluding certain charges 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 by management 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
 
46

 
RECONCILIATION OF OPERATING INCOME (LOSS)  "GAAP BASIS" to EBITA 

 	 	 	 	ADJUSTMENTS	 	 	 	
 	 	Operating income (loss) "GAAP basis"	 	Amortization expense	 	Asset impairment charges	 	Inventory write-offs	 	Merger and restructuring expenses	 	Write-off of deferred charges	 	Purchase accounting adjustments	 	Write-off of purchased in-process technology	 	Earnings before interest, income taxes, & amortization excluding certain items ("EBITA")	 	
FOR THE YEARS ENDING	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2007 (F)	 	$	55,000	 	$	15,000	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	70,000	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2006 (F)	 	34,163	 	15,837	 	—	 	—	 	—	 	—	 	—	 	—	 	50,000	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2005	 	11,066	 	16,583	 	—	 	—	 	1,165	 	—	 	—	 	—	 	28,814	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2004	 	(11,558	)	18,465	 	816	 	500	 	3,562	 	—	 	1,498	 	600	 	13,883	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2003	 	(9,325	)	13,800	 	—	 	—	 	5,403	 	—	 	1,664	 	1,500	 	13,042	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2002	 	(137,895	)	13,323	 	99,663	 	15,000	 	11,248	 	—	 	—	 	—	 	1,339	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2001	 	20,325	 	9,469	 	3,418	 	13,547	 	3,046	 	—	 	—	 	8,200	 	58,005	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2000	 	7,138	 	3,736	 	3,722	 	15,322	 	14,206	 	—	 	—	 	—	 	44,124	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
1999	 	39,709	 	479	 	—	 	—	 	2,600	 	—	 	—	 	2,474	 	45,262	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
1998	 	21,837	 	389	 	—	 	—	 	7,500	 	675	 	—	 	—	 	30,401	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
1997	 	38,994	 	276	 	—	 	—	 	2,250	 	—	 	—	 	4,200	 	45,720	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
1996	 	37,900	 	200	 	—	 	—	 	—	 	—	 	—	 	—	 	38,100	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
1995	 	24,200	 	200	 	—	 	—	 	—	 	—	 	—	 	—	 	24,400	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
1994	 	8,000	 	300	 	—	 	—	 	—	 	—	 	—	 	—	 	8,300	 	

 
47