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): February 19 , 2014
 
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):
 
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))

 

 
Item 2.02   Results of Operations and Financial Condition.
 
On February 19, 2014, Veeco Instruments Inc. issued a press release announcing its financial results for the quarter and year ended December 31, 2013.  In connection with the release and the related conference call, Veeco posted a presentation relating to its fourth quarter and full-year 2013 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 February 19, 2014	
 	 	 	
99.2	 	Veeco Q4, Earnings Conference Call 2/19/14	
 
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.

February 19, 2014	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 February 19, 2014	
 	 	 	
99.2	 	Veeco Q4, Earnings Conference Call 2/19/14	
 
2 

Exhibit 99.1

	 
 
NEWS	
 
Veeco Instruments Inc., 1 Terminal Drive, Plainview, NY 11803 Tel. 516-677-0200 Fax. 516-677-0380
 
FOR IMMEDIATE RELEASE
Financial Contact: Debra Wasser, SVP Investor Relations & Corporate Communications, 516-677-0200 x1472
Media Contact:  Jeffrey Pina, Senior Director Marcom, 516-677-0200 x1222
 
VEECO REPORTS FOURTH QUARTER 2013 FINANCIAL RESULTS
 
Plainview, NY, February 19, 2014 — Veeco Instruments Inc. (Nasdaq: VECO) announced its financial results for the fourth quarter ended December 31, 2013.  Veeco reports its results on a U.S. generally accepted accounting principles (“GAAP”) basis, and also provides results excluding certain items.  Please refer to the attached table for details of the reconciliation between GAAP operating results and Non-GAAP operating results.  All results presented herein are for Veeco’s “Continuing Operations.”
 
GAAP Results ($M except per share data)  

 	 	Q4 ‘13	 	Q4 ‘12	 	
Revenues	 	$	73.2	 	$	106.8	 	
Net loss	 	$	(22.1	)	$	(8.6	)	
Per share loss	 	$	(0.57	)	$	(0.22	)	
 
Non-GAAP Results ($M except per share data)

 	 	Q4 ‘13	 	Q4 ‘12	 	
Adjusted EBITA	 	$	(26.6	)	$	1.2	 	
Net loss	 	$	(16.4	)	$	(3.5	)	
Per share loss	 	$	(0.42	)	$	(0.09	)	
 
“Veeco’s full year 2013 revenue was $332 million, a decline of 36% from 2012, with all of our businesses experiencing down cycles,” commented John R. Peeler, Chairman and Chief Executive Officer.  “Fourth quarter revenue was $73 million, within our guidance range. Very weak gross margins and high operating expenses contributed to poor bottom line performance. A highlight for the quarter was our continued solid cash management in a challenging environment.”  Fourth quarter LED & Solar revenues were $56 million, of which $50 million was MOCVD.  Data Storage revenues were $17 million.
 
Peeler continued, “As expected, fourth quarter bookings remained weak at $85 million, down 7% sequentially. We haven’t yet seen a recovery in business conditions. MOCVD bookings decreased 22% sequentially to $52 million and have been at trough levels for over two years .  MBE and Data Storage bookings improved slightly from the prior quarter, to $11 million and $22 million, respectively.  And while not included in reported fourth quarter bookings, we received a purchase order from the world leader in mobile OLED displays for a next generation Fast Array Scanning Atomic Layer Deposition (FAST-ALD™) prototype system.
 
“While 2013 was a challenging year, we remain positive about trends in LED lighting and our new growth opportunity in flexible OLED encapsulation for mobile phones,” added Peeler. “Our R&D capability, technology leadership position, world class sales and support organization, flexible manufacturing approach and solid balance sheet provide a strong foundation for the future.”
 
First Quarter 2014 Guidance and Outlook
 
Veeco’s first quarter 2014 revenue is currently forecasted to be between $85 million and $95 million, with gross margins between 33-35% and operating spending in the range of $42-43 million.
 
Peeler commented, “While it is too early to call a turn in our MOCVD business, we are seeing some encouraging signs.  LED fab utilization rates appear to be relatively stable and high at all key accounts and solid state lighting

 
adoption is accelerating.  We are talking to leading customers about potential capacity expansions, and our orders are likely to improve this quarter.
 
Our priority for 2014 is to take the steps necessary to transition the Company back to profitable growth.  We are focused on four areas to improve our performance: 1) developing and launching game-changing new products that enable cost effective LED lighting, flexible OLED encapsulation and other emerging technologies; 2) executing manufacturing cost reduction initiatives and lowering expenses wherever possible; 3) driving process improvement initiatives to make us more efficient; and 4) improving product differentiation, customer value and pricing to stem margin erosion. We anticipate that Veeco will run at a loss for a couple of quarters, but see a very bright future for the long run,” concluded Peeler.
 
Conference Call Information
 
A conference call reviewing these results has been scheduled for 5:00pm today. To join the call, dial 1-888-254-3571 (toll free) or 1-913-312-1504 and use passcode 7662716. The call will also be webcast live on the Veeco website at www.veeco.com. A replay of the call will be available beginning at 8:00pm tonight through 8:00pm ET on March 5, 2014 at 888-203-1112 or 719-457-0820, using passcode 7662716, and on the Veeco website.
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, flexible OLEDs, power electronics, hard drives, MEMS and wireless chips.  We are the market leader in MOCVD, MBE, Ion Beam 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, 2012 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 Instruments Inc. and Subsidiaries
 Consolidated Statements of Operations
(In thousands, except per share data)

 	 	Three months ended	 	Year ended	 	
 	 	December 31,	 	December 31,	 	
 	 	2013	 	2012	 	2013	 	2012	 	
 	 	(Unaudited)	 	(Unaudited)	 	(Unaudited)	 	(Audited)	 	
 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	73,209	 	$	106,849	 	$	331,749	 	$	516,020	 	
Cost of sales	 	57,567	 	68,122	 	228,607	 	300,887	 	
Gross profit	 	15,642	 	38,727	 	103,142	 	215,133	 	
 	 	 	 	 	 	 	 	 	 	
Operating expenses (income):	 	 	 	 	 	 	 	 	 	
Selling, general and administrative	 	26,409	 	18,552	 	85,486	 	73,110	 	
Research and development	 	20,824	 	22,162	 	81,424	 	95,153	 	
Amortization	 	2,961	 	1,031	 	5,527	 	4,908	 	
Restructuring	 	(286	)	1,736	 	1,485	 	3,813	 	
Asset impairment	 	1,220	 	1,335	 	1,220	 	1,335	 	
Total operating expenses	 	51,128	 	44,816	 	175,142	 	178,319	 	
 	 	 	 	 	 	 	 	 	 	
Other expense (income), net	 	(876	)	228	 	(1,017	)	(398	)	
Changes in contingent consideration	 	829	 	—	 	829	 	—	 	
 	 	 	 	 	 	 	 	 	 	
Operating income (loss)	 	(35,439	)	(6,317	)	(71,812	)	37,212	 	
Interest income (expense), net	 	(18	)	266	 	602	 	974	 	
Income (loss) from continuing operations before income taxes	 	(35,457	)	(6,051	)	(71,210	)	38,186	 	
Income tax provision (benefit)	 	(13,372	)	2,591	 	(28,947	)	11,657	 	
Income (loss) from continuing operations	 	(22,085	)	(8,642	)	(42,263	)	26,529	 	
 	 	 	 	 	 	 	 	 	 	
Discontinued operations:	 	 	 	 	 	 	 	 	 	
Income (loss) from discontinued operations before income taxes	 	—	 	(265	)	—	 	6,269	 	
Income tax provision (benefit)	 	—	 	148	 	—	 	1,870	 	
Income (loss) from discontinued operations	 	—	 	(413	)	—	 	4,399	 	
 	 	 	 	 	 	 	 	 	 	
Net income (loss)	 	$	(22,085	)	$	(9,055	)	$	(42,263	)	$	30,928	 	
 	 	 	 	 	 	 	 	 	 	
Income (loss) per common share:	 	 	 	 	 	 	 	 	 	
Basic:	 	 	 	 	 	 	 	 	 	
Continuing operations	 	$	(0.57	)	$	(0.22	)	$	(1.09	)	$	0.69	 	
Discontinued operations	 	—	 	(0.01	)	—	 	0.11	 	
Income (loss)	 	$	(0.57	)	$	(0.23	)	$	(1.09	)	$	0.80	 	
 	 	 	 	 	 	 	 	 	 	
Diluted:	 	 	 	 	 	 	 	 	 	
Continuing operations	 	$	(0.57	)	$	(0.22	)	$	(1.09	)	$	0.68	 	
Discontinued operations	 	—	 	(0.01	)	—	 	0.11	 	
Income (loss)	 	$	(0.57	)	$	(0.23	)	$	(1.09	)	$	0.79	 	
 	 	 	 	 	 	 	 	 	 	
Weighted average shares outstanding:	 	 	 	 	 	 	 	 	 	
Basic	 	38,904	 	38,698	 	38,807	 	38,477	 	
Diluted	 	38,904	 	38,698	 	38,807	 	39,051	 	

 
Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)

 	 	December 31,	 	December 31,	 	
 	 	2013	 	2012	 	
 	 	(Unaudited)	 	(Audited)	 	
ASSETS	 	 	 	 	 	
Current assets:	 	 	 	 	 	
Cash and cash equivalents	 	$	210,799	 	$	384,557	 	
Short-term investments	 	281,538	 	192,234	 	
Restricted cash	 	2,738	 	2,017	 	
Accounts receivable, net	 	23,823	 	63,169	 	
Inventories	 	59,726	 	59,807	 	
Prepaid expenses and other current assets	 	35,019	 	42,700	 	
Total current assets	 	613,643	 	744,484	 	
 	 	 	 	 	 	
Property, plant and equipment at cost, net	 	89,139	 	98,302	 	
Goodwill	 	91,348	 	55,828	 	
Deferred income taxes	 	397	 	935	 	
Intangible assets, net	 	114,716	 	20,974	 	
Other assets	 	38,726	 	16,781	 	
Total assets	 	$	947,969	 	$	937,304	 	
 	 	 	 	 	 	
LIABILITIES AND EQUITY	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	
Accounts payable	 	$	35,755	 	$	26,087	 	
Accrued expenses and other current liabilities	 	51,243	 	41,541	 	
Customer deposits and deferred revenue	 	34,754	 	42,099	 	
Income taxes payable	 	6,149	 	2,292	 	
Current portion of long-term debt	 	290	 	268	 	
Total current liabilities	 	128,191	 	112,287	 	
 	 	 	 	 	 	
Deferred income taxes	 	28,052	 	7,137	 	
Long-term debt	 	1,847	 	2,138	 	
Other liabilities	 	9,649	 	4,530	 	
Total liabilities	 	167,739	 	126,092	 	
 	 	 	 	 	 	
Equity	 	780,230	 	811,212	 	
 	 	 	 	 	 	
Total liabilities and equity	 	$	947,969	 	$	937,304	 	

 
Veeco Instruments Inc. and Subsidiaries
Reconciliation of GAAP to non-GAAP results
(In thousands, except per share data)
(Unaudited)

 	 	Three months ended	 	Year ended	 	
 	 	December 31,	 	December 31,	 	
 	 	2013	 	2012	 	2013	 	2012	 	
 	 	 	 	 	 	 	 	 	 	
Adjusted EBITA	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Operating income (loss)	 	$	(35,439	)	$	(6,317	)	$	(71,812	)	$	37,212	 	
 	 	 	 	 	 	 	 	 	 	
Non-GAAP adjustments:	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Amortization	 	2,961	 	1,031	 	5,527	 	4,908	 	
Equity-based compensation	 	4,075	 	3,445	 	13,130	 	13,854	 	
Restructuring	 	(286	)	1,736	 	1,485	 	3,813	 	
Asset impairment	 	1,220	 	1,335	 	1,220	 	1,335	 	
Changes in contingent consideration	 	829	 	—	 	829	 	—	 	
 	 	 	 	 	 	 	 	 	 	
Earnings (loss) from continuing operations before interest, income taxes and amortization excluding certain items (“Adjusted EBITA”)	 	$	(26,640	)	$	1,230	 	$	(49,621	)	$	61,122	 	

Non-GAAP Net Income (Loss)	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Net income (loss) from continuing operations (GAAP basis)	 	$	(22,085	)	$	(8,642	)	$	(42,263	)	$	26,529	 	
 	 	 	 	 	 	 	 	 	 	
Non-GAAP adjustments:	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Amortization	 	2,961	 	1,031	 	5,527	 	4,908	 	
Equity-based compensation	 	4,075	 	3,445	 	13,130	 	13,854	 	
Restructuring	 	(286	)	1,736	 	1,485	 	3,813	 	
Asset impairment	 	1,220	 	1,335	 	1,220	 	1,335	 	
Changes in contingent consideration	 	829	 	—	 	829	 	—	 	
Income tax effect of non-GAAP adjustments	 	(3,064	)(1)	(2,396	)(1)	(7,999	)(1)	(8,796	)(1)	
Non-GAAP net income (loss)	 	$	(16,350	)	$	(3,491	)	$	(28,071	)	$	41,643	 	
 	 	 	 	 	 	 	 	 	 	
Non-GAAP earnings (loss) per diluted share excluding certain items (“Non-GAAP EPS”)	 	$	(0.42	)	$	(0.09	)	$	(0.72	)	$	1.07	 	
 	 	 	 	 	 	 	 	 	 	
Diluted weighted average shares outstanding	 	38,904	 	38,698	 	38,807	 	39,051	 	

(1) The Company utilized the with and without method to determine the income tax effect of non-GAAP adjustments.
 
NOTE - This reconciliation is not in accordance with, or an alternative method for, accounting principles generally accepted in the United States (“GAAP”), and may be different from similar measures presented by other companies. Management of the Company evaluates performance of its business units based on adjusted EBITA and Non-GAAP EPS, which are the primary indicators used to plan and forecast future periods. The presentation of this financial measure facilitates meaningful comparison with prior periods, as management of the Company believes adjusted EBITA and Non-GAAP EPS report baseline performance and thus provides useful information.

 
Veeco Instruments Inc. and Subsidiaries
Segment Bookings, Revenues, and Reconciliation
of Operating Income (Loss) to Adjusted EBITA
(In thousands)
(Unaudited)

 	 	Three months ended	 	Year ended	 	
 	 	December 31,	 	December 31,	 	
 	 	2013	 	2012	 	2013	 	2012	 	
LED & Solar	 	 	 	 	 	 	 	 	 	
Bookings	 	$	63,312	 	$	75,420	 	$	237,630	 	$	305,185	 	
 	 	 	 	 	 	 	 	 	 	
Revenues	 	$	56,501	 	$	81,924	 	$	249,742	 	$	363,181	 	
 	 	 	 	 	 	 	 	 	 	
Operating income (loss)	 	$	(23,068	)	$	2,461	 	$	(38,741	)	$	31,384	 	
Amortization	 	2,637	 	708	 	4,233	 	3,586	 	
Equity-based compensation	 	2,084	 	1,384	 	5,126	 	5,400	 	
Restructuring	 	(198	)	516	 	1,017	 	1,233	 	
Asset impairment	 	1,174	 	—	 	1,174	 	—	 	
Changes in contingent consideration	 	829	 	—	 	829	 	—	 	
Adjusted EBITA	 	$	(16,542	)	$	5,069	 	$	(26,362	)	$	41,603	 	
 	 	 	 	 	 	 	 	 	 	
Data Storage	 	 	 	 	 	 	 	 	 	
Bookings	 	$	21,648	 	$	16,869	 	$	93,988	 	$	86,727	 	
 	 	 	 	 	 	 	 	 	 	
Revenues	 	$	16,708	 	$	24,925	 	$	82,007	 	$	152,839	 	
 	 	 	 	 	 	 	 	 	 	
Operating income (loss)	 	$	(3,988	)	$	(4,113	)	$	(4,124	)	$	17,340	 	
Amortization	 	324	 	323	 	1,294	 	1,322	 	
Equity-based compensation	 	646	 	306	 	1,703	 	1,920	 	
Restructuring	 	(88	)	1,220	 	410	 	2,521	 	
Asset impairment	 	46	 	1,335	 	46	 	1,335	 	
Adjusted EBITA	 	$	(3,060	)	$	(929	)	$	(671	)	$	24,438	 	
 	 	 	 	 	 	 	 	 	 	
Unallocated Corporate	 	 	 	 	 	 	 	 	 	
Operating income (loss)	 	$	(8,383	)	$	(4,665	)	$	(28,947	)	$	(11,512	)	
Equity-based compensation	 	1,345	 	1,755	 	6,301	 	6,534	 	
Restructuring	 	—	 	—	 	58	 	59	 	
Adjusted EBITA	 	$	(7,038	)	$	(2,910	)	$	(22,588	)	$	(4,919	)	
 	 	 	 	 	 	 	 	 	 	
Total	 	 	 	 	 	 	 	 	 	
Bookings	 	$	84,960	 	$	92,289	 	$	331,618	 	$	391,912	 	
 	 	 	 	 	 	 	 	 	 	
Revenues	 	$	73,209	 	$	106,849	 	$	331,749	 	$	516,020	 	
 	 	 	 	 	 	 	 	 	 	
Operating income (loss)	 	$	(35,439	)	$	(6,317	)	$	(71,812	)	$	37,212	 	
Amortization	 	2,961	 	1,031	 	5,527	 	4,908	 	
Equity-based compensation	 	4,075	 	3,445	 	13,130	 	13,854	 	
Restructuring	 	(286	)	1,736	 	1,485	 	3,813	 	
Asset impairment	 	1,220	 	1,335	 	1,220	 	1,335	 	
Changes in contingent consideration	 	829	 	—	 	829	 	—	 	
Adjusted EBITA	 	$	(26,640	)	$	1,230	 	$	(49,621	)	$	61,122	 	

Exhibit 99.2

	Q4 2013 Conference Call February 19, 2014	

	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, 2012 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.	

	John Peeler, Chairman & Chief Executive Officer Introduction	

	Difficult Finish to a Challenging Year Q4 13 Bookings down 7% sequentially to $85M Cash and Short Term Investments $495M Q4 13 Revenue down 26% sequentially to $73M Trough conditions continued in all businesses Continued strong balance sheet and cash preservation As expected, low shipment levels in MOCVD and Data Storage	

	Dave Glass, CFO Financial Highlights	

	Q4 2013 vs. Q3 2013 Q4 2013 Q3 2013 Revenue $73M $99M GM 21% 31% OPEX* $48M $39M Loss from continuing operations ($22M) ($6M) Adjusted EBITA ($27M) ($5M) Non-GAAP EPS ($0.42) ($0.08) Poor Gross Margin & Spike in OPEX Pressure Q4 2013 Bottom Line *Excludes amortization and restructuring; see financial tables	

	Q4 2013 Revenue Highlights Total Revenue: $73M LED & Solar ~$56M MOCVD $50M; down 27% sequentially MBE & ALD $6M ($M) Q4 ‘13 Q3 ‘13 Adj EBITA ($16.5M) ($1.7M) ($M) Q4 ‘13 Q3 ‘13 Adj EBITA ($3.1M) $2.1M Data Storage ~$17M Data Storage down 31% sequentially	

	Q4 2013 Bookings Highlights Total Bookings: $85M LED & Solar ~$63M MOCVD at $52M; down 22% sequentially at “trough” levels MBE $11M; up 56% sequentially Data Storage ~$22M Up 20% sequentially	

	Strong Balance Sheet 12/31/13 12/31/12 Cash & Short-term Investments* $495M $579M Accounts Receivable $24M $63M Inventory $60M $60M Fixed Assets, Net $89M $98M Total Assets $948M $937M Long-term Debt (including current portion) $2M $2M Equity $780M $811M *Includes $2.7 million of restricted cash as of 12/31/13 and $2.0 million as of 12/31/12. $76M Cash used for Synos ALD Purchase in Q4 2013 2013 Cash Flow About Breakeven	

	Q1 2014 Guidance Q1 2014 Orders Likely to Increase Revenue $85-95 million Gross Margins 33-35% OPEX (Includes equity compensation and excludes amortization) $42-43 million Revenue and GM to improve; OPEX to trend back down Modeling footnote: Q1 2014 Equity comp. $4.7M; and amortization $2.9M	

	Wheels in Motion for Gross Margin Recovery Gross Margin ~31% >40% MOCVD ASP Recovery and Impact of New Products MOCVD and Other Cost Reduction Initiatives Volume Improvement ALD to volume revenue	

	Business Update and Outlook	

	LED Lighting Adoption to Accelerate in 2014 and 2015 Source **: McKinsey Lighting Report 2012 69% 2020 Average Selling Price for Different Lamps 45% 2016 LED Value-Based Percent of Lighting Market** Source *: iHS, Barclays Research estimates 9% 2012 >60% CAGR	

	2014: Transition to MOCVD Growth LED demand Supply Chinese subsidy Cellphone Backlight Lighting Phase 1: Outdoor (government subsidy) Phase 2: Industrial Commercial (ROI) Phase 3: Residential (bulb cost) Now Over capacity cross-over Residential demand pulled-in Global Number of Sockets 2013 Tier 1 LED customers maxing out yield improvements; reporting healthier financials Some industry consolidation occurring Market transition from subsidy-driven to demand-driven	

	Veeco: Top Choice of LED Industry Leaders Total MOCVD Industry Shipments 2010-2013 Shipment Market Share 2010-2013 Source for both charts: IHS Q4 13 Report on MOCVD Shipments Veeco market share reached >60% in 2013 #1 supplier to majority of LED makers with the biggest installed base #1 supplier to majority of LED technology leaders	

	Flexible OLED Heating Up Flexible & Curved Displays Take Center Stage at CES Veeco Receives P.O. for Next-Gen Prototype ALD System Timing of Production Ramp for Mobile Uncertain Source: Samsung Analyst Day November 2013 “Carrying SmallSeeing Big” Flexible penetration 0.2% 12% 40% $30 $43 $50 Billion	

	Veeco’s Top Priorities Develop and launch game changing new products Execute manufacturing cost reduction initiatives and lower expenses wherever possible Drive process improvement initiatives Improve product differentiation, customer value and pricing to stem margin erosion Transition to Profitable Growth	

	Q&A Session	

	Financial Tables and Reconciliation	

	Income Statement 39,051 38,807 38,698 38,904 Diluted 38,477 38,807 38,698 38,904 Basic Weighted average shares outstanding: $ 0.79 $ (1.09) $ (0.23) $ (0.57) Income (loss) 0.11 - (0.01) - Discontinued operations $ 0.68 $ (1.09) $ (0.22) $ (0.57) Continuing operations Diluted: $ 0.80 $ (1.09) $ (0.23) $ (0.57) Income (loss) 0.11 - (0.01) - Discontinued operations $ 0.69 $ (1.09) $ (0.22) $ (0.57) Continuing operations Basic: Income (loss) per common share: $ 30,928 $ (42,263) $ (9,055) $ (22,085) Net income (loss) 4,399 - (413) - Income (loss) from discontinued operations 1,870 - 148 - Income tax provision (benefit) 6,269 - (265) - Income (loss) from discontinued operations before income taxes Discontinued operations: 26,529 (42,263) (8,642) (22,085) Income (loss) from continuing operations 11,657 (28,947) 2,591 (13,372) Income tax provision (benefit) 38,186 (71,210) (6,051) (35,457) Income (loss) from continuing operations before income taxes 974 602 266 (18) Interest income (expense), net 37,212 (71,812) (6,317) (35,439) Operating income (loss) - 829 - 829 Changes in contingent consideration (398) (1,017) 228 (876) Other expense (income), net 178,319 175,142 44,816 51,128 Total operating expenses 1,335 1,220 1,335 1,220 Asset impairment 3,813 1,485 1,736 (286) Restructuring 4,908 5,527 1,031 2,961 Amortization 95,153 81,424 22,162 20,824 Research and development 73,110 85,486 18,552 26,409 Selling, general and administrative Operating expenses (income): 215,133 103,142 38,727 15,642 Gross profit 300,887 # 228,607 68,122 57,567 Cost of sales $ 516,020 # $ 331,749 $ 106,849 $ 73,209 Net sales (Audited) (Unaudited) (Unaudited) (Unaudited) 2012 2013 2012 2013 December 31, December 31, Year ended Three months ended (In thousands, except per share data) Consolidated Statements of Operations Veeco Instruments Inc. and Subsidiaries	

	Balance Sheet $ 937,304 $ 947,969 Total liabilities and equity 811,212 780,230 Equity 126,092 167,739 Total liabilities 4,530 9,649 Other liabilities 2,138 1,847 Long-term debt 7,137 28,052 Deferred income taxes 112,287 128,191 Total current liabilities 268 290 Current portion of long-term debt 2,292 6,149 Income taxes payable 42,099 34,754 Customer deposits and deferred revenue 41,541 51,243 Accrued expenses and other current liabilities $ 26,087 $ 35,755 Accounts payable Current liabilities: LIABILITIES AND EQUITY $ 937,304 $ 947,969 Total assets 16,781 38,726 Other assets 20,974 114,716 Intangible assets, net 935 397 Deferred income taxes 55,828 91,348 Goodwill 98,302 89,139 Property, plant and equipment at cost, net 744,484 613,643 Total current assets 42,700 35,019 Prepaid expenses and other current assets 59,807 59,726 Inventories 63,169 23,823 Accounts receivable, net 2,017 2,738 Restricted cash 192,234 281,538 Short-term investments $ 384,557 $ 210,799 Cash and cash equivalents Current assets: ASSETS (Audited) (Unaudited) 2012 2013 December 31, December 31, (In thousands) Condensed Consolidated Balance Sheets Veeco Instruments Inc. and Subsidiaries	

	Reconciliation NOTE - This reconciliation is not in accordance with, or an alternative method for, accounting principles generally accepted in the United States ("GAAP"), and may be different from similar measures presented by other companies. Management of the Company (1) The Company utilized the with and without method to determine the income tax effect of non-GAAP adjustments. 39,051 38,807 38,698 38,904 Diluted weighted average shares outstanding $ 1.07 $ (0.72) $ (0.09) $ (0.42) Non-GAAP earnings (loss) per diluted share excluding certain items ("Non-GAAP EPS") $ 41,643 $ (28,071) $ (3,491) $ (16,350) Non-GAAP net income (loss) (1) (8,796) (1) (7,999) (1) (2,396) (1) (3,064) Income tax effect of non-GAAP adjustments - 829 - 829 Changes in contingent consideration 1,335 1,220 1,335 1,220 Asset impairment 3,813 1,485 1,736 (286) Restructuring 13,854 13,130 3,445 4,075 Equity-based compensation 4,908 5,527 1,031 2,961 Amortization Non-GAAP adjustments: $ 26,529 $ (42,263) $ (8,642) $ (22,085) Net income (loss) from continuing operations (GAAP basis) Non-GAAP Net Income (Loss) $ 61,122 $ (49,621) $ 1,230 $ (26,640) Earnings (loss) from continuing operations before interest, income taxes and amortization excluding certain items ("Adjusted EBITA") - 829 - 829 Changes in contingent consideration 1,335 1,220 1,335 1,220 Asset impairment 3,813 1,485 1,736 (286) Restructuring 13,854 13,130 3,445 4,075 Equity-based compensation 4,908 5,527 1,031 2,961 Amortization Non-GAAP adjustments: $ 37,212 $ (71,812) $ (6,317) $ (35,439) Operating income (loss) Adjusted EBITA 2012 2013 2012 2013 December 31, December 31, Year ended Three months ended (Unaudited) (In thousands, except per share data) Reconciliation of GAAP to non-GAAP results Veeco Instruments Inc. and Subsidiaries	

	Segment $ 61,122 $ (49,621) $ 1,230 $ (26,640) Adjusted EBITA - 829 - 829 Changes in contingent consideration 1,335 1,220 1,335 1,220 Asset impairment 3,813 1,485 1,736 (286) Restructuring 13,854 13,130 3,445 4,075 Equity-based compensation 4,908 5,527 1,031 2,961 Amortization $ 37,212 $ (71,812) $ (6,317) $ (35,439) Operating income (loss) $ 516,020 $ 331,749 $ 106,849 $ 73,209 Revenues $ 391,912 $ 331,618 $ 92,289 $ 84,960 Bookings Total $ (4,919) $ (22,588) $ (2,910) $ (7,038) Adjusted EBITA 59 58 - - Restructuring 6,534 6,301 1,755 1,345 Equity-based compensation $ (11,512) $ (28,947) $ (4,665) $ (8,383) Operating income (loss) Unallocated Corporate $ 24,438 $ (671) $ (929) $ (3,060) Adjusted EBITA 1,335 46 1,335 46 Asset impairment 2,521 410 1,220 (88) Restructuring 1,920 1,703 306 646 Equity-based compensation 1,322 1,294 323 324 Amortization $ 17,340 $ (4,124) $ (4,113) $ (3,988) Operating income (loss) $ 152,839 $ 82,007 $ 24,925 $ 16,708 Revenues $ 86,727 $ 93,988 $ 16,869 $ 21,648 Bookings Data Storage $ 41,603 $ (26,362) $ 5,069 $ (16,542) Adjusted EBITA - 829 - 829 Changes in contingent consideration - 1,174 - 1,174 Asset impairment 1,233 1,017 516 (198) Restructuring 5,400 5,126 1,384 2,084 Equity-based compensation 3,586 4,233 708 2,637 Amortization $ 31,384 $ (38,741) $ 2,461 $ (23,068) Operating income (loss) $ 363,181 $ 249,742 $ 81,924 $ 56,501 Revenues $ 305,185 $ 237,630 $ 75,420 $ 63,312 Bookings LED & Solar 2012 2013 2012 2013 December 31, December 31, Year ended Three months ended (Unaudited) (In thousands) of Operating Income (Loss) to Adjusted EBITA Segment Bookings, Revenues, and Reconciliation Veeco Instruments Inc. and Subsidiaries