Conference January 12, 2016 Safe Harbor This presentation may - - PowerPoint PPT Presentation

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Conference January 12, 2016 Safe Harbor This presentation may - - PowerPoint PPT Presentation

Investor Presentation Needham Growth Conference January 12, 2016 Safe Harbor This presentation may contain forward-looking statements and management may make additional forward- looking statements in response to your questions. These


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January 12, 2016

Investor Presentation Needham Growth Conference

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Safe Harbor

This presentation may contain forward-looking statements and management may make additional forward- looking statements in response to your questions. These statements are made under the ''safe harbor'' provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Statements that are not historical facts, including statements concerning

  • ur beliefs, forecasts, estimates and expectations, are forward-looking statements. Forward-looking

statements involve inherent risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including risks related to: the risk that our results of operations are cyclical and may fluctuate from period to period; the risk that we rely on a small number of customers for a significant portion of our revenue; the risk that the industries in which we participate are highly competitive and other risks outlined in our public filings with the Securities and Exchange Commission, including as set forth under “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in our most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K filed with the Securities and Exchange Commission. The forward-looking statements made in this presentation relate only to events or information as of the date on which the statements are made in this

  • presentation. Except as required by law, we undertake no obligation to update or revise publicly any forward-

looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

External Use 2

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Global leader in design, engineering and manufacturing of critical modules, subsystems and turnkey solutions primarily for the semiconductor capital equipment industry.

  • Today’s Press Release

– Q4 2015: Confirmed revenue guidance – Q1 2016: Expect q/q increase in revenue

  • Two accretive acquisitions, expanding Semi WFE footprint and increasing capabilities

– Marchi adds thermal management expertise – Miconex provides strong entry into Wet processing equipment segment

  • Successfully launched prototype capabilities for early entry into new semi technologies

– Kulicke & Soffa adopted UCT 3D printing manufacturing in latest product

External Use 3

UCT Highlights

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External Use 4

From Design to Prototype to Production

MANUFACTURING INTEGRATION & TEST PROTOTYPING/ DEVELOPMENT MANUFACTURING ENGINEERING SUPPLY CHAIN MANAGEMENT

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External Use 5

From Design to Prototype to Production

  • Broad expertise in multiple areas

 Complete outsourced design

  • Gas and liquid delivery
  • Mechanical and electrical assemblies
  • Thermal management

 Quick turn capabilities

PROTOTYPING/ DEVELOPMENT MANUFACTURING ENGINEERING MANUFACTURING INTEGRATION & TEST SUPPLY CHAIN MANAGEMENT

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External Use 6

From Design to Prototype to Production

  • Design for manufacturability (DFM)

 Lower production costs  Reduced cycle time

  • Partner with customers to meet demanding new

product requirements

  • Continuous improvement in operational excellence

MANUFACTURING INTEGRATION & TEST MANUFACTURING ENGINEERING PROTOTYPING/ DEVELOPMENT SUPPLY CHAIN MANAGEMENT

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External Use 7

From Design to Prototype to Production

  • Network of global, strategic partners
  • Reduce customer overhead through UCT expertise

in qualifying and managing complex supplier base

 Aggregated buying power  Improved customer delivery time

PROTOTYPING/ DEVELOPMENT MANUFACTURING INTEGRATION & TEST MANUFACTURING ENGINEERING SUPPLY CHAIN MANAGEMENT

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External Use 8

From Design to Prototype to Production

  • Comprehensive new product introduction process

 Simplify manufacturing process  Reduce manufacturing costs  Solve production challenges

  • Vertically integrated

MANUFACTURING PROTOTYPING/ DEVELOPMENT INTEGRATION & TEST MANUFACTURING ENGINEERING SUPPLY CHAIN MANAGEMENT

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External Use 9

From Design to Prototype to Production

  • Sub-system through full tool integration

 Electrical and mechanical assemblies  Ultra-high purity gas systems  Fluid delivery systems

  • Final test and shipment direct to end users

 “Extended factory to top OEMs”

INTEGRATION & TEST PROTOTYPING/ DEVELOPMENT MANUFACTURING MANUFACTURING ENGINEERING SUPPLY CHAIN MANAGEMENT

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OEM Component Suppliers 34% OEM Integration In-Sourcing 44%

UCT 5%

Major Contract Manufacturers 11% Other Contract Manufacturers 6%

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Semi Equipment Manufacturing Landscape

Source: UCT estimates.

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External Use 11

Why Outsource?

LOWER COST

Provides variable cost model

SCALABILITY

Gain ability to quickly scale manufacturing

OPERATIONAL FOCUS

Access to expertise in manufacturing

SUPPLY CHAIN

Ease of supply chain management

FINANCIAL FLEXIBILITY

Achieve reduction of inventory, improved cash flow

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External Use 12

Why We Win

COMPLEX DESIGNS

Track record of delivering highly complex Semi equipment and solutions

SCALABILITY

Effectively manage variable volumes and dynamically changing designs

SUPPLY CHAIN

Leader in Semi equipment supply chain

COST OF QUALITY

Consistently deliver high quality precision products

FINANCIAL STRENGTH

Strong balance sheet and flexible financial model

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External Use 13

Total WFE Market Opportunity

2015 WFE Estimate: $32B

Source: Gartner 2015 and UCT estimates

Thermal & Implant 5%

Deposition 23%

Removal/Etch 27%

Lithography 27%

Metrology & Inspection 12% Other 6%

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External Use 14

UCT Target WFE Markets

2015 WFE Estimate: $32B

Source: Gartner 2015 and UCT estimates.

Addresses

55%

  • f WFE Market

Thermal & Implant 5%

Deposition 23%

Removal/Etch 27%

Lithography 27%

Metrology & Inspection 12% Other 6%

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External Use

Total WFE Market Opportunity

Deposition & Etch Outpace Semi Market

2015 WFE Estimate: $32B

Dep & Etch

>70%

  • f UCT Semi

Sales

Dep & Etch CapEx Spend

9-10% CAGR

2013 - 2018

Total CapEx Spend

~6% CAGR

2013 - 2018

Thermal & Implant 5%

Deposition 23% Removal/Etch 27%

Lithography 27%

Metrology & Inspection 12% Other 6%

15

Source: Gartner 2015 and UCT estimates

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External Use 16

Growth Strategy

Increasing UCT Content on Platforms

Broaden Critical Process Capabilities Strategic Acquisitions Expand Customer Base Deeper Engagement with Existing Customers

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Frames Machining Plastics Prototype Machining Machining Metals

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Growing Suite of Critical Process Capabilities

Manufactured Components Chemical Delivery Sub-Systems Frames Prototype Machining Machining Metals Machining Plastics Heaters Sheet Metal Forming 3D Printing Complete Assemblies Gas

GAS

Assembly Integration & Test Liquid Assembly Integration & Test Liquid Sheet Metal Forming Heaters 3D Printing

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External Use 18

Semi Industry Consolidation

54% 63% 63% TOP 10

CHIP COMPANIES

TOP 5

WFE COMPANIES

77%

2010 2015(F) 2010 2015(F)

Source: Company Financials, SIA, Gartner 2015 and UCT estimates

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  • Large number of small, highly specialized suppliers
  • Management of suppliers growing unwieldy given tech requirements
  • Sustainability of some suppliers
  • Short product cycles driving quality and delivery cost challenges

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Supply Chain Consolidation Opportunity

30% TOP 10

SUPPLIERS to WFE

35%

2010 2015(F)

Source: Company financials, UCT estimates

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External Use 20

UCT Business Model

KEY DIFFERENTIATORS

  • Higher value capabilities
  • Improved operational efficiencies
  • Low capital requirements

OPERATING PROFIT DRIVERS

  • Revenue growth
  • Low operating expenses
  • Strategic acquisitions

GROSS MARGIN

15% - 18% Targeted

OPERATING MARGIN

8% - 10%

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(in $ millions) Q4'14 Q1'15* Q2'15 Q3'15** Sales $120.0 $125.3 $117.5 $122.8 Gross Profit $18.4 $19.9 $18.8 $18.9 Gross Profit % 15.3% 15.9% 16.0% 15.4% Operating Income $6.1 $6.3 $4.8 $5.1 Operating income % 5.1% 5.1% 4.1% 4.1% Cash $79.0 $69.6 $76.6 $59.7 Inventory $56.8 $59.9 $64.6 $75.6 Accounts Receivable $61.8 $69.6 $57.5 $57.3

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Select Financial Data

Pro forma financials adding back amortization. * Note: Q1'15 represents the first (partial) quarter of combined operations between UCT and Marchi. All prior quarters represent UCT operating results only. ** Note: Q3'15 represents the first (partial) quarter of combined operations between UCT and Miconex. All prior quarters represent UCT operating results only

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External Use 22

Solid Cash Generation

YE 2011 YE 2012 YE 2013 YE 2014

$23.7 $27.3 $30.0 $30.2

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  • Poised to outperform growth of Semi WFE market
  • Targeting fastest growing market segments
  • Delivering what customers need (OTD, quality, cost)
  • Industry trends reinforce leading position as potential

supply chain consolidator

  • Becoming partner to key customers

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Compelling UCT Opportunity

Winning Strategy Strong Gross Margins Improving Profitability Solid Cash Generation

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Ultra Clean Technology Investor Presentation Needham Growth Conference January 12, 2016

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