CORPORATE PRESENTATION Winter 2020 1 Safe Harbor This - - PowerPoint PPT Presentation

Winter 2020

CORPORATE PRESENTATION

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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 our beliefs, forecasts, estimates and expectations, and those regarding our expected financial results 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

Non-GAAP

Management uses non-GAAP gross margin, non-GAAP operating margin and non-GAAP net income to evaluate the Company's operating and financial

• results. The Company believes the presentation of non-GAAP results is useful to investors for analyzing our core business and business trends and

comparing performance to prior periods, along with enhancing investors' ability to view the Company's results from management's perspective. The presentation of this additional information should not be considered a substitute for results prepared in accordance with GAAP. Tables presenting reconciliations of non-GAAP results to U.S. GAAP results are included in the Appendix.

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Safe Harbor

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Enabling Semiconductor Technology for Nearly 30 Years

Sustainable & profitable growth solving complex problems

2002 2006 2010 2014 2018

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• 30%
• 20%
• 10%

0% 10% 20% 30% 40% 50% 60% 70%

2015 2016 2017 2018 2019 2020

WFE Etch + CVD UCT Semi 4

Consistently Outperforming Our Served Markets

Y/Y Growth Rate

* Source: Company data, UCT estimates based on SEMI WWSEMS Sept 2019 data

* *

DEP/ETCH F o u r t h Q u a r t e r 2 0 1 9

~55%

Of UCT Semi Sales

*

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$563 $924 $1,097 $1,066 5.4% 10.3% 7.8% 6.6%

2016 2017 2018 2019 UCT Revenue Op Margin

Proven Growth Strategy Driving Exceptional Results

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$ in Millions (FYE)

WFE YoY Growth

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Successful Inorganic Growth

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AUGUST, 2015

Purchase price $22.8M EV/EBITDA ~6.2

>40%

Entered wet chemistry business

FEBRUARY, 2015

Purchase price $43.6M EV/EBITDA ~11.8

>50%

Maintained attractive margins

SEPTEMBER, 2018

Purchase price $342.0M EV/EBITDA ~6.6

Added recurring service revenue stream

APRIL, 2019

Purchase price $30.0M EV/EBITDA ~5.4

Increased leading position in weldments

Increased revenue Increased revenue

Revenue increases from date of purchase to Q3 2019

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Diversified Path To Market Expansion

FACTORY INTERFACE GAS PANEL PROCESS CHAMBER TRANSFER CHAMBER

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DEPOSITION ETCH LITHOGRAPHY PACKAGE & TEST IMPLANT CMP PHOTORESIST

Supplying Many Critical Elements of the Manufacturing Process

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PREP FRONT-END PROCESSING BACK-END PROCESSING SEMI MANUFACTURING PROCESS CORE UCT MARKETS ADDITIONAL UCT MARKETS

CERTAIN STEPS REPEATED 20X – 30X

INGOT SLICING POLISHING EPITAXIAL ANNEAL INSPECTION WAFER CLEAN

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Industry and Customer Footprint

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* Includes low single digit OEM service revenue

Memory WFE

43%

Foundry & Logic WFE

33%

Other Equipment

Service

22%

UCT Revenue by Segment Lam

40%

Applied

23%

Other Equipment

16%

Service*

21%

UCT Revenue by Customer

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Global Product & Service Footprint

Strategically Close To Customers

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California Texas Oregon Maine Arizona Colorado

Manufacturing

UK Czech Republic Israel Korea China Philippines Singapore Taiwan

Global presence is a strategic benefit for major customers

Cleaning & Analysis

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Product & Service Market Opportunity

Company adaptation of Gartner Semiconductor Wafer Fab Equipment (Including Wafer-Level Packaging), Worldwide, Forecast 3Q18 Update & UCT estimates

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OEMs

Fabs

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SPS Growth Opportunities

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• Further penetration of current >10% customers
• Expand presence at other major OEM’s

– Goal to add 1-2 >10% customers over next several years

• Pursue smaller, specialty-device customers to support increasing 200mm

demand

– Further diversify revenue; leverage new high growth device markets

(i.e. 5G, IoT, and automotive)

• Opportunistic consolidation within fragmented supply chain

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SSB Growth Opportunities

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• Introduce proven Atomically Clean Surfaces™ to new customers
• Reduce cost of ownership utilizing advanced technology

– Longer part life through durable surface encapsulation – Higher tool productivity by chemical & thermal pre-conditioning parts

• Improve efficiencies by leveraging part cleaning knowledge

– Create value by efficiently managing customer spare parts – Utilize part lifecycle data to develop equipment uptime improvement

• Create integrated solutions across UCT’s core competencies

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SEMICONDUCTOR SERVICES BUSINESS

• Parts Cleaning & Coating

– 17 Advance Technology Cleaning

Centers close to customers

– New equipment cleaning and

• ngoing service contracts

– Onsite logistics and support

• Recurring revenue stream
• Growth Drivers

– Increase leadership in cleaning of

advanced sub-14nm process parts

– Penetrate top Tier IDM’s and OEM’s – Advantage: total wafer starts vs

WFE capital equipment spend

Cleaning Service Offerings - QuantumClean

DIFFUSION ETCHING CHEMICAL VAPOR DEPOSITION PHYSICAL VAPOR DEPOSITION ATOMIC LAYER DEPOSITION LITHOGRAPHY IMPLANT SUBFAB

BEFORE & AFTER CLEAN

Source: Company information.

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• Primary customers engage with

global suppliers

• Large number of regional players

serve ~72% of market

– Leading position with opportunity

to grow

QuantumClean/ChemTrace Advantaged Position

Source: SSB Management estimates. * Includes top OEM sub-system suppliers

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Cleaning + Analytical Lab Services Market*

2018 Top 4 IDM 59% Top 4 OEM* 11% Top 2 Foundries 6% All Other 24%

14% 6% 5% 3%

KoMiCo Cleanpart Pentagon Others (~90 companies)

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End Market Update

• Foundry - all leading edge nodes at high

capacity

– Foundry remains strong – broad based drivers

• Logic ramp continued strength

– Targeting ~25% capacity increase in 2020

• 3D NAND – seeing signs of investment

– Demand steadily increasing - expect upward

inflection on content per box increases

– Supply/demand balance returning, ~normal

utilization levels in Q1’20, pricing stabilizing

• DRAM – investment continuing

– Expect significant increase in 2020 investment –

exact timing unclear

– EUV R&D activity strengthening

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• 2 Sites in China
• Manufacturing facility in Shanghai

─ Deep partnership with Chinese OEM’s ─ Made in China for China and Asia

• minimal tariff issues
• Cleaning facility in Xi’an

─ Positioned to capitalize on growing service requirements in China as domestic chip production grows

China Strategy

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FINANCIAL UPDATE

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Q4’19 Key Takeaways

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• Revenue and EPS exceeded consensus
• Generated significant cash

– Paid down $14M term loan; $5M revolver

• Continued improvements in operational excellence

$ in Millions Q4’19 Total Revenue $286.4 Semi Revenue $272.6 Gross Margin 20.1% Operating Margin 8.1% Cash Generation $31.9 EPS $0.33 EPS (excl SBC) $0.40 $ in Millions Products Services Revenue $230.2 $56.2 Gross Margin 16.0% 36.5% Operating Margin 6.6% 14.3%

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Q1’20 Guidance Revenue $290.0-$320.0 EPS (excl SBC) $0.40-$0.52

Q1 Guidance

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• Expecting higher SPS revenues with increased

foundry demand

• Maintaining GM/OM
• Holding OPEX flat

– Could increase for Q1 with typical year end costs

(audit, etc.)

• Tax rate remains at 21%

$ in Millions

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Updated Margin Model

*

21 * Subject to semiconductor market cycle direction, product and service mix and other macro events beyond UCT’s control

Consolidated Performance Model

$0.8 - $1.0B $1.0 - $1.5B $1.5 -$2.0B Non-GAAP Gross Margin 15% - 18% 17% - 20% 18% - 21% Non-GAAP Operating Margin 5% - 8% 7% - 10% 9% - 12%

Business Unit Target Model

SPS SSB Non-GAAP Gross Margin 15% - 18% 33% - 36% Non-GAAP Operating Margin 8% - 10% 12% - 15%

Thank You

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Reconciliation: GAAP Net Income to Non-GAAP Net Income

• 1. Amortization of intangible assets related to the Company's

acquisitions of AIT, Thermal, FDS, QGT and DMS

• 2. Represents severance costs and costs related to facility

closures

• 3. Represents costs related to the QGT and DMS acquisitions
• 4. Impairment of assets classified as “held for sale” related to
• ur 3D printing business in Singapore
• 5. One-time product transition payment
• 6. Represents the loss on disposal of the Company's 3D

printing operations in Singapore

• 7. Fair value adjustments related to DMS inventory,

contingent consideration and purchase obligation

• 8. Depreciation adjustments related to QGT's fixed assets
• 9. Tax effect of items (1) through (8) above based on the non-

GAAP tax rate

• 10. The Company's GAAP tax expense is generally higher than

the Company's non-GAAP tax expense, primarily due to losses in the U.S. with full federal and state valuation

• allowances. The Company's non-GAAP tax rate and

resulting non-GAAP tax expense considers the tax implications as if there was no federal or state valuation allowance position in effect.

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* Refer to 10k

$ in Thousands

FY’16 FY’17 FY’18 FY’19

Net income (loss) per GAAP basis $10,051 $75,085 $36,596 $(9,351) Amortization of intangible assets (1) $5,757 $5,438 $9,580 $20,090 Restructuring charges (2) $1,176

• $4,821

$16,615 Acquisition related costs*(3) $438

• $10,102

$3,861 Impairment of “Held for Sale” Assets (4) $666

• Product transition fees (5)
• $657
• Disposal of business unit (6)
• $1,082

$52 Fair value adjustments (7)

• $7,457

Depreciation adjustments (8)

• $(360)

Income tax effect of non-GAAP adjustment(9)

$(1,664) $(714) $(4,501) $(11,261) Income tax effect of valuation allowance (10) $4,964 $469 $6,355 $9,461 Non-GAAP net income $21,388 $80,278 $64,692 $36,564

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FY’16 FY’17 FY’18 FY’19

Reported GAAP net income $0.30 $2.19 $0.94 $(0.24) Amortization of intangible assets (1) $0.18 $0.16 $0.25 $0.50 Restructuring charges (2) $0.04

• $0.12

$0.42 Acquisition related costs*(3) $0.01

• $0.26

$0.10 Impairment of “Held for Sale” Assets (4) $0.02

• Product transition fees (5)
• $0.02
• Disposal of business unit (6)
• $0.03
• Fair value adjustments (7)
• $0.19

Depreciation adjustments (8)

• $(0.01)

Income tax effect of non-GAAP adjustments (9) $(0.05) $(0.02) $(0.12) $(0.28) Income tax effect of valuation allowance (10) $0.15 $0.01 $0.16 $0.23 Non-GAAP net income $0.65 $2.34 $1.66 $0.91 Weighted Avg. number of diluted shares (in K) 33,150 34,303 38,919 40,027

Reconciliation: GAAP Earnings Per Diluted Share to Non-GAAP Earnings Per Diluted Share

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* Refer to 10k

• 1. Amortization of intangible assets related to the Company's

acquisitions of AIT, Thermal, FDS, QGT and DMS

• 2. Represents severance costs and costs related to facility

closures

• 3. Represents costs related to the QGT and DMS acquisitions
• 4. Impairment of assets classified as “held for sale” related to
• ur 3D printing business in Singapore
• 5. One-time product transition payment
• 6. Represents the loss on disposal of the Company's 3D

printing operations in Singapore

• 7. Fair value adjustments related to DMS inventory,

contingent consideration and purchase obligation

• 8. Depreciation adjustments related to QGT's fixed assets
• 9. Tax effect of items (1) through (8) above based on the non-

GAAP tax rate

• 10. The Company's GAAP tax expense is generally higher than

the Company's non-GAAP tax expense, primarily due to losses in the U.S. with full federal and state valuation

• allowances. The Company's non-GAAP tax rate and

resulting non-GAAP tax expense considers the tax implications as if there was no federal or state valuation allowance position in effect.

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Supporting Calculations

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Slide 9 FY’15 FY’19

Lam Research 51% 40% Applied Materials 26% 23% Others 23% 16% Service*

• 21%

Revenue (in millions) $469 $1,066

Source: Company releases, company estimates. * Includes low single digit OEM service revenue