May 11, 2016
Investor Presentation Jefferies Technology Conference May 11, 2016 - - PowerPoint PPT Presentation
Investor Presentation Jefferies Technology Conference May 11, 2016 - - PowerPoint PPT Presentation
Investor Presentation Jefferies Technology Conference May 11, 2016 Safe Harbor This presentation may contain forward-looking statements and management may make additional forward- looking statements in response to your questions. These
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
Global leader in design, engineering and manufacturing of critical modules, subsystems and turnkey solutions primarily for the semiconductor capital equipment industry.
- Q1’16 revenue of $112M, a quarter-over-quarter increase of 8.5%
– Q2’16 revenue guidance $123 – 128M and EPS* $0.05 – $0.08
- Continued recovery in Semiconductor Wafer Equipment spending
– Industry commitment to node transitions in logic (10nm) and DRAM (≤20nm) – Increased capital intensity in deposition and etch for FinFET and 3D NAND
- Building the platform for UCT’s growth
– Strategic investment in capabilities to enable ramp of new business – Streamlining business systems and processes
External Use 3
UCT Highlights
* Pro forma earnings per share, adding back amortization.
External Use 4
From Design to Prototype to Production
MANUFACTURING INTEGRATION & TEST PROTOTYPING/ DEVELOPMENT MANUFACTURING ENGINEERING SUPPLY CHAIN MANAGEMENT
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
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
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
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
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
OEM Component Suppliers 34% OEM Integration In-Sourcing 44%
UCT 5%
Major Contract Manufacturers 11% Other Contract Manufacturers 6%
External Use 10
Semi Equipment Manufacturing Landscape
Source: UCT estimates.
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
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
External Use 13
Total WFE Market Opportunity
2016 WFE Estimate: $33B
Source: Gartner 2016 and UCT estimates
Thermal & Implant 5%
Deposition 25%
Removal/Etch 25%
Lithography 26%
Metrology & Inspection 13% Other 6%
External Use 14
UCT Target WFE Markets
2016 WFE Estimate: $33B
Source: Gartner 2016 and UCT estimates.
Addresses
55%
- f WFE Market
Thermal & Implant 5%
Deposition 25%
Removal/Etch 25%
Lithography 26%
Metrology & Inspection 13% Other 6%
External Use
Total WFE Market Opportunity
Deposition & Etch Outpace Semi Market
2016 WFE Estimate: $33B
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 25% Removal/Etch 25%
Lithography 26%
Metrology & Inspection 13% Other 6%
15
Source: Gartner 2015 and UCT estimates
External Use 16
Growth Strategy
Increasing UCT Content on Platforms
Broaden Critical Process Capabilities Strategic Investments Expand Customer Base Deeper Engagement with Existing Customers
Frames Machining Plastics Prototype Machining Machining Metals
External Use 17
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
External Use 18
Semi Industry Consolidation
54% 63% 63% TOP 10
CHIP COMPANIES
TOP 5
WFE COMPANIES
68%
2010 2015 2010 2015
Source: Company Financials, SIA, Gartner 2015 and UCT estimates
- 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
External Use 19
Supply Chain Consolidation Opportunity
30% TOP 10
SUPPLIERS to WFE
35%
2010 2015
Source: Company financials, UCT estimates
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%
(in $ millions) Q2'15 Q3'15* Q4’15 Q1’16 Sales $117.5 $122.8 $103.4 $112.2 Gross Profit $18.8 $18.9 $13.3 $14.6 Gross Profit % 16.0% 15.4% 12.9% 13.0% Operating Income/(Loss) $4.8 $5.1 ($0.5) $0.9 Operating Income/(Loss) % 4.1% 4.1% (0.5%) 0.8% Cash $76.6 $59.8 $50.1 $45.5 Inventory $64.6 $75.6 $72.7 $82.0 Accounts Receivable $57.5 $57.5 $59.1 $66.7
External Use 21
Select Financial Data
Pro forma financials adding back amortization. * Note: Q3'15 represents the first (partial) quarter of combined operations between UCT and Miconex. All prior quarters represent UCT operating results only
- 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
External Use 22
Compelling UCT Opportunity
Winning Strategy Strong Gross Margins Improving Profitability Solid Cash Generation
Ultra Clean Technology Investor Presentation Jefferies Technology Conference May 11, 2016