EX-99.1 2 a11-29114_1ex99d1.htm EX-99.1

Exhibit 99.1

| November 2011

| Veeco Snapshot Dramatic growth driven by LED industry leadership Compelling new products with exceptional product and technology roadmap Rapidly gaining share in high growth backlighting and general illumination market Substantial growth opportunities in adjacent LED segments, power electronics, CPV solar and emerging Data Storage technologies Global footprint with sales, service and support close to customers Strong gross margins with significant operating leverage and variable cost model to drive profits and cash generation 9M 2011 Revenue $788M Mix by Business DATA STORAGE LED & SOLAR Revenue in ($ millions) ~$1.0 billion

| Veeco’s Worldwide Industry-Leading Customers

| Q3 2011 Financial Highlights

| Q3 2011 Revenue and Profit In-Line with Guidance *See reconciliation to GAAP at end of presentation $ Millions Revenue increased 1% from Q2 ‘11 but declined 3% from Q3 ’10 GAAP EPS was $1.31 and non-GAAP EPS was $1.33; at high end of guidance range Gross margin was 47%, in line with guidance Non-GAAP EPS

| Q3 2011 Business Highlights LED & Solar: MaxBright™ widely accepted by tier one customers around the world – represented nearly half of MOCVD revenue China Training Center has trained >200 engineers since May opening Taiwan Tech Center fully staffed and collaborating with customers on process development Data Storage: HDD roadmap is placing more emphasis on improving yield and reducing costs We are engaged in customer programs utilizing Veeco’s new CVD, PVD and DLC technologies

| Q3 2011 Revenue & EBITA Performance by Segment Data Storage $34M Down 25% sequentially and flat versus 2010 Total Revenue: $268M LED & Solar $234M Up 7% sequentially but down 4% from Q3’10 MOCVD at $221M ($M) Q3 ‘11 Q3 ’10 Adj EBITA $72.8 $97.9 ($M) Q3 ‘11 Q3 ‘10 Adj EBITA $7.9 $9.2 See reconciliation to GAAP at end of presentation

| Q3 2011 Bookings Performance by Segment Data Storage $21M Down 44% sequentially and 39% year-over-year Total Bookings: $133M LED & Solar $112M Down 59% sequentially and 54% year-over-year MOCVD $103M & MBE $9M Book to Bill = .5 to 1; Backlog $389M

| Q3 2011 Bookings Were Weak Across the Board Slower than expected growth in worldwide LED TV sales LED factory utilization rates in Asia remain low (50-70%) Decreased business activity in China resulting from credit tightening and funding availability Data Storage customers delayed capex plans due to pending consolidations and weak PC sales Negative global macro-economic data points caused customers to slow or cut their capacity expansion plans We currently expect that MOCVD orders will remain depressed for a few quarters

| Veeco’s Strong Balance Sheet 09/30/2011 06/30/2011 Cash & Short-term Investments* $448.9 $632.7 Accounts Receivable 115.2 128.0 Inventory 127.5 113.3 Fixed Assets, Net 76.2 62.4 Total Assets 934.2 1,120.4 Long-term Debt (including current portion) 2.7 2.8 Equity 735.3 848.8 * Includes restricted cash of $22.9M at 9/30/11 and $54.5M at 6/30/11 ($ millions) Major uses of cash included: Purchase of $154M in stock at an average price of $38.63... completed total $200M Board authorized stock purchase plan $31M contractual settlements for CIGS Solar business closure Accounts receivable decreased to $115M (DSO = 39) Inventory increased by $14M to $128M - 4.5 turns Balance Sheet

| 2011 Performance: Achieve $1B Revenue on High-End of Q4 Guidance Note: Guidance is for Veeco’s Continuing Operations See reconciliation to GAAP at end of presentation Q4 2011 Full Year 2011 Revenue $175 - $215M $963 – $1,003M Gross Margins 44-45% 48-49% Operating Spending $49-$51M $193-$195M Adjusted EBITA 17-22% 29-30% GAAP EPS $0.46-$0.78 $4.49-$4.79 Non-GAAP EPS $0.54-$0.86 $4.81-$5.11

| LED Update

| Positive LED Data Points TVs requiring higher-spec LEDs cause rush orders in September LED light bulbs sales in Japan reached 60% in Q3’11 (revenue shipment based) Continued solid growth in US & Europe LED lighting demand with falling ASP China expected to roll-out LED product subsidy programs soon LEDs in Millions of Units LED Lighting Inflection Point in 2012/13 Source: Strategies Unlimited and Piper Jaffray Research - 100,000 200,000 300,000 400,000 500,000 600,000 2007A 2008A 2009A 2010A 2011E 2012E 2013E 2014E 2015E Units (M) Handsets Monitors Notebooks LED TVs Automotive General Lighting Other Supply

| LEDs “Pay back” in Electricity Costs Today Source: JP Morgan Company Reports and Estimates

| Incandescent Light Bulb Phase Outs Occurring Now Source: LEDinside, PiperJaffray 10/2011, Morgan Stanley 9/14/2011 Global Phase Out of Incandescent Bulbs, Combined with Declining LED Prices Will Trigger Next Phase of LED Lighting Adoption Switzerland EU Australia United States Ireland Brazil Phillipines UK Japan Canada Taiwan India China South Korea Malaysia 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 100W 75W 60W 40W 25W 100W 75W 60W 40W 100W+ 60W+ 15W+

| China Update: Short-Term Challenges Do Not Dampen Long-Term Opportunity MOCVD demands in China affected by Facility readiness issues Credit market tightening Lack of qualified engineers China 12th 5-Year Plan (2011 to 2015) NDRC considering offering direct subsidies for LED lighting to consumer in 2011 Develop innovative applications for LEDs (e.g. medical, agricultural & communications applications) Goal to increase output value of LED industry value from CNY 120B to CNY500B 33% China’s LED Industry Output Value (CNY B) 12th 5-Year Plan to drive LED lighting adoption in China to 20% 2010 2011 2012 2013 2014 2015 120 500

| South Korea to Accelerate LED Lighting Adoption: “20-60 Plan” 2006: LED Lighting 15/30 Dissemination Project 2.5% (public buildings 5.0%) 30% (public buildings 60%) 60% (public buildings 100%) 2008: LED Industry Development Strategy June 2011: Stimulating Green LED Lighting Popularization Plan Source: LEDinside, Daiwa 6/9/2011, Displaybank 6/11/2011 Korean government could spend $1B 2011-2020 to reach target Long-term growth driver for LED lighting All Korean customers have MaxBright Veeco well positioned in Korea for further gains in next capex cycle LED Lighting Penetration Rate Roadmap 2010 2015 2020

| Continued LED lighting growth momentum in Japan Further boost in LED light bulb demand is expected from incandescent ban starting from 2012 Japan: LED Lighting Adoption Accelerating LED light bulb sales reached ~60% in 3Q March earthquake accelerated sales due to restrictions on electricity consumption LED light bulb sales have surpassed incandescent bulbs in Japan Rapid price drop of LED light bulbs Price dropped to JPY1,600-1,700 (USD20-22) by June from JPY2,000 (USD26) in 1H 2011 Korean and Taiwanese LED suppliers are expected to benefit from increased Japan demand Japan accounts for 50% of Lextar’s LED lighting sales Samsung and LG targeting the growing market Source: Digitimes 10/7/2011

| Veeco Customers Increasingly Focused on LED Lighting Opportunity 2010 Veeco MOCVD Shipments >330 Lighting Backlighting Backlighting & Lighting Others Backlighting Others Lighting Backlighting & Lighting 1Q-3Q’11 Veeco MOCVD Shipments >2801 MOCVD Shipments for Lighting Grew to over 50% in 1Q-3Q’11 1) Total shipments up to 2011 Q3 54% 11% 26% 9% 28% 43% 23% 6%

| Total MOCVD Reactor Shipments by Region – Industry Estimate 2009 228 Wall Street TAM for 2012 200-700+ systems – Huge Range of Estimates 2010 >820 2011F 700-900 Source: Analysts forecasts and Veeco estimates Korea, 33% China, 27% Europe, 2% US, 6% Japan, 4% Taiwan, 28% Korea, 7% China, 63% Europe, 1% US, 5% Japan, 4% Taiwan, 20% Taiwan, 35% Korea, 42% Japan, 7% US, 2% China, 12% Europe, 2%

| MaxBright MOCVD System – Spectacular Market Acceptance Since Q1 Launch Orders received from top accounts across the globe Most productive tool on the market Well positioned for additional market share gains Lowest Cost of Ownership Highest throughput Highest capacity Highest footprint efficiency Highest capital efficiency

| Veeco: MOCVD Market Leader Source: IMS Research On a Revenue Basis, Veeco Gained 21% Market Share to Reach 71% in Q3’11 K465i Introduction MaxBright Introduction

| Closer to the Tipping Point For SSL Adoption... HB LED ASPs are Falling Faster than Expected Source: LEDinside, Deutsche Bank 7/5/2011, Jefferies 7/7/2011, Lazard 7/8/2011, HSBC 7/12/2011 High Power LED Price per Watt High power LED ASPs have dropped ~50% YoY Much faster than Haitz Law historical trend ~20% YoY Analysts expect: ~5-10% QoQ in CQ3-11 ~30% YoY in 2011 -50% YoY -20% YoY Declining LED prices will drive more adoption & accelerate SSL growth Veeco tool performance plays a key part in enabling cost reduction

| Data Storage Update

| Every day, more than 3,000,000 Terabytes of new information is created Source: Facebook People spend 500 billion minutes per month on Facebook More video uploaded in last 60 days than all 3 major US networks created in 60 years Mobile users make up 37% of the total Data, Data Everywhere Continues to Drive HDD Unit Growth

| Source: TrendFocus February 2011. Data Storage Continues Double Digit Growth Leading equipment supplier for thin film magnetic head manufacturing – clear technology leader Close customer relationships, aligned roadmaps Focused emerging applications, such as EAMR (Energy Assisted Magnetic Recording) Efficient organization profitable through industry cycles Key customers include all TFMH players: (Units in Millions) Projected Demand for HDD 2010 – 2015F 8.2% CAGR 2010 2011F 2012F 2013F 2014F 2015F 651 709 771 832 897 965

| Outlook LED & Solar: LED pricing declines will continue to stimulate demand for solid state lighting on a global basis We expect widespread adoption of LED lighting...first.. in commercial, municipal and industrial and then in residential Despite some level of cyclicality... overall estimate of 5,000 reactor TAM from 2011-2015 Veeco’s MOCVD market position is the best it has ever been Data Storage: Orders have been running at low levels throughout 2011 Anticipate pent-up demand for new equipment once M&A is finalized

| Wrap Up Well positioned for solid performance in 2012: Exceptional product pipeline Highly-variable operational model Strong balance sheet Proven ability to execute Expect to deliver double-digit EBITA performance next year

| Safe Harbor Statement 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, 2010 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. In addition, this presentation includes 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 10-K and 10-Q filings available on www.veeco.com. Note: All results presented herein are for Veeco’s “Continuing Operations” which exclude the Metrology business sold to Bruker Corporation on October 7, 2010 and the discontinued CIGS Solar Systems Business.

| Q3 and Nine Month 2011 Income Statement Condensed Consolidated Statements of Income (In thousands, except per share data) (Unaudited) Three months ended Nine months ended September 30, September 30, 2011 2010 2011 2010 Net sales $ 267,959 $ 277,094 $ 787,450 $ 631,130 Cost of sales 143,025 139,711 396,204 336,828 Gross profit 124,934 137,383 391,246 294,302 Operating expenses (income): Selling, general and administrative 23,569 23,303 73,966 59,326 Research and development 26,404 15,250 69,927 39,121 Amortization 1,277 928 3,519 2,785 Restructuring - - - (179) Other, net (199) (267) (227) 184 Total operating expenses 51,051 39,214 147,185 101,237 Operating income 73,883 98,169 244,061 193,065 Interest (income) expense, net (244) 1,637 1,141 5,182 Loss on extinguishment of debt - - 3,349 - Income from continuing operations before income taxes 74,127 96,532 239,571 187,883 Income tax provision 21,510 2,845 72,657 14,130 Income from continuing operations 52,617 93,687 166,914 173,753 Discontinued operations: Loss from discontinued operations before income taxes (23,839) (10,831) (91,574) (12,815) Income tax benefit (7,085) (3,307) (32,371) (3,662) Loss from discontinued operations (16,754) (7,524) (59,203) (9,153) Net income $ 35,863 $ 86,163 $ 107,711 $ 164,600 Income (loss) per common share: Basic: Continuing operations $ 1.34 $ 2.35 $ 4.16 $ 4.40 Discontinued operations (0.43) (0.19) (1.48) (0.23) Income $ 0.91 $ 2.16 $ 2.68 $ 4.17 Diluted: Continuing operations $ 1.31 $ 2.22 $ 3.98 $ 4.12 Discontinued operations (0.41) (0.18) (1.41) (0.21) Income $ 0.90 $ 2.04 $ 2.57 $ 3.91 Weighted average shares outstanding: Basic 39,335 39,946 40,132 39,508 Diluted 40,069 42,258 41,941 42,175

| Balance Sheets Condensed Consolidated Balance Sheets (In thousands) September 30, December 31, 2011 2010 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 213,236 $ 245,132 Short-term investments 212,727 394,180 Restricted cash 22,901 76,115 Accounts receivable, net 115,168 150,528 Inventories, net 127,518 108,487 Prepaid expenses and other current assets 60,107 34,328 Assets held for sale 2,341 - Deferred income taxes, current 6,975 13,803 Total current assets 760,973 1,022,573 Property, plant and equipment, net 76,232 42,320 Goodwill 56,271 52,003 Deferred income taxes 2,998 9,403 Other assets, net 37,749 21,735 Total assets $ 934,223 $ 1,148,034 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 44,784 $ 32,220 Accrued expenses and other current liabilities 135,003 183,010 Deferred profit 5,911 4,109 Income taxes payable 4,446 56,369 Liabilities of discontinued segment held for sale 5,359 5,359 Current portion of long-term debt 243 101,367 Total current liabilities 195,746 382,434 Long-term debt 2,470 2,654 Other liabilities 755 434 Total liabilities 198,971 385,522 Equity 735,252 762,512 Total liabilities and equity $ 934,223 $ 1,148,034

| Q3 and Nine Month 2011 Reconciliation of GAAP to Non-GAAP Results Reconciliation of GAAP to non-GAAP results (In thousands, except per share data) (Unaudited) Three months ended Nine months ended September 30, September 30, 2011 2010 2011 2010 Adjusted EBITA Operating income $ 73,883 $ 98,169 $ 244,061 $ 193,065 Adjustments: Amortization 1,277 928 3,519 2,785 Equity-based compensation 2,951 2,356 9,472 6,222 Restructuring - - - (179) (1) Earnings from continuing operations before interest, income taxes and amortization excluding certain items ("Adjusted EBITA") $ 78,111 $ 101,453 $ 257,052 $ 201,893 Non-GAAP Net Income Net income from continuing operations (GAAP basis) $ 52,617 $ 93,687 $ 166,914 $ 173,753 Non-GAAP adjustments: Amortization 1,277 928 3,519 2,785 Equity-based compensation 2,951 2,356 9,472 6,222 Restructuring - - - (179) (1) Loss on extinguishment of debt - - 3,349 - Non-cash portion of interest expense - 769 (2) 1,260 (2) 2,271 (2) Income tax effect of non-GAAP adjustments (3,498) (3) (32,360) (3) (6,441) (3) (55,514) (3) Non-GAAP Net Income $ 53,347 $ 65,380 $ 178,073 $ 129,338 Non-GAAP earnings per diluted share excluding certain items ("Non-GAAP EPS") $ 1.33 $ 1.55 $ 4.25 $ 3.07 Diluted weighted average shares outstanding 40,069 42,258 41,941 42,175 (1) During the first quarter of 2010, we recorded a restructuring credit of $0.2 million associated with a change in estimate. (2) Adjustment to exclude non-cash interest expense on convertible subordinated notes. (3) By the end of 2010, the Company had fully utilized all prior NOL and tax credit carryfowards. As a result, beginning in 2011, the Company utilized the with and without method, at a 30.76% effective rate forecasted for the full year, to determine the income tax effect of non-GAAP adjustments. During the second quarter of 2010 we provided for income taxes at a 35% statutory rate to determine the income tax effect of non-GAAP adjustments.

| Q4 Guidance Reconciliation Reconciliation of GAAP to non-GAAP results (In thousands, except per share data) (Unaudited) Guidance for the three months ending December 31, 2011 LOW HIGH Adjusted EBITA Operating income $ 25,535 $ 43,535 Adjustments: Amortization 1,237 1,237 Equity-based compensation 3,410 3,410 Earnings from continuing operations before interest, income taxes and amortization excluding certain items ("Adjusted EBITA") $ 30,182 $ 48,182 Non-GAAP Net Income Net income from continuing operations (GAAP basis) $ 17,988 $ 30,526 Non-GAAP adjustments: Amortization 1,237 1,237 Equity-based compensation 3,410 3,410 Income tax effect of non-GAAP adjustments (1,538) (1) (1,613) (1) Non-GAAP Net Income $ 21,097 $ 33,560 Non-GAAP earnings per diluted share excluding certain items ("Non-GAAP EPS") $ 0.54 $ 0.86 Diluted weighted average shares outstanding 39,000 39,000 (1) By the end of 2010, the Company had fully utilized all prior NOL and tax credit carryfowards. As a result, beginning in 2011, the Company utilized the with and without method, at a 30.76% effective rate forecasted for the full year, to determine the income tax effect of non-GAAP adjustments.

| Full Year 2011 Guidance Reconciliation Reconciliation of GAAP to non-GAAP results (In thousands, except per share data) (Unaudited) Guidance for the year ending December 31, 2011 LOW HIGH Adjusted EBITA Operating income $ 264,986 $ 282,986 Adjustments: Amortization 4,756 4,756 Loss on extinguishment of debt 3,349 3,349 Non-cash portion of interest expense 1,260 1,260 Equity-based compensation 12,881 12,881 Earnings from continuing operations before interest, income taxes and amortization excluding certain items ("Adjusted EBITA") $ 287,232 $ 305,232 Non-GAAP Net Income Net income from continuing operations (GAAP basis) $ 185,774 $ 198,374 Non-GAAP adjustments: Amortization 4,756 4,756 Equity-based compensation 12,881 12,881 Loss on extinguishment of debt 3,349 3,349 Non-cash portion of interest expense 1,260 1,260 Income tax effect of non-GAAP adjustments (8,860) (1) (8,996) (1) Non-GAAP Net Income $ 199,160 $ 211,624 Non-GAAP earnings per diluted share excluding certain items ("Non-GAAP EPS") $ 4.81 $ 5.11 Diluted weighted average shares outstanding 41,400 41,400 (1) By the end of 2010, the Company had fully utilized all prior NOL and tax credit carryfowards. As a result, beginning in 2011, the Company utilized the with and without method, at a 30.76% effective rate forecasted for the full year, to determine the income tax effect of non-GAAP adjustments.

| Segment Data Segment Bookings, Revenues, and Reconciliation of Operating Income (Loss) to Adjusted EBITA (Loss) (In thousands) (Unaudited) Three months ended Nine months ended September 30, September 30, 2011 2010 2011 2010 LED & Solar Bookings $ 111,898 $ 243,207 $ 583,424 $ 715,232 Revenues $ 233,865 $ 242,613 $ 667,697 $ 537,662 Operating income $ 70,899 $ 97,093 $ 227,917 $ 190,270 Amortization 924 487 2,364 1,461 Equity-based compensation 992 324 2,567 939 Adjusted EBITA $ 72,815 $ 97,904 $ 232,848 $ 192,670 Data Storage Bookings $ 21,188 $ 34,972 $ 91,350 $ 111,369 Revenues $ 34,094 $ 34,481 $ 119,753 $ 93,468 Operating income $ 7,185 $ 8,570 $ 31,087 $ 19,631 Amortization 353 383 1,072 1,149 Equity-based compensation 339 258 999 781 Restructuring - - - (179) Adjusted EBITA $ 7,877 $ 9,211 $ 33,158 $ 21,382 Unallocated Corporate Operating loss $ (4,201) $ (7,494) $ (14,943) $ (16,836) Amortization - 58 83 175 Equity-based compensation 1,620 1,774 5,906 4,502 Adjusted loss $ (2,581) $ (5,662) $ (8,954) $ (12,159) Total Bookings $ 133,086 $ 278,179 $ 674,774 $ 826,601 Revenues $ 267,959 $ 277,094 $ 787,450 $ 631,130 Operating income $ 73,883 $ 98,169 $ 244,061 $ 193,065 Amortization 1,277 928 3,519 2,785 Equity-based compensation 2,951 2,356 9,472 6,222 Restructuring - - - (179) Adjusted EBITA $ 78,111 $ 101,453 $ 257,052 $ 201,893

| Income Statement Annual Periods – Reclassification for CIGS Discontinuation For the years ended December 31, (in thousands, except per share data) 2010 2009 2008 (unaudited) Net sales As originally reported $ 933,231 $ 282,412 $ 314,935 Adjustment for discontinued operations (2,339) (150) (12,868) As adjusted $ 930,892 $ 282,262 $ 302,067 Gross profit As originally reported $ 443,825 $ 111,235 $ 123,271 Adjustment for discontinued operations 5,661 3,024 (4,744) As adjusted $ 449,486 $ 114,259 $ 118,527 Operating expenses As originally reported $ 166,250 $ 115,967 $ 169,411 Adjustment for discontinued operations (20,018) (9,339) (6,829) As adjusted $ 146,232 $ 106,628 $ 162,582 Operating income (loss) As originally reported $ 277,575 $ (4,732) $ (46,140) Adjustment for discontinued operations 25,679 12,363 2,085 As adjusted $ 303,254 $ 7,631 $ (44,055) Net income (loss) from continuing operations, attributable to Veeco As originally reported $ 260,531 $ (14,164) $ (50,603) Adjustment for discontinued operations 16,645 12,452 2,085 As adjusted $ 277,176 $ (1,712) $ (48,518) Basic income (loss) per share from continuing operations, attributable to Veeco As originally reported $ 6.60 $ (0.43) $ (1.62) Adjustment for discontinued operations 0.42 0.38 0.07 As adjusted $ 7.02 $ (0.05) $ (1.55) Diluted income (loss) per share from continuing operations, attributable to Veeco As originally reported $ 6.13 $ (0.43) $ (1.62) Adjustment for discontinued operations 0.39 0.38 0.07 As adjusted $ 6.52 $ (0.05) $ (1.55) Weighted average shares outstanding Basic 39,499 32,628 31,347 Diluted 42,514 32,628 31,347

| Income Statement Quarterly Periods – Reclassification for CIGS Discontinuation For the three months ended (in thousands, except per share data) June 30, 2011 March 31, 2011 December 31, 2010 September 30, 2010 June 30, 2010 March 31, 2010 (unaudited) Net sales As originally reported $ 264,815 $ 254,676 $ 299,998 $ 277,094 $ 221,389 $ 134,750 Adjustment for discontinued operations - - (236) - - (2,103) As adjusted $ 264,815 $ 254,676 $ 299,762 $ 277,094 $ 221,389 $ 132,647 Gross profit As originally reported $ 100,068 $ 129,332 $ 152,802 $ 135,482 $ 98,800 $ 56,740 Adjustment for discontinued operations 35,281 1,631 2,381 1,901 1,483 (104) As adjusted $ 135,349 $ 130,963 $ 155,183 $ 137,383 $ 100,283 $ 56,636 Operating expenses As originally reported $ 76,399 $ 49,663 $ 51,930 $ 43,833 $ 38,920 $ 31,565 Adjustment for discontinued operations (24,020) (5,908) (6,936) (4,619) (4,424) (4,038) As adjusted $ 52,379 $ 43,755 $ 44,994 $ 39,214 $ 34,496 $ 27,527 Operating income As originally reported $ 23,669 $ 79,669 $ 100,872 $ 91,649 $ 59,880 $ 25,175 Adjustment for discontinued operations 59,301 7,539 9,317 6,520 5,907 3,934 As adjusted $ 82,970 $ 87,208 $ 110,189 $ 98,169 $ 65,787 $ 29,109 Net income from continuing operations, attributable to Veeco As originally reported $ 19,212 $ 53,083 $ 96,672 $ 91,104 $ 49,930 $ 22,825 Adjustment for discontinued operations 37,106 4,896 6,750 2,583 3,980 3,331 As adjusted $ 56,318 $ 57,979 $ 103,422 $ 93,687 $ 53,910 $ 26,156 Basic income per share from continuing operations, attributable to Veeco As originally reported $ 0.47 $ 1.33 $ 2.45 $ 2.28 $ 1.26 $ 0.59 Adjustment for discontinued operations 0.90 0.13 0.17 0.07 0.10 0.08 As adjusted $ 1.37 $ 1.46 $ 2.62 $ 2.35 $ 1.36 $ 0.67 Diluted income per share from continuing operations, attributable to Veeco As originally reported $ 0.45 $ 1.25 $ 2.30 $ 2.16 $ 1.15 $ 0.54 Adjustment for discontinued operations 0.86 0.11 0.16 0.06 0.09 0.08 As adjusted $ 1.31 $ 1.36 $ 2.46 $ 2.22 $ 1.24 $ 0.62 Weighted average shares outstanding Basic 40,998 39,842 39,453 39,946 39,761 38,784 Diluted 43,002 42,531 41,972 42,258 43,506 42,269

| Adjusted EBITA and Non-GAAP Reporting – Reclassification for CIGS Discontinuation (in thousands) June 30, 2011 March 31, 2011 December 31, 2010 September 30, 2010 June 30, 2010 March 31, 2010 LED & Solar Adjusted EBITA As originally reported 70,964 $ 73,963 $ 98,520 $ 91,785 $ 57,397 $ 28,358 $ Adjustment 8,089 7,014 9,122 6,119 5,451 3,560 As adjusted 79,053 $ 80,977 $ 107,642 $ 97,904 $ 62,848 $ 31,918 $ Data Storage Adjusted EBITA As originally reported 13,050 $ 12,231 $ 12,675 $ 9,377 $ 9,605 $ 2,877 $ Adjustment - - (147) (166) (161) (150) As adjusted 13,050 $ 12,231 $ 12,528 $ 9,211 $ 9,444 $ 2,727 $ Unallocated Corporate Loss As originally reported (4,082) $ (2,292) $ (6,515) $ (5,662) $ (3,361) $ (3,136) $ Adjustment - - - - - - As adjusted (4,082) $ (2,292) $ (6,515) $ (5,662) $ (3,361) $ (3,136) $ Total Veeco Adjusted EBITA As originally reported 79,932 $ 83,902 $ 104,680 $ 95,500 $ 63,641 $ 28,099 $ Adjustment for discontinued operations 8,089 7,014 8,975 5,953 5,290 3,410 As adjusted 88,021 $ 90,916 $ 113,655 $ 101,453 $ 68,931 $ 31,509 $ Total Veeco Non-GAAP Net Income As originally reported 57,635 $ 56,551 $ 67,869 $ 61,563 $ 40,715 $ 17,590 $ Adjustment for discontinued operations 5,777 4,758 5,833 3,870 3,439 2,214 As adjusted 63,412 $ 61,309 $ 73,702 $ 65,433 $ 44,154 $ 19,804 $ Total Veeco Non-GAAP EPS As originally reported 1.34 $ 1.33 $ 1.62 $ 1.46 $ 0.94 $ 0.42 $ Adjustment for discontinued operations 0.14 $ 0.11 $ 0.14 $ 0.09 $ 0.08 $ 0.05 $ As adjusted 1.48 $ 1.44 $ 1.76 $ 1.55 $ 1.02 $ 0.47 $ Weighted average shares outstanding Diluted 43,002 42,531 41,972 42,258 43,506 42,269 For the three months ended (unaudited) Earnings (loss) from continuing operations before interest, income taxes and amortization excluding certain items ("Adjusted EBITA") Non-GAAP Net Income and Earnings Per Share ("EPS")

| Reconciliation of GAAP to non-GAAP Results June 30, March 31, December 31, September 30, June 30, March 31, 2011 2011 2010 2010 2010 2010 Adjusted EBITA Operating income 82,970 $ 87,208 $ 110,189 $ 98,169 $ 65,787 $ 29,109 $ Adjustments: Amortization 1,334 908 919 928 929 928 Equity-based compensation 3,717 2,800 2,547 2,356 2,215 1,651 Restructuring - - - - - (179) 88,021 $ 90,916 $ 113,655 $ 101,453 $ 68,931 $ 31,509 $ Non-GAAP Net Income Net income from continuing operations (GAAP basis) 56,318 $ 57,979 $ 103,422 $ 93,687 $ 53,910 $ 26,156 $ Non-GAAP adjustments: Amortization 1,334 908 919 928 929 928 Equity-based compensation 3,717 2,800 2,547 2,356 2,215 1,651 Restructuring - - - - - (179) Loss on extinguishment of debt 3,045 304 - - - - Non-cash portion of interest expense 490 (1) 769 (1) 1,123 (1) 850 (1) 760 (1) 741 (1) Income tax effect of non-GAAP adjustments (1,492) (2) (1,451) (3) (34,309) (4) (32,388) (4) (13,660) (4) (9,493) (4) Non-GAAP Net Income 63,412 $ 61,309 $ 73,702 $ 65,433 $ 44,154 $ 19,804 $ Non-GAAP earnings per diluted share excluding certain items ("Non-GAAP EPS") 1.48 $ 1.44 $ 1.76 $ 1.55 $ 1.02 $ 0.47 $ Diluted weighted average shares outstanding 43,002 42,531 41,972 42,258 43,506 42,269 (4) During 2010 we provided for income taxes at a 35% statutory rate to determine the income tax effect of non-GAAP adjustments. (2) By the end of 2010, the Company had fully utilized all prior NOL and tax credit carryfowards. As a result, beginning in 2011, the Company utilized the with and without method, at a 32.17% effective rate forecasted for the full year, to determine the income tax effect of non-GAAP adjustments. (1) Adjustment to exclude non-cash interest expense on convertible subordinated notes. (3) By the end of 2010, the Company had fully utilized all prior NOL and tax credit carryfowards. As a result, beginning in 2011, the Company utilized the with and without method, at a 30.25% effective rate forecasted for the full year, to determine the income tax effect of non-GAAP adjustments. NOTE - 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 adjusted EBITA, which is the primary indicator 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 reports baseline performance and thus provides useful information. Earnings from continuing operations before interest, income taxes and amortization excluding certain items ("Adjusted EBITA") Three months ended (In thousands, except per share data) (Unaudited)