2. 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 our 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.
Management uses non-GAAP net income and non-GAAP net income per diluted share 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.
2
Non-GAAP
3. Q4’16 Revenue Guidance Update: approximately $173M vs. $146M - $151M
3 Main Drivers for 2017
– 2017 WFE spending to increase 6% by 3D NAND & node transitions in 10nm Logic & 1x DRAM
– Our primary customers are concentrated in Deposition & Etch; fastest growing areas of WFE
– High OEM factory capacity utilization is driving a strong push for expanded outsourcing
• Share gain opportunities for the strongest suppliers with the broadest capabilities
• Ability to manufacture major modules across the customer’s entire tool is fueling strong growth
3
UCT Highlights
Leading outsourcing manufacturer
for the semiconductor capital equipment industry
Source: Gartner Oct 2016, SEMI WSEMS and UCT estimates
7. 7
Winning Strategy
Primary Focus on Semiconductors
Broaden Critical
Process Capabilities
Make Strategic
Investments
Increase UCT
Content on
Platforms
Deepen Engagement
with Existing Customers
& Add New Customers
8. GAS
FOUNDING
CAPABILITY
8
Expanding Critical Capabilities to Capture New Opportunities
Chemical Delivery Sub-Systems
Complete Assemblies
LIQUID
DELIVERY
ASSEMBLY
INTEGRATION
& TEST
Manufactured
Components
FRAMES PROTOTYPE
MACHINING
MACHINING
METALS
PLASTIC
MODULES
SHEET METAL
FORMING
THERMAL
PRODUCTS
9. 9
UCT Expert Outsourcing Partner
MANUFACTURING
INTEGRATION & TEST
PROTOTYPING/
DEVELOPMENT
MANUFACTURING
ENGINEERING
SUPPLY CHAIN MANAGEMENT
Design for manufacturability (DFM)
Partnering with customers for new product requirements
Network of global, strategic suppliers
Comprehensive new product introduction process
Sub-system through full tool integration
10. 10
Now Addressing Major Modules in Semiconductor Equipment
Wafer transfer: 10 – 20% 15 – 30%
Factory Interface
Vacuum Transfer
Process Chamber: 55 – 70% 50 – 75%
Gas Panel: 15 – 20% 0 – 10%
TYPICAL CVD & ETCH TOOL COST
OTHER PROCESS
TOOL TYPES
Source: UCT estimates.
11. 11
UCT Strong Growth in Semiconductor Equipment
Strategy to focus on semiconductor
successful
• Forecasting >15% revenue increase in 2016
– New module wins
– Strong Etch & CVD markets
• Semi revenue currently represents >90%
• In addition to strong gas panel core business,
new modules driving further growth
Non-semi now dominated by Display
• Resurgence in display due to OLED and going
forward Gen 10+
2012
2013
2014
2015
2016(E)
$345
$390
$423 $433
$510
(in $M)
12. ($M) Q1’16 Q2’16 Q3’16
Revenue $112.2 $129.8 $146.2
Gross Margin 13.0% 14.7% 16.1%
GAAP Net Income ($3.2) $0.7 $2.6
GAAP Basic & Diluted EPS ($.10) $0.02 $0.08
Non-GAAP* Net Income ($0.0) $3.2 $5.7
Non-GAAP* Diluted EPS ($0.0) $0.10 $0.17
Cash $45.5 $44.1 $47.3
12
Select 2016 YTD Financial Data
*Q3 2016 Non-GAAP excludes: (i) pre-tax charges of $1.4 million for intangible assets amortization costs, $925,000 for executive transition costs, and a favorable $105,000 for the release
of a previously accrued expense related to the closure of one of our facilities, offset partially by a corresponding increase in tax expense of approximately $0.6M; and (ii) $1.4 million of
income tax expense related to income tax valuation allowances
14. • Outperforming a growing Semiconductor WFE market
• Rapidly expanding opportunities in customer’s major modules
• Delivering what customers need (OTD, quality, cost)
• Industry trends reinforce leading position as potential supply
chain consolidator
• Key partner to top customers
14
Compelling UCT Opportunity
Winning
Strategy
Strong
Margins
Improving
Profitability
Solid Cash
Generation
16. 16
Reconciliation: GAAP Net Income to Non-GAAP Net Income
(1) Amortization of intangible assets related to the Company's acquisitions of AIT, Marchi and Miconex
(2) Represents expense for termination benefits paid to former executives of the Company
(3) Adjustment to previous restructuring reserve related to the abandonment of one of the Company's facilities
(4) Costs incurred related to the acquisition of Marchi and Miconex
(5) Tax effect on amortization of intangible assets, executive transition costs, restructuring charges, and acquisition costs based on the non-GAAP tax rate
(6) The Company's GAAP tax expense is substantially 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
(in thousands)
Three months ended:
Sept. 25, 2015
Three months ended:
Mar 25, 2016
Three months ended:
June 24, 2016
Three months ended:
Sept. 23, 2016
Reported net income on a GAAP basis $1,676 $(3,239) $723 $2,614
Amortization of intangible assets (1) $1,550 $1,440 $1,440 $1,438
Executive transition costs (2) - - - $925
Restructuring charges (3) - $177 $70 $(105)
Acquisition costs (4) $460 - - -
Income tax effect of non-GAAP adjustments (5) $(563) $(385) $(406) $(574)
Income tax effect of valuation allowance (6) - $1,876 $1,384 $1,391
Non-GAAP net income $3,123 $(131) $3,211 $5,689
17. 17
Reconciliation: GAAP Income from Operations to Non-GAAP
Income from Operations
(1) Amortization of intangible assets related to the Company's acquisitions of AIT, Marchi and Miconex
(2) Represents expense for termination benefits paid to former executives of the Company
(3) Adjustment to previous restructuring reserve related to the abandonment of one of the Company's facilities
(4) Costs incurred related to the acquisition of Marchi and Miconex
(in thousands)
Three months ended:
Sept. 25, 2015
Three months ended:
Mar 25, 2016
Three months ended:
June 24, 2016
Three months ended:
Sept. 23, 2016
Reported income from operations on a GAAP basis $3,079 $(698) $3,719 $6,700
Amortization of intangible assets (1) $1,550 $1,440 $1,440 $1,438
Executive transition costs (2) - - - $925
Restructuring charges (3) - $177 $70 $(105)
Acquisition costs (4) $460 - - -
Non-GAAP income from operations $5,089 $919 $5,229 $8,958
18. 18
Reconciliation: GAAP Earnings Per Diluted Share to Non-
GAAP Earnings Per Diluted Share
(1) Amortization of intangible assets related to the Company's acquisitions of AIT, Marchi and Miconex
(2) Represents expense for termination benefits paid to former executives of the Company
(3) Adjustment to previous restructuring reserve related to the abandonment of one of the Company's facilities
(4) Costs incurred related to the acquisition of Marchi and Miconex
(5) Tax effect on amortization of intangible assets, executive transition costs, restructuring charges, and acquisition costs based on the non-GAAP tax rate
(6) The Company's GAAP tax expense is substantially 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
Three months ended:
Sept. 25, 2015
Three months ended:
March 25, 2016
Three months ended:
June 24, 2016
Three months ended:
Sept. 23, 2016
Reported net income on a GAAP basis $0.05 $(0.10) $0.02 $0.08
Amortization of intangible assets (1) $0.05 $0.04 $0.05 $0.04
Executive transition costs (2) - - - $0.03
Restructuring charges (3) - $0.01 $0.00 $0.00
Acquisition costs (4) $0.01 - - -
Income tax effect of non-GAAP adjustments (5) $(0.01) $(0.01) $(0.01) $(0.02)
Income tax effect of valuation allowance (6) - $0.06 $0.04 $0.04
Non-GAAP net income $0.10 $(0.00) $0.10 $0.17
Weighted average number of diluted shares (k) 32,155 32,309 32,792 33,100
