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 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. 2 External Use
UCT Highlights 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 3 External Use
From Design to Prototype to Production SUPPLY CHAIN MANAGEMENT MANUFACTURING MANUFACTURING ENGINEERING PROTOTYPING/ INTEGRATION & TEST DEVELOPMENT 4 External Use
From Design to Prototype to Production SUPPLY CHAIN MANAGEMENT MANUFACTURING MANUFACTURING ENGINEERING Broad expertise in multiple areas Complete outsourced design • Gas and liquid delivery • Mechanical and electrical assemblies PROTOTYPING/ INTEGRATION & TEST • Thermal management DEVELOPMENT Quick turn capabilities 5 External Use
From Design to Prototype to Production SUPPLY CHAIN MANAGEMENT MANUFACTURING MANUFACTURING ENGINEERING Design for manufacturability (DFM) Lower production costs Reduced cycle time Partner with customers to meet demanding new PROTOTYPING/ INTEGRATION & TEST DEVELOPMENT product requirements Continuous improvement in operational excellence 6 External Use
From Design to Prototype to Production SUPPLY CHAIN MANAGEMENT MANUFACTURING MANUFACTURING ENGINEERING Network of global, strategic partners Reduce customer overhead through UCT expertise in qualifying and managing complex supplier base Aggregated buying power PROTOTYPING/ INTEGRATION & TEST DEVELOPMENT Improved customer delivery time 7 External Use
From Design to Prototype to Production SUPPLY CHAIN MANAGEMENT MANUFACTURING MANUFACTURING ENGINEERING Comprehensive new product introduction process Simplify manufacturing process Reduce manufacturing costs Solve production challenges PROTOTYPING/ INTEGRATION & TEST DEVELOPMENT Vertically integrated 8 External Use
From Design to Prototype to Production SUPPLY CHAIN MANAGEMENT MANUFACTURING MANUFACTURING ENGINEERING Sub-system through full tool integration Electrical and mechanical assemblies Ultra-high purity gas systems Fluid delivery systems PROTOTYPING/ INTEGRATION & TEST DEVELOPMENT Final test and shipment direct to end users “Extended factory to top OEMs” 9 External Use
Semi Equipment Manufacturing Landscape UCT 5% Major Contract Manufacturers 11% OEM Integration In-Sourcing Other Contract 44% Manufacturers 6% OEM Component Suppliers 34% Source: UCT estimates. 10 External Use
Why Outsource? Provides variable cost model LOWER COST SCALABILITY Gain ability to quickly scale manufacturing Access to expertise in manufacturing OPERATIONAL FOCUS Ease of supply chain management SUPPLY CHAIN Achieve reduction of inventory, improved cash flow FINANCIAL FLEXIBILITY 11 External Use
Why We Win Track record of delivering highly complex Semi equipment and solutions COMPLEX DESIGNS Effectively manage variable volumes and dynamically changing designs SCALABILITY Leader in Semi equipment supply chain SUPPLY CHAIN Consistently deliver high quality precision products COST OF QUALITY Strong balance sheet and flexible financial model FINANCIAL STRENGTH 12 External Use
Total WFE Market Opportunity 2015 WFE Estimate: $32B Thermal Other & Implant Metrology & 6% 5% Inspection Deposition 12% 23% Lithography 27% Removal/Etch 27% Source: Gartner 2015 and UCT estimates 13 External Use
UCT Target WFE Markets 2015 WFE Estimate: $32B Thermal Other & Implant Metrology & Addresses 6% 5% Inspection Deposition 55% 12% 23% of WFE Market Lithography 27% Removal/Etch 27% Source: Gartner 2015 and UCT estimates. 14 External Use
Total WFE Market Opportunity Deposition & Etch Outpace Semi Market 2015 WFE Estimate: $32B Thermal Other Dep & Etch & Implant Metrology & 6% Deposition 5% Inspection >70% 12% 23% of UCT Semi Lithography Sales 27% Removal/Etch Total CapEx Dep & Etch 27% Spend CapEx Spend ~6% CAGR 9-10% CAGR 2013 - 2018 2013 - 2018 Source: Gartner 2015 and UCT estimates 15 External Use
Growth Strategy Increasing UCT Content on Platforms Deeper Engagement Broaden Critical with Existing Customers Process Capabilities Expand Strategic Customer Base Acquisitions 16 External Use
Growing Suite of Critical Process Capabilities Chemical Delivery Complete Manufactured Components Sub-Systems Assemblies Machining Machining Machining Machining Sheet Metal Sheet Metal GAS Frames Frames Gas Metals Metals Forming Forming Plastics Plastics Assembly Assembly Integration Integration & Test & Test Prototype Prototype Heaters Heaters 3D Printing 3D Printing Liquid Liquid Machining Machining 17 External Use
Semi Industry Consolidation TOP 10 TOP 5 CHIP COMPANIES WFE COMPANIES 54% 63% 63% 77% 2010 2015(F) 2010 2015(F) Source: Company Financials, SIA, Gartner 2015 and UCT estimates 18 External Use
Supply Chain Consolidation Opportunity TOP 10 SUPPLIERS to WFE 35% 30% 2010 2015(F) • 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 Source: Company financials, UCT estimates 19 External Use
UCT Business Model GROSS MARGIN 15% - 18% KEY DIFFERENTIATORS OPERATING MARGIN • Higher value capabilities 8% - 10% • Improved operational efficiencies • Low capital requirements Targeted OPERATING PROFIT DRIVERS • Revenue growth • Low operating expenses • Strategic acquisitions 20 External Use
Select Financial Data (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 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 21 External Use
Solid Cash Generation $30.0 $30.2 $27.3 $23.7 YE 2011 YE 2012 YE 2013 YE 2014 22 External Use
Compelling UCT Opportunity • 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 Winning Strong Gross Improving Solid Cash Strategy Margins Profitability Generation 23 External Use
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