Investor Presentation February 2017 Safe Harbor This presentation - PowerPoint PPT Presentation

Investor Presentation February 2017

Safe Harbor This presentation contains, or may be deemed to contain, "forward-looking statements" (as defined in the US Private Securities Litigation Reform Act of 1995) which reflect our current views with respect to future events and financial performance. We use words such as "anticipates,", “projection”, “outlook”, “forecast”, "believes," "plan," "expect," "future,"' "intends," "may," "will," "estimates," "predicts," and similar expressions to identify these forward-looking statements. Forward looking statements included in this presentation include our expectations about achieving our longer-term revenue and profitability goals and with respect to our first quarter 2017 outlook. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, the Company’s actual results may differ materially from the results predicted or implied by these forward-looking statements. These risks, uncertainties and other factors also include, among others, those identified in "Risk Factors”, "Management's Discussion and Analysis of Financial Condition and Results of Operations'' and elsewhere in our annual report on Form 10-K for the year ended December 25, 2015 as filed with the Securities and Exchange Commission and subsequently filed quarterly reports on Form 10-Q. Additional information will also be set forth in our annual report on Form 10-K for the year ended December 30, 2016. Ultra Clean Holdings, Inc. undertakes no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise unless required by law. Non-GAAP 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

UCT Highlights Leading outsourcing manufacturer for the semiconductor capital equipment industry 3 Main Drivers for 2017 – 2017 WFE spending to increase on 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 Source: Gartner Oct 2016, SEMI WSEMS and UCT estimates 3

Wafer Fab Equipment Spending Reaching New Highs $36.0 $36.2 $34.0 6% $31.5 8% ($B) 2015 2016(F) 2017(F) 2018(F) Source: Gartner Jan 2017 4

Deposition & Etch Outperforming WFE Market 2016 WFE Estimate: $34.0B Thermal Other & Implant Metrology & 6% >80% Deposition 5% Inspection 12% 23% of UCT Semi Sales Lithography 27% Removal Total CapEx Dep & Etch 27% Spend CapEx Spend ~6% CAGR 9-10% CAGR 2013 - 2018 2013 - 2018 Source: Gartner Oct 2016, SEMI WSEMS and UCT estimates 5

Inflection:OEM Outsourcing Accelerating Dramatically UCT 5% For example: Flex, Celestica, Benchmark, etc. OEM Integration In-Sourcing Specialty Contract 44% Manufacturers OEM Component Suppliers 34% Source: UCT estimates as of Nov 2016. 6

Winning Strategy Primary Focus on Semiconductors Deepen Engagement with Existing Customers Broaden Critical & Add New Customers Process Capabilities Increase UCT Content on Make Strategic Platforms Investments 7

Expanding Critical Capabilities to Capture New Opportunities MACHINING SHEET METAL PROTOTYPE THERMAL PLASTIC FRAMES METALS FORMING MACHINING PRODUCTS MODULES Manufactured Components LIQUID GAS DELIVERY Chemical Delivery Sub-Systems FOUNDING ASSEMBLY CAPABILITY INTEGRATION & TEST Complete Assemblies 8

UCT Expert Outsourcing Partner SUPPLY CHAIN MANAGEMENT MANUFACTURING MANUFACTURING ENGINEERING  Design for manufacturability (DFM)  Partnering with customers for new product requirements  Network of global, strategic suppliers  Comprehensive new product introduction process PROTOTYPING/  Sub-system through full tool integration INTEGRATION & TEST DEVELOPMENT 9

Now Addressing Major Modules in Semiconductor Equipment OTHER PROCESS TYPICAL CVD & ETCH TOOL COST TOOL TYPES Wafer transfer: 10 – 20% 15 – 30% Factory Interface Vacuum Transfer Process Chamber: 55 – 70% 50 – 75% Gas Panel: 15 – 20% 0 – 10% Source: UCT estimates. 10 External Use

UCT Strong Growth in Semiconductor Equipment Strategy to focus on semiconductor successful $508 • 20% revenue increase in 2016 $423 $433 $390 – New module wins $345 – 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 (in $M) • Resurgence in display due to OLED and going 2012 forward Gen 10+ 2013 2014 2015 2016 11

Select 2016 YTD Financial Data Q1’16 Q2’16 Q3’16 Q4’16 ($M) Revenue $112.2 $129.8 $146.2 $174.5 Gross Margin 13.0% 14.7% 16.1% 17.0% GAAP Net Income ($3.2) $0.7 $2.6 $10.0 GAAP Basic & Diluted EPS ($.10) $0.02 $0.08 $0.30 Non-GAAP * Net Income ($0.0) $3.2 $5.7 $12.0 Non-GAAP * Diluted EPS ($0.0) $0.10 $0.17 $0.36 Cash $45.5 $44.1 $47.3 $52.5 * Non-GAAP results exclude intangible asset amortization and non-recurring expense items 12

Leveraging Our Model Revenue Range $145M $165M $185M Gross Margins 14% - 16% 15% - 17% 16% - 18% Operating Margins 4% - 6% 6% - 7% 8% - 10% (Non-GAAP*) * Excludes intangible amortization expense and non-recurring items. 13

Compelling UCT Opportunity • 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 Winning Strong Improving Solid Cash Strategy Margins Profitability Generation 14

Thank You

Reconciliation: GAAP Net Income to Non-GAAP Net Income Three months ended: Three months ended: Three months ended: Three months ended: Three months ended: (in thousands) Mar 25, 2016 June 24, 2016 Dec. 25, 2015 Sept. 23, 2016 Dec. 30, 2016 Reported net income on a GAAP basis $15,788 $(3,239) $723 $2,614 $9,953 Amortization of intangible assets (1) $2,170 $1,440 $1,440 $1,438 $1,439 Executive transition costs (2) $421 - - $925 - Restructuring charges (3) $245 $177 $70 $(105) $109 Acquisition costs (4) - - - - - Impairment of “Held for Sale” Assets (5) - - - - $666 Termination of Contractual Obligation (6) - - - - $438 Income tax effect of non-GAAP adjustments (7) $(794) $(385) $(406) $(574) $(549) Income tax effect of valuation allowance (8) $13,424 $1,876 $1,384 $1,391 $(49) Non-GAAP net income $(322) $(131) $3,211 $5,689 $12,007 (1) Amortization of intangible assets related to the Company's acquisitions of AIT, Marchi and Miconex (5) Impairment of assets classified as “held for sale” related to our 3D printing business in Singapore (2) Represents expense for termination benefits paid to former executives of the Company (6) Amount paid related to the termination of a long-term contractual obligation to our 3D printing business in Singapore (3) Adjustment to previous restructuring reserve related to the abandonment of one of the Company's facilities (7) Tax effect on amortization of intangible assets, executive transition costs, restructuring charges, acquisition costs, impairment charges, and buy-out costs based on the non-GAAP tax rate (4) Costs incurred related to the acquisition of Marchi and Miconex (8) 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 16