Uct investor presentation october 2016

Fall 2016

Investor Presentation

Safe HarborThis 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.

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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 on pages 20-22.

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Global leader in design, engineering and manufacturing of critical modules, subsystems and turnkey solutions primarily for the semiconductor capital equipment industry.

• Q3’16 revenue of $146M, a quarter-over-quarter increase of 12.6%• Q3’16 GAAP diluted EPS of $0.08 and non-GAAP* diluted EPS of $0.17

• Continued recovery expected 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

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UCT Highlights

* 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

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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

MANUFACTURINGENGINEERING MANUFACTURING

INTEGRATION & TEST

SUPPLY CHAIN MANAGEMENT

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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

MANUFACTURINGENGINEERING



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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


MANUFACTURING

INTEGRATION & TEST



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Comprehensive new product introduction process− Simplify manufacturing process− Reduce manufacturing costs− Solve production challenges

Vertically integrated

MANUFACTURING

PROTOTYPING/ DEVELOPMENT INTEGRATION & TEST



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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 & TESTPROTOTYPING/ DEVELOPMENT

MANUFACTURINGMANUFACTURING

ENGINEERING


OEM Component Suppliers

34%

OEM Integration In-Sourcing

44%

UCT5% Major Contract

Manufacturers11%

Other Contract Manufacturers

6%

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Semi Equipment Manufacturing Landscape

Source: UCT estimates.

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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

UCT excels at meeting quality, cost and delivery for demanding semiconductor market

Total WFE Market OpportunityDeposition & Etch Outpace Semi Market

2016 WFE Estimate: $33B

Dep & Etch

>70%of UCT Semi

Sales

Dep & Etch Industry CapEx Spend 9-10% CAGR 2013 - 2018

Total Industry CapEx Spend~6% CAGR 2013 - 2018

Thermal & Implant

5% Deposition25%

Removal/Etch 25%

Lithography26%

Metrology & Inspection

13%

Other6%

15 Source: Gartner 2015 and UCT estimates not based on material non-public information

Frames Machining Plastics

Prototype Machining

MachiningMetals

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Growing Suite of Critical Process Capabilities

Manufactured Components Chemical Delivery Sub-Systems

Frames

Prototype Machining

MachiningMetals

Machining Plastics

Heaters

Sheet Metal Forming

3D Printing

Complete Assemblies

GasGASAssembly

Integration & Test

Liquid

AssemblyIntegration

& Test

Liquid

Sheet Metal Forming

Heaters 3D Printing

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Semi Industry Consolidation

54% 63% 63%

TOP 10CHIP COMPANIES

TOP 5WFE COMPANIES

68%

2010 2015 2010 2015

Source: Company Financials, SIA, Gartner 2015 and UCT estimates not based on material non-public information

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Supply Chain Consolidation Opportunity

30%

TOP 10SUPPLIERS to WFE

35%

2010 2015

Source: Company Financials, SIA, Gartner 2015 and UCT estimates not based on material non-public information

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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 MARGIN15% - 18%

Long-term Target

OPERATING MARGIN

8% - 10%

(in $ millions) Q3 15 Q2 16 Q3 16

Sales $122.8 $129.8 $146.2

Gross Profit $18.9 $19.0 $23.5

Gross Profit % 15.4% 14.7% 16.1%

GAAP Net Income $1.7 $0.7 $2.6

GAAP basic & diluted EPS $0.05 $0.02 $0.08

Non-GAAP* Net Income $3.1 $3.2 $5.7

Non-GAAP diluted EPS* $0.10 $0.10 $0.17

Cash $59.8 $44.1 $47.3

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Select 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

• 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

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Compelling UCT Opportunity

WinningStrategy

Strong GrossMargins

Improving Profitability

Solid Cash Generation

Thank You

(in thousands)Three months ended:

Sept. 25, 2015 June 24, 2016 Sept. 23, 2016

Reported net income on a GAAP basis $1,676 $723 $2,614

Amortization of intangible assets (1) $1,550 $1,440 $1,438

Executive transition costs (2) - - $925

Restructuring charges (3) - $70 $(105)

Acquisition costs (4) $460 - -

Income tax effect of non-GAAP adjustments (5) $(563) $(406) $(574)

Income tax effect of valuation allowance (6) - $1,384 $1,391

Non-GAAP net income $3,123 $3,211 $5,689

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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 June 24, 2016 Sept. 23, 2016

Reported income from operations on a GAAP basis $3,079 $3,719 $6,700

Amortization of intangible assets (1) $1,550 $1,440 $1,438

Executive transition costs (2) - - $925

Restructuring charges (3) - $70 $(105)

Acquisition costs (4) $460 - -

Non-GAAP income from operations $5,089 $5,229 $8,958

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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

Three months ended:

Sept. 25, 2015 June 24, 2016 Sept. 23, 2016

Reported net income on a GAAP basis $0.05 $0.02 $0.08

Amortization of intangible assets (1) $0.05 $0.05 $0.04

Executive transition costs (2) - - $0.03

Restructuring charges (3) - $0.00 $0.00

Acquisition costs (4) $0.01 - -

Income tax effect of non-GAAP adjustments (5) $(0.01) $(0.01) $(0.02)

Income tax effect of valuation allowance (6) - $0.04 $0.04

Non-GAAP net income $0.10 $0.10 $0.17

Weighted average number of diluted shares (k) 32,155 32,792 33,100

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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

Investor Relations

Uct investor presentation october 2016