Press Release Details

Veeco Reports First Quarter 2018 Financial Results

05/07/2018

First Quarter 2018 Highlights:

  • Revenues of $158.6 million, compared with $94.5 million in the same period last year
  • GAAP net loss of $15.8 million, or $0.34 loss per share
  • Non-GAAP net income of $9.2 million, or $0.20 per diluted share

PLAINVIEW, N.Y., May 07, 2018 (GLOBE NEWSWIRE) -- Veeco Instruments Inc. (Nasdaq:VECO) today announced financial results for its first quarter ended March 31, 2018.  Results are reported in accordance with U.S. generally accepted accounting principles (“GAAP”) and are also reported adjusting for certain items (“Non-GAAP”). A reconciliation between GAAP and Non-GAAP operating results is provided at the end of this press release.  

  
U.S. Dollars in millions, except per share data 
       
GAAP Results Q1 ‘18
Q1 ‘17
 
Revenue $158.6$94.5 
Net income (loss) ($15.8)$1.6 
Diluted earnings (loss) per share ($0.34)$0.04 
       
       
Non-GAAP Results Q1 ‘18
Q1 ‘17
 
Net income (loss) $9.2$4.2 
Operating income (loss) $11.3$4.8 
Diluted earnings (loss) per share $0.20$0.11 
     

"2018 is off to a great start with strong sequential and year-over-year revenue growth.  Our Non-GAAP gross margin, operating income, net income and EPS all exceeded our guided ranges,” commented John R. Peeler, Chairman and Chief Executive Officer.  “Sales growth in the first quarter was driven primarily by shipments of our lithography systems into the advanced packaging market, and shipments of MOCVD systems for LED applications.

"As we work towards our goal of being a more diversified company, we are pleased to see orders grow in the Front-End Semi and Advanced Packaging, MEMS & RF Filter markets,” continued Mr. Peeler.  “Our Ultratech integration is also proceeding well and we remain encouraged with Veeco’s growth prospects ahead.”

Guidance and Outlook

The following guidance is provided for Veeco’s second quarter 2018:

  • Revenue is expected in the range of $145 million to $170 million
  • Non-GAAP operating income is expected in the range of $2 million to $11 million
  • GAAP earnings (loss) per share are expected in the range of ($0.45) to ($0.26)
  • Non-GAAP earnings (loss) per share are expected in the range of $0.01 to $0.20

Please refer to the tables at the end of this press release for further details.

Conference Call Information

A conference call reviewing these results has been scheduled for today, May 7, 2018, starting at 5:00pm ET. To join the call, dial 1-800-281-7973 (toll free) or 1-323-794-2093 and use passcode 1840311. Participants may also access a live webcast of the call by visiting the investor relations section of Veeco's website at ir.veeco.com. A replay of the webcast will be made available on the Veeco website beginning at 8:00pm ET this evening. We will post an accompanying slide presentation to our website prior to the beginning of the call.

New Accounting Standard

The Company adopted the new accounting standard, ASC 606, related to revenue recognition, effective January 1, 2018. The prior periods presented here have been recast to reflect the adoption of this new standard.

About Veeco

Veeco (NASDAQ:VECO) is a leading manufacturer of innovative semiconductor process equipment. Our proven MOCVD, lithography, laser annealing, ion beam and single wafer etch & clean technologies play an integral role in producing LEDs for solid-state lighting and displays, and in the fabrication of advanced semiconductor devices. With equipment designed to maximize performance, yield and cost of ownership, Veeco holds technology leadership positions in all these served markets. To learn more about Veeco's innovative equipment and services, visit www.veeco.com

Forward-looking Statements

To the extent that this news release 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 factors include the risks 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, 2017 and in our subsequent quarterly reports on Form 10-Q, current reports on Form 8-K and press releases. Veeco does not undertake any obligation to update any forward-looking statements to reflect future events or circumstances after the date of such statements.

-financial tables attached-

Veeco Contacts:
Investors:
Anthony Bencivenga 516-677-0200 x1308
abencivenga@veeco.com

Media:  
David Pinto 408-325-6157
dpinto@veeco.com 

  
Veeco Instruments Inc. and Subsidiaries 
Condensed Consolidated Statements of Operations 
(in thousands, except per share amounts) 
(unaudited) 
 Three months ended March 31,
 
         
  2018   2017  
Net sales$  158,574  $  94,499  
Cost of sales   101,894     59,999  
Gross profit   56,680     34,500  
Operating expenses, net:   
Research and development   24,320     14,989  
Selling, general, and administrative   26,383     19,105  
Amortization of intangible assets   13,532     2,867  
Restructuring   2,695     1,338  
Acquisition costs   1,342     1,361  
Asset impairment   —     463  
Other, net   (157)    (78) 
Total operating expenses, net   68,115     40,045  
Operating income (loss)   (11,435)    (5,545) 
Interest income (expense), net   (4,622)    (3,342) 
Income (loss) before income taxes   (16,057)    (8,887) 
Income tax expense (benefit)   (230)    (10,527) 
Net income (loss)$  (15,827) $  1,640  
       
Income (loss) per common share:   
Basic$  (0.34) $  0.04  
Diluted$  (0.34) $  0.04  
    
Weighted average number of shares:   
Basic   46,963     39,619  
Diluted   46,963     40,140  
    

 

Veeco Instruments Inc. and Subsidiaries 
Condensed Consolidated Balance Sheets 
(in thousands) 
(unaudited) 
    
 March 31,
 December 31,
 2018
 2017
Assets       
Current assets:   
Cash and cash equivalents$245,525  $279,736 
Restricted cash 841   847 
Short-term investments 65,130   47,780 
Accounts receivable, net 108,219   98,866 
Contract assets 1,984   160 
Inventories 130,964   120,266 
Deferred cost of sales 1,080   15,994 
Prepaid expenses and other current assets   29,615     33,437 
Total current assets 583,358   597,086 
Property, plant and equipment, net 83,100   85,058 
Intangible assets, net 356,311   369,843 
Goodwill 307,131   307,131 
Deferred income taxes 3,281   3,047 
Other assets   28,847     25,310 
Total assets$  1,362,028  $  1,387,475 
       
Liabilities and stockholders' equity   
Current liabilities:   
Accounts payable$58,273  $50,318 
Accrued expenses and other current liabilities 54,297   58,068 
Customer deposits and deferred revenue 94,473   112,032 
Income taxes payable   1,581     3,846 
Total current liabilities 208,624   224,264 
Deferred income taxes 36,794   36,845 
Long-term debt 278,489   275,630 
Other liabilities   10,164     10,643 
Total liabilities 534,071   547,382 
    
Total stockholders' equity   827,957     840,093 
    
Total liabilities and stockholders' equity$  1,362,028  $  1,387,475 
       

 

Veeco Instruments Inc. and Subsidiaries 
Reconciliation of GAAP to Non-GAAP Financial Data 
(in thousands, except per share amounts) 
(unaudited) 
        
  Non-GAAP Adjustments  
Three months ended March 31, 2018GAAPShare-Based CompensationAmortization
OtherNon-GAAP 
Net sales$  158,574     $  158,574  
Gross profit   56,680   554     611    57,845  
Gross margin 35.7%     36.5% 
Research and development   24,320   (954)      23,366  
Selling, general, and administrative and Other, net   26,226   (2,857)    (188)   23,181  
Net income (loss)   (15,827)  4,537   13,532   6,985    9,227  
        
Income (loss) per common share:       
Basic$  (0.34)    $  0.20  
Diluted   (0.34)       0.20  
Weighted average number of shares:       
Basic   46,963        47,022  
Diluted   46,963        47,191  
        
Veeco Instruments Inc. and Subsidiaries 
Other Non-GAAP Adjustments 
(in thousands) 
(unaudited) 
Three months ended March 31, 2018       
Restructuring   2,523  
Acquisition related   1,342  
Release of inventory fair value step-up associated with the Ultratech purchase accounting   514  
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting   293  
Non-cash interest expense   2,859  
Other   (8) 
Non-GAAP tax adjustment *   (538) 
Total Other   6,985  
        
* - The 'with or without' method is utilized to determine the income tax effect of all Non-GAAP adjustments.
        
These tables include financial measures adjusted for the impact of certain items; these financial measures are therefore not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These Non-GAAP financial measures exclude items such as: share-based compensation expense; charges relating to restructuring initiatives; non-cash asset impairments; certain other non-operating gains and losses; and acquisition-related items such as transaction costs, non-cash amortization of acquired intangible assets, incremental transaction-related compensation, and certain integration costs.

These Non-GAAP financial measures may be different from Non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. By excluding these items, Non-GAAP financial measures are intended to facilitate meaningful comparisons to historical operating results, competitors' operating results, and estimates made by securities analysts. Management is evaluated on key performance metrics including Non-GAAP Operating Income (loss), which is used to determine management incentive compensation as well as to forecast future periods. These Non-GAAP financial measures may be useful to investors in allowing for greater transparency of supplemental information used by management in its financial and operational decision-making. In addition, similar Non-GAAP financial measures have historically been reported to investors; the inclusion of comparable numbers provides consistency in financial reporting. Investors are encouraged to review the reconciliation of the Non-GAAP financial measures used in this news release to their most directly comparable GAAP financial measures.
 

 

Veeco Instruments Inc. and Subsidiaries 
Reconciliation of GAAP to Non-GAAP Financial Data 
(in thousands, except per share amounts) 
(unaudited) 
       
  Non-GAAP Adjustments  
Three months ended March 31, 2017GAAPShare-based CompensationAmortizationOtherNon-GAAP 
Net sales$  94,499    $  94,499  
Gross profit   34,500   657    89    35,246  
Gross margin 36.5%    37.3% 
Research and development   14,989   (429)     14,560  
Selling, general, and administrative and Other, net   19,027   (3,100)   (1,361)   14,566  
Net income (loss)   1,640   4,186   2,867  (4,504)   4,189  
       
Income (loss) per common share:      
Basic$  0.04    $  0.11  
Diluted   0.04       0.10  
Weighted average number of shares:      
Basic   39,619       39,619  
Diluted   40,140       40,140  
       
Veeco Instruments Inc. and Subsidiaries 
Other Non-GAAP Adjustments 
(in thousands) 
(unaudited) 
Three months ended March 31, 2017      
Restructuring       1,338  
Acquisition related       1,361  
Asset impairment       463  
Accelerated depreciation       89  
Non-cash interest expense       2,185  
Non-GAAP tax adjustment *       (9,940) 
Total Other       (4,504) 
       
* - The 'with or without' method is utilized to determine the income tax effect of all Non-GAAP adjustments. Also included in the Non-GAAP tax adjustment is the exclusion of a $4.9 million tax benefit associated with the Convertible Senior Notes, as well as a $4.9 million tax benefit associated with the reversal of a reserve for an uncertain tax position.
       
These tables include financial measures adjusted for the impact of certain items; these financial measures are therefore not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These Non-GAAP financial measures exclude items such as: share-based compensation expense; charges relating to restructuring initiatives; non-cash asset impairments; certain other non-operating gains and losses; and acquisition-related items such as transaction costs, non-cash amortization of acquired intangible assets, incremental transaction-related compensation, and certain integration costs.

These Non-GAAP financial measures may be different from Non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. By excluding these items, Non-GAAP financial measures are intended to facilitate meaningful comparisons to historical operating results, competitors' operating results, and estimates made by securities analysts. Management is evaluated on key performance metrics including Non-GAAP Operating Income (loss), which is used to determine management incentive compensation as well as to forecast future periods. These Non-GAAP financial measures may be useful to investors in allowing for greater transparency of supplemental information used by management in its financial and operational decision-making. In addition, similar Non-GAAP financial measures have historically been reported to investors; the inclusion of comparable numbers provides consistency in financial reporting. Investors are encouraged to review the reconciliation of the Non-GAAP financial measures used in this news release to their most directly comparable GAAP financial measures.
 

 

Veeco Instruments Inc. and Subsidiaries  
Reconciliation of GAAP Net Income (loss) to Non-GAAP Operating Income (loss)  
(in thousands)  
(unaudited)  
    Three months ended
 Three months ended  
     March 31, 2018 
  March 31, 2017   
GAAP Net income (loss)   $  (15,827) $  1,640   
Share-based compensation      4,537     4,186   
Amortization      13,532     2,867   
Restructuring      2,523     1,338   
Acquisition related      1,342     1,361   
Release of inventory fair value step-up associated with the Ultratech purchase accounting   514     -    
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting   293     -    
Asset impairment      -      463   
Accelerated depreciation      -      89   
Interest (income) expense      4,622     3,342   
Other      (8)    -    
Income tax expense (benefit)      (230)    (10,527)  
Non-GAAP Operating Income (loss)   $  11,298  $  4,759   
           
This table includes financial measures adjusted for the impact of certain items; these financial measures are therefore not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These Non-GAAP financial measures exclude items such as: share-based compensation expense; charges relating to restructuring initiatives; non-cash asset impairments; certain other non-operating gains and losses; and acquisition-related items such as transaction costs, non-cash amortization of acquired intangible assets, incremental transaction-related compensation, and certain integration costs.

These Non-GAAP financial measures may be different from Non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. By excluding these items, Non-GAAP financial measures are intended to facilitate meaningful comparisons to historical operating results, competitors' operating results, and estimates made by securities analysts. Management is evaluated on key performance metrics including Non-GAAP Operating Income (loss), which is used to determine management incentive compensation as well as to forecast future periods. These Non-GAAP financial measures may be useful to investors in allowing for greater transparency of supplemental information used by management in its financial and operational decision-making. In addition, similar Non-GAAP financial measures have historically been reported to investors; the inclusion of comparable numbers provides consistency in financial reporting. Investors are encouraged to review the reconciliation of the Non-GAAP financial measures used in this news release to their most directly comparable GAAP financial measures.
 
  

 

Veeco Instruments Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Data
(in millions, except per share amounts)
(unaudited)
               
      Non-GAAP Adjustments    
Guidance for the three months ending June 30, 2018GAAP  Share-based Compensation  Amortization  Other  Non-GAAP
Net sales$  145  - $  170      $  145  - $  170 
               
Gross profit   47  -    58    1  -   -     48 -   59 
Gross margin 33%- 35%        33%- 35%
               
Net income (loss)$  (21) - $  (12)   4  14  4 $  1  - $  10 
               
Income (loss) per diluted common share$  (0.45)-$  (0.26)       $  0.01 -$  0.20 
 Weighted average number of shares   47     47           47     47 
               
               
Veeco Instruments Inc. and Subsidiaries
Reconciliation of GAAP Net Income (loss) to Non-GAAP Operating Income (Loss)
(in millions)
(unaudited)
               
Guidance for the three months ending June 30, 2018             
GAAP Net income (loss)        $  (21) - $  (12)
Share-based compensation           4  -    4 
Amortization           14 -   14 
Restructuring         1 -   1 
Acquisition related             1 -   1 
Interest expense, net             5 -   5 
Income tax expense (benefit)             (2)-   (2)
Non-GAAP Operating Income          $  2 -$  11 
               
Note:  Amounts may not calculate precisely due to rounding.             
               
 
These table includes financial measures adjusted for the impact of certain items; these financial measures are therefore not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These Non-GAAP financial measures exclude items such as: share-based compensation expense; charges relating to restructuring initiatives; non-cash asset impairments; certain other non-operating gains and losses; and acquisition-related items such as transaction costs, non-cash amortization of acquired intangible assets, incremental transaction-related compensation, and certain integration costs.

These Non-GAAP financial measures may be different from Non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. By excluding these items, Non-GAAP financial measures are intended to facilitate meaningful comparisons to historical operating results, competitors' operating results, and estimates made by securities analysts. Management is evaluated on key performance metrics including Non-GAAP Operating Income (loss), which is used to determine management incentive compensation as well as to forecast future periods. These Non-GAAP financial measures may be useful to investors in allowing for greater transparency of supplemental information used by management in its financial and operational decision-making. In addition, similar Non-GAAP financial measures have historically been reported to investors; the inclusion of comparable numbers provides consistency in financial reporting. Investors are encouraged to review the reconciliation of the Non-GAAP financial measures used in this news release to their most directly comparable GAAP financial measures.

  

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