PLAINVIEW, N.Y.--(BUSINESS WIRE)--Oct. 27, 2008--Veeco Instruments
Inc. (Nasdaq: VECO) today announced its financial results for the
third quarter and nine months ended September 30, 2008. Veeco reports
its results on a generally accepted accounting principles ("GAAP")
basis, and also provides results excluding certain items. Investors
should refer to the attached table for details of the reconciliation
of GAAP operating income to earnings excluding certain items.
Veeco will host a conference call reviewing these results at today
5:00pm at 1-877-723-9521 (toll free) or 1-719-325-4749. The call will
also be webcast live on the Veeco website at www.veeco.com. A replay
of the call will be available beginning at 8:00pm EDT tonight through
midnight on November 4, 2008 at 888-203-1112 or 719-457-0820, using
passcode 2520274, or on the Veeco website. Please also see the Veeco
website for a slide presentation reviewing financial data.
Third Quarter 2008 Highlights
-- Revenue was $115.7 million, up 18% compared to $97.7 million
last year, and within Veeco's guidance of $113-$118 million;
-- Bookings were $90.2 million, down 24% compared to $118.3
million last year, and below guidance of $113-$118 million;
-- Net loss was ($1.7) million, or ($0.05) per share, compared to
a net loss of ($5.7) million, or ($0.18) per share, last year.
Veeco's guidance was for GAAP EPS to be between ($0.12) -
($0.03) per share.
-- Veeco's earnings per share, excluding certain items, was $0.15
compared to a loss of ($0.05) last year, in line with Veeco's
guidance of $0.10-$0.15 per share.
John R. Peeler, Veeco's Chief Executive Officer, commented, "Veeco
delivered strong top line revenue growth and a significant recovery in
EBITA profitability in 2008 compared to 2007. Third quarter 2008
revenue and profitability increased significantly year-over-year in
both our LED & Solar and Data Storage businesses, and profit improved
in our Metrology business both sequentially and when compared to last
year. For the first nine months of 2008, Veeco's revenue is up 12% and
profitability has more than tripled from last year."
"Veeco's third quarter bookings of $90.2 million were lower than
originally anticipated," continued Mr. Peeler. "While we anticipated a
sequential bookings decline from the strong second quarter results,
bookings were weaker than expected due to global economic conditions,
with customers delaying or foregoing purchases. Veeco experienced the
sharpest sequential order decline in metal organic chemical vapor
deposition tools as the HB-LED industry digests the significant number
of new tools purchased this past year."
Third Quarter 2008 Summary
Veeco's revenue for the third quarter of 2008 was $115.7 million,
compared to $97.7 million in the third quarter of 2007. Third quarter
2008 operating income was $0.1 million compared with an operating loss
of ($4.2) million in the third quarter of 2007. Veeco's third quarter
2008 earnings before interest, taxes and amortization excluding
certain charges (EBITA) was $8.3 million which excluded $5.0 million
in charges as detailed in the attached financial table, compared to a
loss of ($1.7) million last year, which also excluded restructuring
charges. Third quarter 2008 net loss was ($1.7) million, or ($0.05)
per share, compared to a net loss of ($5.7) million, or ($0.18) per
share, last year. Excluding amortization expenses and using a 35% tax
rate, and excluding the $5.0 million in charges referred to above, as
well as 2007 restructuring charges, third quarter 2008 earnings per
share were $0.15, compared to a loss of ($0.05) in 2007.
Nine Month 2008 Summary
Veeco's revenue for the first nine months of 2008 was $332.5
million, compared to $295.7 million in the first nine months of 2007.
Nine month 2008 operating income was $6.5 million compared with a loss
of ($3.5) million in the first nine months of 2007. Veeco's EBITA was
$22.3 million for the first nine months of 2008, compared to $6.8
million last year which excluded certain charges in both periods as
detailed in the attached financial schedule. Net income was $0.9
million, or $0.03 per share in the first nine months of 2008, compared
to a net loss of ($8.0) million, or ($0.26) per share, last year.
Excluding amortization expenses and using a 35% tax rate, and
excluding certain charges in both periods as detailed in the attached
financial tables, earnings per share were $0.40 in the first nine
months of 2008, compared to $0.10 in the first nine months of 2007.
Outlook
"We currently expect Veeco's full-year 2008 performance to remain
solid, despite the backdrop of difficult economic conditions, with
revenues in the range of $440-$450, up approximately 10% from last
year, and profit improving dramatically," commented Mr. Peeler. "The
Company is well-positioned to capitalize on exciting multi-year
technology trends across our LED & Solar, Data Storage and Metrology
businesses."
"While we have a healthy prospect list for new orders in the
fourth quarter," continued Mr. Peeler, "it appears that the global
economic climate and constrained financing environment may cause a
broad slowdown in capital equipment purchases by our customers, with
uncertainty as to the depth and duration of the downturn. Due to this
limited visibility, we are unable to give an accurate estimate of
fourth quarter orders. We are taking corrective actions to lower our
cost structure in preparation for what is likely to be a down revenue
year in 2009. Our goal is to keep Veeco profitable on the EBITA line
by lowering our spending while maintaining strategic investments in
R&D, particularly in our LED & Solar business. It is our intent to
emerge from the present environment in a strong position to enable
future revenue and profit growth."
Veeco currently forecasts fourth quarter 2008 revenues to be in
the range of $110-$118 million. Since the Company is currently
evaluating various cost cutting actions, it is likely that Veeco will
incur restructuring charges in the fourth quarter, depending upon the
timing and extent of actions under consideration. We are not able to
estimate the extent of these charges at this time. Excluding these
potential charges, amortization of $3.3 million, and using a 35% tax
rate, Veeco's fourth quarter earnings per share are currently
forecasted to be between $0.08 to $0.15 on a non-GAAP basis.
About Veeco
Veeco Instruments Inc. manufactures enabling solutions for
customers in the HB-LED, solar, data storage, semiconductor,
scientific research and industrial markets. We have leading technology
positions in our three businesses: LED & Solar Process Equipment, Data
Storage Process Equipment, and Metrology Instruments. Veeco's
manufacturing and engineering facilities are located in New York, New
Jersey, California, Colorado, Arizona, Massachusetts and Minnesota.
Global sales and service offices are located throughout the U.S.,
Europe, Japan and APAC. http://www.veeco.com/
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,
2007 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.
Veeco Instruments Inc. and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
------------------- -------------------
2008 2007 2008 2007
--------- --------- --------- ---------
Net sales $115,709 $ 97,718 $332,465 $295,653
Cost of sales 69,626 61,824 196,026 173,819
--------- --------- --------- ---------
Gross profit 46,083 35,894 136,439 121,834
Operating expenses:
Selling, general and
administrative expense 23,589 22,723 70,528 69,347
Research and development
expense 15,302 15,049 45,173 46,341
Amortization expense 3,148 1,959 7,530 8,236
Restructuring expense 4,120 529 6,995 1,974
Asset impairment charge - - 285 -
Other income, net (213) (179) (591) (605)
--------- --------- --------- ---------
Operating income (loss) 137 (4,187) 6,519 (3,459)
Interest expense, net 1,052 665 2,913 2,256
Gain on extinguishment of debt - - - (738)
--------- --------- --------- ---------
(Loss) income before income
taxes and noncontrolling
interest (915) (4,852) 3,606 (4,977)
Income tax provision 812 954 2,860 3,490
Noncontrolling interest (54) (123) (200) (482)
--------- --------- --------- ---------
Net (loss) income ($1,673) ($5,683) $ 946 ($7,985)
========= ========= ========= =========
(Loss) income per common
share:
Net (loss) income per common
share ($0.05) ($0.18) $ 0.03 ($0.26)
Diluted net (loss) income per
common share ($0.05) ($0.18) $ 0.03 ($0.26)
Weighted average shares
outstanding 31,458 31,100 31,293 30,975
Diluted weighted average
shares outstanding 31,458 31,100 31,498 30,975
Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
September December
30, 31,
2008 2007
------------ -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $117,684 $117,083
Accounts receivable, net 71,919 75,207
Inventories, net 105,659 98,594
Prepaid expenses and other current assets 7,453 8,901
Deferred income taxes 2,781 2,649
------------ -----------
Total current assets 305,496 302,434
Property, plant and equipment, net 66,493 66,142
Goodwill 105,355 100,898
Other assets, net 62,273 59,860
------------ -----------
Total assets $539,617 $529,334
============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 33,358 $ 36,639
Accrued expenses 61,820 60,201
Deferred profit 4,814 3,250
Income taxes payable 1,084 2,278
Current portion of long-term debt 25,426 25,550
------------ -----------
Total current liabilities 126,502 127,918
Deferred income taxes 4,995 3,712
Long-term debt 120,889 121,035
Other non-current liabilities 2,185 1,978
Noncontrolling interest 814 1,014
Shareholders' equity 284,232 273,677
------------ -----------
Total liabilities and shareholders' equity $539,617 $529,334
============ ===========
Veeco Instruments Inc. and Subsidiaries
Reconciliation of operating income (loss) to earnings (loss) excluding
certain items
(In thousands, except per share data)
(Unaudited)
Three months Nine months ended
ended
September 30, September 30,
----------------- ------------------
2008 2007 2008 2007
------ -------- ------- --------
Operating income (loss) $137 ($4,187) $6,519 ($3,459)
Adjustments:
Amortization expense 3,148 1,959 7,530 8,236
Restructuring expense 4,120(1) 529(4) 6,995(1) 1,974(4)
Purchase accounting
adjustment 927(2) - 927(2) -
Asset impairment charge - - 285(3) -
------ -------- ------- --------
Earnings (loss) before
interest, income taxes and
amortization excluding
certain items ("EBITA") 8,332 (1,699) 22,256 6,751
Interest expense, net 1,052 665 2,913 2,256
Gain on extinguishment of
debt - - - (738)(5)
Adjustment to exclude gain
on extinguishment of debt - - - 738
------ -------- ------- --------
Earnings (loss) excluding
certain items before income
taxes 7,280 (2,364) 19,343 4,495
Income tax provision
(benefit) at 35% 2,548 (827) 6,770 1,573
Noncontrolling interest, net
of income tax provision at
35% (35) (80) (130) (313)
------ -------- ------- --------
Earnings (loss) excluding
certain items $4,767 ($1,457) $12,703 $3,235
====== ======== ======= ========
Earnings (loss) excluding
certain items per diluted
share $0.15 ($0.05) $0.40 $0.10
Diluted weighted average
shares outstanding 31,598 31,100 31,498 31,319
(1) During the nine months ended September 30, 2008, the Company
recorded restructuring charges of $7.0 million, of which $4.1 million
was incurred during the third quarter of 2008 and $2.9 million was
incurred during the first quarter of 2008. The third quarter
restructuring charge consists of $3.7 million associated with the
acceleration of equity awards and other severance costs resulting
from the mutually agreed termination of the employment agreement of
the Company's former CEO, as well as $0.4 million for severance and
lease-related charges in Metrology. The first quarter restructuring
charge consisted of $2.6 million of costs associated with the
consolidation and relocation of our Corporate headquarters, and $0.3
million of personnel severance costs.
(2) During the third quarter of 2008, the Company recorded $0.9
million in cost of sales related to the acquisition of Mill Lane
Engineering. This reduction was the result of purchase accounting,
which requires adjustments to capitalize inventory at fair value.
(3) During the first quarter of 2008, the Company recorded a $0.3
million asset impairment charge related to fixed asset write-offs
associated with the consolidation and relocation of our Corporate
headquarters.
(4) During the nine months ended September 30, 2007, the Company
incurred $2.0 million in expenses, of which $0.5M was incurred during
the third quarter of 2007 for personnel severance costs associated
with its restructuring plan.
(5) During the first quarter of 2007, the Company repurchased $56.0
million aggregate principal amount of its 4.125% convertible
subordinated notes. As a result of these repurchases, the Company
recorded a gain from the early extinguishment of debt in the amount
of $0.7 million.
NOTE - The above reconciliation is intended to present Veeco's
operating results, excluding certain items and providing income taxes
at a 35% statutory rate. This reconciliation is not in accordance
with, or an alternative method for, generally accepted accounting
principles in the United States, and may be different from similar
measures presented by other companies. Management of the Company
evaluates performance of its business units based on EBITA, which is
the primary indicator used to plan and forecast future periods. The
presentation of this financial measure facilitates meaningful
comparison with prior periods, as management of the Company believes
EBITA reports baseline performance and thus provides useful
information.
Veeco Instruments Inc. and Subsidiaries
Segment Revenues, Bookings, and Reconciliation
of Operating Income (Loss) to EBITA
(In thousands)
(Unaudited)
----------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
------------------- -------------------
2008 2007 2008 2007
----------------------------------------------------------------------
LED & Solar Process Equipment
Bookings $ 25,775 $ 48,679 $ 116,513 $ 121,448
Revenues $ 40,983 $ 31,824 $ 128,204 $ 82,188
Operating income $ 2,963 $ 2,704 $ 18,833 $ 5,013
Amortization expense 1,587 492 3,040 3,774
Purchase accounting
adjustment 927 - 927 -
Restructuring expense - - 7 -
---------- -------- --------- ---------
EBITA $ 5,477 $ 3,196 $ 22,807 $ 8,787
----------------------------------------------------------------------
Data Storage Process Equipment
Bookings $ 32,359 $ 32,239 $ 124,685 $ 105,837
Revenues $ 43,256 $ 31,099 $ 104,097 $ 98,840
Operating income (loss) $ 5,787 $(2,058) $ 7,466 $ 42
Amortization expense 952 952 2,856 2,854
Restructuring expense - 159 124 159
---------- -------- --------- ---------
EBITA $ 6,739 $ (947) $ 10,446 $ 3,055
----------------------------------------------------------------------
Metrology
Bookings $ 32,031 $ 37,399 $ 94,738 $ 109,392
Revenues $ 31,470 $ 34,795 $ 100,164 $ 114,625
Operating (loss) income $ (887) $ (840) $ (1,304) $ 1,482
Amortization expense 495 399 1,295 1,135
Restructuring expense 437 46 627 1,398
---------- -------- --------- ---------
EBITA $ 45 $ (395) $ 618 $ 4,015
----------------------------------------------------------------------
Unallocated Corporate
Operating loss $(7,726) $(3,993) $(18,476) $ (9,996)
Amortization expense 114 116 339 473
Restructuring expense 3,683 324 6,237 417
Asset impairment charge - - 285 -
------------------- -------------------
EBITA $(3,929) $(3,553) $(11,615) $ (9,106)
-----------------------------------------=------------------=---------
Total
Bookings $ 90,165 $118,317 $ 335,936 $ 336,677
Revenues $115,709 $ 97,718 $ 332,465 $ 295,653
Operating income (loss) $ 137 $(4,187) $ 6,519 $ (3,459)
Amortization expense 3,148 1,959 7,530 8,236
Purchase accounting
adjustment 927 - 927 -
Restructuring expense 4,120 529 6,995 1,974
Asset impairment charge - - 285 -
----------=-------- ---------=---------
EBITA $ 8,332 $(1,699) $ 22,256 $ 6,751
-----------------------------------------=------------------=---------
** Refer to footnotes on Reconciliation of operating income (loss) to
earnings (loss) excluding certain items
CONTACT: Veeco Instruments Inc.
Financial:
Debra Wasser, 1 516-677-0200 x1472
SVP Investor Relations & Corporate Communications
or
Media:
Fran Brennen, 1 516-677-0200 x1222
Senior Director Marcom
SOURCE: Veeco Instruments Inc.