PLAINVIEW, NY -- (Marketwired) -- 05/04/16 --
First Quarter 2016 Results Summary:
- Revenues of $78 million, down 21% compared with the same period last year
- GAAP net loss per share of $0.40 and Non-GAAP net loss per share of $0.15
- Non-GAAP adjusted EBITDA of negative $2.1 million
Veeco Instruments Inc. (NASDAQ: VECO) today announced financial results for its first fiscal quarter ended March 31, 2016. 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 '16 Q1 '15
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Revenue $78.0 $98.3
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Net income (loss) ($15.5) ($19.1)
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Diluted earnings (loss) per share ($0.40) ($0.48)
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Non-GAAP Results Q1 '16 Q1 '15
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Adjusted EBITDA ($2.1) $2.7
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Net income (loss) ($5.7) ($0.5)
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Diluted earnings (loss) per share ($0.15) ($0.01)
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"Although business conditions remain challenging, Veeco executed well in the first quarter. We achieved revenue at the high end of our guided range; expanded non-GAAP gross margin to nearly 42%, as well as exceeded expectations for adjusted EBITDA and earnings per share," commented John R. Peeler, Chairman and Chief Executive Officer.
"LED industry conditions remain weak. As we navigate this challenging environment, we are assessing our cost structure to align with the current business outlook while positioning the company for future growth.
"We are prioritizing investments in areas that offer meaningful growth. We're focused on qualifying our Precision Surface Processing ("PSP") systems for additional Advanced Packaging applications and have made progress in our customer engagements for Through Silicon Via ("TSV") applications. We are also leveraging our expertise in Metal Organic Chemical Vapor Deposition ("MOCVD") to capture emerging opportunities for Gallium-Nitride ("GaN") based power devices and to strengthen our position for Arsenic Phosphide applications including automotive lighting. These efforts support our strategy to enhance growth and improve the stability of our revenue stream," Mr. Peeler concluded.
Guidance and Outlook
The following guidance is provided for Veeco's second quarter 2016:
- Revenue is expected to be in the range of $70 million to $83 million
- Adjusted EBITDA (loss) is expected to be in the range of ($6) million to breakeven
- GAAP earnings (loss) per share are expected to be in the range of ($0.59) to ($0.44)
- Non-GAAP earnings (loss) per share are expected to be in the range of ($0.29) to ($0.14)
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 4, 2016 starting at 5:00pm ET. To join the call, dial 1-888-438-5448 (toll free) or 1-719-325-2458 and use passcode 858047. The call will also be webcast live on the Veeco 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.
About Veeco
Veeco's process equipment solutions enable the manufacture of LEDs, displays, power electronics, compound semiconductors, hard disk drives, semiconductors, MEMS and wireless chips. We are the leader in MOCVD, MBE, Ion Beam, Wet Etch single wafer processing and other advanced thin film process technologies. Our high performance systems drive innovation in energy efficiency, consumer electronics and network storage and allow our customers to maximize productivity and achieve lower cost of ownership. For information on our company, products and worldwide service and support, please visit 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, 2015 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
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(unaudited)
Three months ended March 31,
----------------------------
2016 2015
------------- -------------
Net sales $ 78,011 $ 98,341
Cost of sales 46,055 63,205
------------- -------------
Gross profit 31,956 35,136
------------- -------------
Operating expenses, net:
Selling, general, and administrative 19,839 22,882
Research and development 22,110 18,585
Amortization 5,251 7,962
Restructuring 100 2,357
Asset impairment - 126
Other, net (71) (951)
------------- -------------
Total operating expenses, net 47,229 50,961
------------- -------------
Operating income (loss) (15,273) (15,825)
Interest income, net 268 161
------------- -------------
Income (loss) before income taxes (15,005) (15,664)
Income tax expense (benefit) 528 3,446
------------- -------------
Net income (loss) $ (15,533) $ (19,110)
============= =============
Income (loss) per common share:
Basic $ (0.40) $ (0.48)
Diluted $ (0.40) $ (0.48)
Weighted average number of shares:
Basic 39,113 39,639
Diluted 39,113 39,639
Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
March 31, December 31,
2016 2015
------------- -------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 243,722 $ 269,232
Short-term investments 104,979 116,050
Accounts receivable, net 56,089 49,524
Inventories 77,205 77,469
Deferred cost of sales 1,090 2,100
Prepaid expenses and other current assets 29,420 22,760
Assets held for sale 4,983 5,000
------------- -------------
Total current assets 517,488 542,135
Property, plant and equipment, net 80,225 79,590
Intangible assets, net 126,653 131,674
Goodwill 114,908 114,908
Deferred income taxes 1,384 1,384
Other assets 21,098 21,098
------------- -------------
Total assets $ 861,756 $ 890,789
============= =============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 30,624 $ 30,074
Accrued expenses and other current liabilities 46,318 49,393
Customer deposits and deferred revenue 74,473 76,216
Income taxes payable 5,315 6,208
Current portion of long-term debt 347 340
------------- -------------
Total current liabilities 157,077 162,231
Deferred income taxes 11,658 11,211
Long-term debt 1,104 1,193
Other liabilities 1,447 1,539
------------- -------------
Total liabilities 171,286 176,174
Total stockholders' equity 690,470 714,615
------------- -------------
Total liabilities and stockholders' equity $ 861,756 $ 890,789
============= =============
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 Share-based Acquisition
March 31, 2016 GAAP Compensation Related Other Non-GAAP
------------------ --------- ------------ ----------- ------ ---------
Net sales $ 78,011 $ - $ - $ - $ 78,011
Cost of sales 46,055 (546) - - 45,509
--------- ------------ ----------- ------ ---------
Gross profit 31,956 546 - - 32,502
Gross margin 41.0% 41.7%
Operating
expenses, net:
Selling,
general, and
administrative 19,839 (2,743) (63) - 17,033
Research and
development 22,110 (1,099) - - 21,011
Amortization 5,251 - (5,251) - -
Restructuring 100 - - (100) -
Other, net (71) - - - (71)
--------- ------------ ----------- ------ ---------
Total operating
expenses, net 47,229 (3,842) (5,314) (100) 37,973
--------- ------------ ----------- ------ ---------
Operating income
(loss) (15,273) 4,388 5,314 100 (5,471)
Interest income,
net 268 - - - 268
--------- ------------ ----------- ------ ---------
Income (loss)
before income
taxes (15,005) 4,388 5,314 100 (5,203)
Income tax
expense
(benefit) 528 - - - 528 *
--------- ------------ ----------- ------ ---------
Net income (loss) $ (15,533) $ 4,388 $ 5,314 $ 100 $ (5,731)
========= ============ =========== ====== =========
Income (loss) per
common share:
Basic $ (0.40) $ (0.15)
Diluted $ (0.40) $ (0.15)
Weighted average
number of shares:
Basic 39,113 39,113
Diluted 39,113 39,113
Non-GAAP operating
income $ (5,471)
Depreciation 3,341
---------
Adjusted
EBITDA $ (2,130)
=========
Note: Amounts may not calculate precisely due to rounding.
* The 'with or without' method is utilized to determine the income tax
effect of the non-GAAP adjustments.
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 the stepped-up
cost of sales associated with the purchase accounting of acquired inventory.
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 as 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 adjusted EBITDA, which is used to determine management
incentive compensation as well as 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, Share-based Acquisition
2015 GAAP Compensation Related Other Non-GAAP
--------------- -------- ------------ ----------- ------- ---------
Net sales $ 98,341 $ - $ - $ - $ 98,341
Cost of sales 63,205 (601) (1,311)(a) - 61,293
-------- ------------ ----------- ------- ---------
Gross profit 35,136 601 1,311 - 37,048
Gross margin 35.7% 37.7%
Operating
expenses, net:
Selling,
general, and
administra-
tive 22,882 (2,798) - - 20,084
Research and
development 18,585 (599) - - 17,985
Amortization 7,962 - (7,962) - -
Restructuring 2,357 - - (2,357) -
Asset
impairment 126 - - (126) -
Other, net (951) - - - (951)
-------- ------------ ----------- ------- ---------
Total operating
expenses, net 50,961 (3,397) (7,962) (2,484) 37,118
-------- ------------ ----------- ------- ---------
Operating
income (loss) (15,825) 3,998 9,273 2,484 (70)
Interest
income, net 161 - - - 161
-------- ------------ ----------- ------- ---------
Income (loss)
before income
taxes (15,664) 3,998 9,273 2,484 90
Income tax
expense
(benefit) 3,446 - - (2,825)(b) 621
-------- ------------ ----------- ------- ---------
Net income
(loss) $(19,110) $ 3,998 $ 9,273 $ 5,309 $ (531)
======== ============ =========== ======= =========
Income (loss)
per common
share:
Basic $ (0.48) $ (0.01)
Diluted $ (0.48) $ (0.01)
Weighted
average number
of shares:
Basic 39,639 39,639
Diluted 39,639 39,639
Non-GAAP
operating
income $ (70)
Depreciation 2,762
---------
Adjusted
EBITDA $ 2,692
=========
Note: Amounts may not calculate precisely due to rounding.
(a) The inventory fair value step-up associated with the PSP acquisition's
purchase accounting.
(b) The 'with or without method' is utilized to determine the income tax
effect of the non-GAAP adjustments.
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 the stepped-up
cost of sales associated with the purchase accounting of acquired inventory.
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 as 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 adjusted EBITDA, which is used to determine management
incentive compensation as well as 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
---------------------
Guidance for Share-
the three based Acquis-
months ended Compen- ition
June 30, 2016 GAAP sation Related Other Non-GAAP
--------------- ---------------- ------- ------- ----- ----------------
Net sales $ 70 - $ 83 $ - $ - $ - $ 70 - $ 83
Gross profit 26 - 34 1 - - 27 - 35
Gross margin 38% - 40% 39% - 41%
Operating
income (loss) (22) - (16) 5 6 1(a) (10) - (4)
Depreciation 4 4
------ ------
Adjusted
EBITDA $ (6) - $ 0
====== ======
Net income
(loss) (23) - (17) 5 6 1(b) (11) - (5)
Income (loss)
per diluted
common share $(0.59) - $(0.44) $(0.29) - $(0.14)
====== ====== ====== ======
Weighted
average
number of
shares 39 39 39 39
Note: Amounts may not calculate precisely due to rounding.
(a) In connection with a defined benefit plan termination, the minimum
pension liability included in Accumulated Other Comprehensive Income will be
charged to
earnings.
(b) In addition to the defined benefit plan termination, the 'with or
without method' is utilized to determine the income tax effect of the non-
GAAP adjustments.
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 the stepped-up
cost of sales associated with the purchase accounting of acquired inventory.
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 as 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 adjusted EBITDA, which is used to determine management
incentive compensation as well as 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 Contacts:
Investors: Shanye Hudson 516-677-0200 x1272 [email protected]: Jeffrey Pina 516-677-0200 x1222 [email protected]
Source: Veeco Instruments Inc.