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Veeco Reports Second Quarter 2021 Financial Results

August, 03, 2021

Second Quarter 2021 Highlights:

  • Revenues of $146.3 million, compared with $98.6 million in the same period last year
  • GAAP net income of $6.3 million, or $0.12 per diluted share, compared with a loss of $8.3 million, or $0.17 loss per diluted share in the same period last year
  • Non-GAAP net income of $17.9 million, or $0.35 per diluted share, compared with $5.5 million, or $0.11 per diluted share in the same period last year

PLAINVIEW, N.Y., Aug. 03, 2021 (GLOBE NEWSWIRE) -- Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its second quarter ended June 30, 2021. 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   Q2 '21   Q2 '20
Revenue   $ 146.3   $ 98.6  
Net income (loss)   $ 6.3   $ (8.3 )
Diluted earnings (loss) per share   $ 0.12   $ (0.17 )

 

             
Non-GAAP Results   Q2 '21   Q2 '20
Net income (loss)   $ 17.9   $ 5.5
Operating income (loss)   $ 21.3   $ 8.0
Diluted earnings (loss) per share   $ 0.35   $ 0.11

“Veeco delivered solid performance in the second quarter with revenue and EPS at the high end of our guidance range,” commented William J. Miller, Ph.D., Chief Executive Officer. “Sales were driven primarily by shipments to our Semiconductor and Data Storage customers.

“We are on track to deliver exceptional growth in 2021 and our evaluation systems in the field are performing well giving us confidence in our longer term growth plan,” continued Dr. Miller. “In addition, progress on our new manufacturing facility, supporting the Semiconductor market, is on schedule and will enable us to meet future demand with increased manufacturing capacity.”

Guidance and Outlook

The following guidance is provided for Veeco’s third quarter 2021:

  • Revenue is expected in the range of $135 million to $155 million
  • GAAP diluted earnings per share are expected in the range of $0.02 to $0.20
  • Non-GAAP diluted earnings per share are expected in the range of $0.25 to $0.44

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, August 3, 2021 starting at 5:00pm ET. To join the call, dial 1-866-248-8441 (toll free) or 1-929-477-0577 and use passcode 9180705. 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 that evening. We will post an accompanying slide presentation to our website prior to the beginning of the call.

About Veeco

Veeco (NASDAQ: VECO) is an innovative manufacturer of semiconductor process equipment. Our proven ion beam, laser annealing, lithography, MOCVD, and single wafer etch & clean technologies play an integral role in the fabrication and packaging of advanced semiconductor devices. With equipment designed to optimize performance, yield and cost of ownership, Veeco holds leading technology positions in the markets we serve. To learn more about Veeco’s systems and service offerings, visit www.veeco.com.

Forward-looking Statements

This press release contains “forward-looking statements”, within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, as amended, that are based on management’s expectations, estimates, projections and assumptions. Words such as “expects,” “anticipates,” “plans,” “believes,” “scheduled,” “estimates” and variations of these words and similar expressions are intended to identify forward-looking statements. Forward-looking statements include, but are not limited to, those regarding anticipated growth and trends in our businesses and markets, industry outlooks and demand drivers, our investment and growth strategies, our development of new products and technologies, our business outlook for current and future periods, the impact of the COVID-19 pandemic, our ongoing transformation initiative and the effects thereof on our operations and financial results; and other statements that are not historical facts. These statements and their underlying assumptions are subject to risks and uncertainties and are not guarantees of future performance. Factors that could cause actual results to differ materially from those expressed or implied by such statements include, without limitation: the level of demand for our products; global economic and industry conditions; the effects of regional or global health epidemics, including the effects of the COVID-19 pandemic on the Company’s operations and on those of our customers and suppliers; global trade issues, including the ongoing trade disputes between the U.S. and China, and changes in trade and export license policies; our dependency on third-party suppliers and outsourcing partners; the timing of customer orders; our ability to develop, deliver and support new products and technologies; our ability to expand our current markets, increase market share and develop new markets; the concentrated nature of our customer base; our ability to obtain and protect intellectual property rights in key technologies; our ability to achieve the objectives of operational and strategic initiatives and attract, motivate and retain key employees; the variability of results among products and end-markets, and our ability to accurately forecast future results, market conditions, and customer requirements; the impact of our indebtedness, including our convertible senior notes and our capped call transactions; and other risks and uncertainties described in our SEC filings on Forms 10-K, 10-Q and 8-K, and from time-to-time in our other SEC reports. All forward-looking statements speak only to management’s expectations, estimates, projections and assumptions as of the date of this press release or, in the case of any document referenced herein or incorporated by reference, the date of that document. The Company does not undertake any obligation to update or publicly revise any forward-looking statements to reflect events, circumstances or changes in expectations after the date of this press release.

-financial tables attached-

Veeco Contacts:
       
Investors: Anthony Bencivenga (516) 252-1438 abencivenga@veeco.com 
Media: Kevin Long (516) 714-3978  klong@veeco.com 
       

                                         

Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
                         
    Three months ended June 30,   Six months ended June 30,
       2021
     2020
     2021
     2020 
Net sales   $ 146,344     $ 98,637     $ 280,059     $ 203,139  
Cost of sales     86,178       56,743       164,978       114,826  
Gross profit     60,166       41,894       115,081       88,313  
Operating expenses, net:                        
Research and development     22,553       19,254       44,398       38,449  
Selling, general, and administrative     21,466       17,818       41,722       36,123  
Amortization of intangible assets     2,976       3,834       6,330       7,671  
Restructuring           472             1,097  
Asset impairment           281             281  
Other operating expense (income), net     (81 )     (174 )     (36 )     (283 )
Total operating expenses, net     46,914       41,485       92,414       83,338  
Operating income (loss)     13,252       409       22,667       4,975  
Interest expense, net     (6,585 )     (5,614 )     (13,208 )     (10,479 )
Loss on extinguishment of debt           (3,046 )           (3,046 )
Income (loss) before income taxes     6,667       (8,251 )     9,459       (8,550 )
Income tax expense (benefit)     319       51       617       319  
Net income (loss)   $ 6,348     $ (8,302 )   $ 8,842     $ (8,869 )
                         
Income (loss) per common share:                        
Basic   $ 0.13     $ (0.17 )   $ 0.18     $ (0.18 )
Diluted   $ 0.12     $ (0.17 )   $ 0.17     $ (0.18 )
                         
Weighted average number of shares:                        
Basic     48,743       48,109       48,758       48,147  
Diluted     53,942       48,109       53,539       48,147  

 

Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
             
    June 30,   December 31,
       2021      2020
    (unaudited)      
Assets            
Current assets:            
Cash and cash equivalents   $ 114,747   $ 129,625
Restricted cash     640     658
Short-term investments     214,635     189,771
Accounts receivable, net     108,312     79,991
Contract assets     14,084     21,246
Inventories     164,041     145,906
Deferred cost of sales     595     433
Prepaid expenses and other current assets     21,570     19,301
Total current assets     638,624     586,931
Property, plant and equipment, net     82,208     65,271
Operating lease right-of-use assets     27,768     10,275
Intangible assets, net     39,855     46,185
Goodwill     181,943     181,943
Deferred income taxes     1,440     1,440
Other assets     3,671     6,019
Total assets   $ 975,509   $ 898,064
             
Liabilities and stockholders’ equity            
Current liabilities:            
Accounts payable   $ 55,045   $ 33,656
Accrued expenses and other current liabilities     52,436     44,876
Customer deposits and deferred revenue     70,569     67,235
Income taxes payable     1,363     914
Total current liabilities     179,413     146,681
Deferred income taxes     5,257     5,240
Long-term debt     328,215     321,115
Long-term operating lease liabilities     31,036     6,305
Other liabilities     7,853     10,349
Total liabilities     551,774     489,690
             
Total stockholders’ equity     423,735     408,374
  Total liabilities and stockholders’ equity   $ 975,509   $ 898,064
             

 

Veeco Instruments Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Data
(in thousands, except per share amounts)
(unaudited)
                           
          Non-GAAP Adjustments        
          Share-Based                
Three months ended June 30, 2021      GAAP      Compensation      Amortization      Other      Non-GAAP  
Net sales   $ 146,344               $ 146,344  
Gross profit     60,166   650         31       60,847  
Gross margin     41.1 %               41.6 %
Operating expenses     46,914   (3,717 )   (2,976 )   (671 )     39,550  
Operating income (loss)     13,252   4,367     2,976     702   ^   21,297  
Net income (loss)     6,348   4,367     2,976     4,214   ^   17,905  
                           
Income (loss) per common share:                          
Basic   $ 0.13               $ 0.37  
Diluted     0.12                 0.35  
Weighted average number of shares:                          
Basic     48,743                 48,743  
Diluted (1)     53,942                 51,772  

 

__________________
^ - See table below for additional details.
(1) - The non-GAAP incremental dilutive shares includes the impact of the Company’s capped call transaction issued concurrently with our 2027 Notes, and as such, no incremental shares are added to the dilutive share count in periods in which the average stock price per share is below $18.46. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, incremental shares are added to the dilutive share count in periods in which the average stock price per share is above $13.98, and the Company is in a net income position. The average stock price for the three months ended June 30, 2021 was $22.94, and therefore 1.3 million shares were included in the non-GAAP diluted share count, and 3.5 million shares were included in the GAAP diluted share count related to the 2027 Notes.
   

   

Veeco Instruments Inc. and Subsidiaries
Other Non-GAAP Adjustments
(in thousands)
(unaudited)
     
Three months ended June 30, 2021       
Transition expenses related to San Jose expansion project $ 609  
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting   93  
Subtotal   702  
Non-cash interest expense   3,586  
Non-GAAP tax adjustment *   (74 )
Total Other $ 4,214  

 

__________________
*  - 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, 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        
          Share-based              
Three months ended June 30, 2020        GAAP      Compensation      Amortization      Other      Non-GAAP  
Net sales   $ 98,637                 $ 98,637  
Gross profit     41,894     474         19       42,387  
Gross margin     42.5   %               43.0 %
Operating expenses     41,485     (2,500 )   (3,834 )   (794 )     34,357  
Operating income (loss)     409     2,974     3,834     813   ^   8,030  
Net income (loss)     (8,302 )   2,974     3,834     7,009   ^   5,515  
                           
Income (loss) per common share:                          
Basic   $ (0.17 )               $ 0.11  
Diluted     (0.17 )                 0.11  
Weighted average number of shares:                          
Basic     48,109                   48,109  
Diluted     48,109                   48,818  

 

__________________
^  - See table below for additional details.

 
Veeco Instruments Inc. and Subsidiaries
Other Non-GAAP Adjustments
(in thousands)
(unaudited)
     
Three months ended June 30, 2020    
Restructuring $ 472  
Asset impairment   281  
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting   60  
Subtotal   813  
Non-cash interest expense   3,457  
Loss on extinguishment of debt   3,046  
Non-GAAP tax adjustment *   (307 )
Total Other $ 7,009  

 

__________________
*  - 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, 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
    June 30, 2021   June 30, 2020
GAAP Net income (loss)   $ 6,348   $ (8,302 )
Share-based compensation     4,367     2,974  
Amortization     2,976     3,834  
Restructuring         472  
Asset impairment         281  
Transition expenses related to San Jose expansion project     609      
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting     93     60  
Interest (income) expense, net     6,585     5,614  
Loss on extinguishment of debt         3,046  
Income tax expense (benefit)     319     51  
Non-GAAP Operating income (loss)   $ 21,297   $ 8,030  

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, 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                   Share-based                        
September 30, 2021   GAAP   Compensation   Amortization       Other        Non-GAAP
Net sales      $ 135        -      $ 155                             $ 135        -      $ 155  
Gross profit     55     -     67     1               56     -     68  
Gross margin     41 %   -     43 %                 41 %   -     43 %
Operating expenses     47     -     49     (3 )   (3 )   (1 )     40     -     42  
Operating income (loss)     8     -     18     4     3     1       16     -     26  
Net income (loss)   $ 1     -   $ 11     4     3     5     $ 13     -   $ 23  
                                             
Income (loss) per diluted common share   $ 0.02     -   $ 0.20                    $ 0.25     -   $ 0.44  
Weighted average number of shares (1)     54           54                   52           52  

 

 

__________________
(1) - The non-GAAP incremental dilutive shares includes the impact of the Company’s capped call transaction issued concurrently with our 2027 Notes, and as such, no incremental shares are added to the dilutive share count in periods in which the average stock price per share is below $18.46. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, incremental shares are added to the dilutive share count in periods in which the average stock price per share is above $13.98, and the Company is in a net income position.
   

 

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 September 30, 2021                         
GAAP Net income (loss)   $ 1   -   $ 11
Share-based compensation     4   -     4
Amortization     3   -     3
Interest expense, net     7   -     7
Other     1   -     1
Non-GAAP Operating income (loss)   $ 16   -   $ 26

Note: Amounts may not calculate precisely due to rounding.

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, 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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