News Details

Veeco Reports First Quarter 2023 Financial Results

May 8, 2023

First Quarter 2023 Highlights:

  • Revenues of $153.5 million, compared with $156.4 million in the same period last year
  • GAAP net income of $8.7 million, or $0.17 per diluted share, compared with $13.3 million, or $0.24 per diluted share in the same period last year
  • Non-GAAP net income of $16.9 million, or $0.30 per diluted share, compared with $21.7 million, or $0.38 per diluted share in the same period last year

PLAINVIEW, N.Y., May 08, 2023 (GLOBE NEWSWIRE) -- Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its first quarter ended March 31, 2023. 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

 

    1st Quarter
GAAP Results   Q1 '23   Q1 '22
Revenue   $ 153.5     $ 156.4  
Net income   $ 8.7     $ 13.3  
Diluted earnings per share   $ 0.17     $ 0.24  

 

    1st Quarter
Non-GAAP Results   Q1 '23   Q1 '22
Operating income   $ 20.4     $ 24.7  
Net income   $ 16.9     $ 21.7  
Diluted earnings per share   $ 0.30     $ 0.38  
                 

“We delivered solid first quarter results above the high-end of our guidance range led by our semiconductor business,” commented Bill Miller, Veeco’s Chief Executive Officer. “In particular, our laser annealing business is gaining momentum, as demonstrated by recent orders for additional annealing steps at leading logic customers. We’re also seeing traction within the memory market for advanced nodes, which represents a significant long-term growth opportunity for the Company.

“As we look ahead in 2023, we remain committed to investing in the leading edge with differentiated solutions, winning new customers, and new applications positioning Veeco for long term growth.”

Guidance and Outlook

The following guidance is provided for Veeco’s second quarter 2023:

  • Revenue is expected in the range of $145 million to $165 million
  • GAAP diluted earnings (loss) per share are expected in the range of $0.11 to $0.21
  • Non-GAAP diluted earnings per share are expected in the range of $0.26 to $0.34

Conference Call Information

A conference call reviewing these results has been scheduled for today, May 8, 2023 starting at 5:00pm ET. To join the call, dial 1-877-407-8029 (toll free) or 1-201-689-8029. 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 laser annealing, ion beam, chemical vapor deposition (CVD), metal organic chemical vapor deposition (MOCVD), single wafer etch & clean and lithography 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, 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; 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; 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; 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 Pappone (516) 500-8798 apappone@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 March 31,
    2023
  2022
Net sales   $ 153,504     $ 156,426  
Cost of sales     91,487       90,413  
Gross profit     62,017       66,013  
Operating expenses, net:            
Research and development     27,562       24,117  
Selling, general, and administrative     22,627       22,894  
Amortization of intangible assets     2,111       2,504  
Other operating expense (income), net     (89 )     (19 )
Total operating expenses, net     52,211       49,496  
Operating income     9,806       16,517  
Interest expense, net     (802 )     (2,803 )
Income before income taxes     9,004       13,714  
Income tax expense (benefit)     263       384  
Net income   $ 8,741     $ 13,330  
             
Income per common share:            
Basic   $ 0.17     $ 0.27  
Diluted   $ 0.17     $ 0.24  
             
Weighted average number of shares:            
Basic     50,559       49,614  
Diluted     59,856       65,285  
                 

 

 
Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
                 
    March 31,   December 31,
    2023   2022
    (unaudited)        
Assets                
Current assets:                
Cash and cash equivalents   $ 140,721     $ 154,925  
Restricted cash     476       547  
Short-term investments     112,170       147,488  
Accounts receivable, net     120,091       124,221  
Contract assets     17,727       16,507  
Inventories     225,717       206,908  
Prepaid expenses and other current assets     26,368       18,305  
Total current assets     643,270       668,901  
Property, plant and equipment, net     113,228       107,281  
Operating lease right-of-use assets     26,279       26,467  
Intangible assets, net     50,316       23,887  
Goodwill     214,964       181,943  
Deferred income taxes     115,949       116,349  
Other assets     3,242       3,355  
Total assets   $ 1,167,248     $ 1,128,183  
                 
Liabilities and stockholders’ equity                
Current liabilities:                
Accounts payable   $ 61,973     $ 52,049  
Accrued expenses and other current liabilities     69,490       56,031  
Customer deposits and deferred revenue     133,187       127,223  
Income taxes payable     2,525       2,432  
Current portion of long-term debt           20,169  
Total current liabilities     267,175       257,904  
Deferred income taxes     6,938       1,285  
Long-term debt     254,713       254,491  
Long-term operating lease liabilities     33,513       33,581  
Other liabilities     19,350       3,098  
Total liabilities     581,689       550,359  
                 
Total stockholders’ equity     585,559       577,824  
Total liabilities and stockholders’ equity   $ 1,167,248     $ 1,128,183  
                 

Note on Reconciliation Tables

The below 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.

 
Reconciliation of GAAP to Non-GAAP Financial Data (Q1 2023)
(in thousands)
(unaudited)
                           
          Non-GAAP Adjustments        
Three months ended March 31, 2023   GAAP   Share-Based
Compensation
  Amortization   Other   Non-GAAP  
Net sales   $ 153,504               $ 153,504  
Gross profit     62,017   1,451         232       63,700  
Gross margin     40.4 %               41.5 %
Operating expenses     52,211   (5,576 )   (2,111 )   (1,266 )     43,258  
Operating income     9,806   7,027     2,111     1,498   ^   20,442  
Net income     8,741   7,027     2,111     (1,006 ) ^   16,873  

___________________________
^   - See table below for additional details.

 
Other Non-GAAP Adjustments (Q1 2023)
(in thousands)
(unaudited)
     
Three months ended March 31, 2023    
Transition expenses related to San Jose expansion project $ 780  
Acquisition related   718  
Subtotal   1,498  
Non-cash interest expense   226  
Non-GAAP tax adjustment *   (2,730 )
Total Other $ (1,006 )

___________________________
*   - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.

 
Net Income per Common Share (Q1 2023)
(in thousands, except per share amounts)
(unaudited)
                 
    Three months ended March 31, 2023
    GAAP   Non-GAAP
Numerator:                
Net income   $ 8,741     $ 16,873  
Interest expense associated with convertible notes     1,277       2,354  
Net income available to common shareholders   $ 10,018     $ 19,227  
                 
Denominator:                
Basic weighted average shares outstanding     50,559       50,559  
Effect of potentially dilutive share-based awards     355       355  
Dilutive effect of 2023 Convertible Senior Notes           82  
Dilutive effect of 2025 Convertible Senior Notes           5,521  
Dilutive effect of 2027 Convertible Senior Notes(1)     8,942       6,771  
Diluted weighted average shares outstanding     59,856       63,288  
                 
Net income per common share:                
Basic   $ 0.17     $ 0.33  
Diluted   $ 0.17     $ 0.30  

___________________________
(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, an effective conversion price of $18.46 is used when determining incremental shares to add to the dilutive share count. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, an effective conversion price of $13.98 is used when determining incremental shares to add to the dilutive share count.

 
Reconciliation of GAAP to Non-GAAP Financial Data (Q1 2022)
(in thousands, except per share amounts)
(unaudited)
                           
          Non-GAAP Adjustments        
Three months ended March 31, 2022     GAAP   Share-based
Compensation
  Amortization   Other   Non-GAAP  
Net sales   $ 156,426               $ 156,426  
Gross profit     66,013   938         534       67,485  
Gross margin     42.2 %               43.1 %
Operating expenses     49,496   (3,543 )   (2,504 )   (691 )     42,758  
Operating income     16,517   4,481     2,504     1,225   ^   24,727  
Net income     13,330   4,481     2,504     1,387   ^   21,702  

___________________________
^   - See table below for additional details.

 
Other Non-GAAP Adjustments (Q1 2022)
(in thousands)
(unaudited)
     
Three months ended March 31, 2022    
Transition expenses related to San Jose expansion project $ 1,165  
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting   60  
Subtotal   1,225  
Non-cash interest expense   237  
Non-GAAP tax adjustment *   (75 )
Total Other $ 1,387  

___________________________
*   - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.

 
Net Income per Common Share (Q1 2022)
(in thousands, except per share amounts)
(unaudited)
                 
    Three months ended March 31, 2022
    GAAP   Non-GAAP
Numerator:                
Net income   $ 13,330     $ 21,702  
Interest expense associated with convertible notes     2,544       2,467  
Net income available to common shareholders   $ 15,874     $ 24,169  
                 
Denominator:                
Basic weighted average shares outstanding     49,614       49,614  
Effect of potentially dilutive share-based awards     1,208       1,208  
Dilutive effect of 2023 Convertible Senior Notes           504  
Dilutive effect of 2025 Convertible Senior Notes     5,521       5,521  
Dilutive effect of 2027 Convertible Senior Notes(1)     8,942       6,771  
Diluted weighted average shares outstanding     65,285       63,618  
                 
Net income per common share:                
Basic   $ 0.27     $ 0.44  
Diluted   $ 0.24     $ 0.38  

___________________________
(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, an effective conversion price of $18.46 is used when determining incremental shares to add to the dilutive share count. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, an effective conversion price of $13.98 is used when determining incremental shares to add to the dilutive share count.

 
Reconciliation of GAAP Net Income to Non-GAAP Operating Income (Q1 2023 and 2022)
(in thousands)
(unaudited)
                 
    Three months ended   Three months ended
    March 31, 2023   March 31, 2022
GAAP Net income   $ 8,741     $ 13,330  
Share-based compensation     7,027       4,481  
Amortization     2,111       2,504  
Transition expenses related to San Jose expansion project     780       1,165  
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting           60  
Acquisition related     718        
Interest (income) expense, net     802       2,803  
Income tax expense (benefit)     263       384  
Non-GAAP Operating income   $ 20,442     $ 24,727  
                 

 

 
Reconciliation of GAAP to Non-GAAP Financial Data (Q2 2023)
(in millions, except per share amounts)
(unaudited)
                                             
                    Non-GAAP Adjustments                
Guidance for the three months ending
June 30, 2023
  GAAP   Share-based
Compensation
  Amortization   Other   Non-GAAP
Net sales   $ 145     -   $ 165                 $ 145     -   $ 165  
Gross profit     59     -     68     2               61     -     70  
Gross margin     41 %   -     41 %                 42 %   -     42 %
Operating expenses     51     -     53     (6 )   (2 )         44     -     46  
Operating income (loss)     8     -     15     8     2           18     -     25  
Net income (loss)   $ 6     -   $ 12     8     2     (2 )   $ 14     -   $ 20  
                                             
Income (loss) per diluted common share   $ 0.11     -   $ 0.21                 $ 0.26     -   $ 0.34  
                                                     

 

 
Income per Diluted Common Share (Q2 2023)
(in millions, except per share amounts)
(unaudited)
                                         
Guidance for the three months ending June 30, 2023   GAAP   Non-GAAP
Numerator:                                        
Net income (loss)   $ 6     -   $ 12     $ 14     -   $ 20  
Interest expense associated with convertible notes               1       2           2  
Net income (loss) available to common shareholders   $ 6     -   $ 13     $ 17     -   $ 22  
                                         
Denominator:                                        
Basic weighted average shares outstanding     51           51       51           51  
Effect of potentially dilutive share-based awards                                
Dilutive effect of 2025 Convertible Senior Notes                     6           6  
Dilutive effect of 2027 Convertible Senior Notes(1)               9       7           7  
Diluted weighted average shares outstanding     51           60       64           64  
                                         
Net income (loss) per common share:                                        
Income (loss) per diluted common share   $ 0.11     -   $ 0.21     $ 0.26     -   $ 0.34  

___________________________
(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, an effective conversion price of $18.46 is used when determining incremental shares to add to the dilutive share count. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, an effective conversion price of $13.98 is used when determining incremental shares to add to the dilutive share count.

 
Reconciliation of GAAP Net Income to Non-GAAP Operating Income (Q2 2023)
(in millions)
(unaudited)
                     
Guidance for the three months ending June 30, 2023                    
GAAP Net income (loss)   $ 6     -   $ 12  
Share-based compensation     8     -     8  
Amortization     2     -     2  
Income tax expense (benefit)     2     -     3  
Non-GAAP Operating income   $ 18     -   $ 25  

Note: Amounts may not calculate precisely due to rounding.


Primary Logo

Source: Veeco Instruments Inc.