News Details

Veeco Reports Fourth Quarter and Fiscal Year 2022 Financial Results

February 15, 2023

Fourth Quarter 2022 Highlights:

  • Revenues of $153.8 million, compared with $153.0 million in the same period last year
  • GAAP net income of $128.9 million, or $2.00 per diluted share, compared with $8.2 million, or $0.15 per diluted share in the same period last year
  • Non-GAAP net income of $21.9 million, or $0.38 per diluted share, compared with $22.6 million, or $0.43 per diluted share in the same period last year

Fiscal Year 2022 Highlights:

  • Revenues of $646.1 million, compared with $583.3 million in the same period last year
  • GAAP net income of $166.9 million, or $2.71 per diluted share, compared with $26.0 million, or $0.49 per diluted share in the same period last year
  • Non-GAAP net income of $89.6 million, or $1.57 per diluted share, compared with $73.6 million, or $1.43 per diluted share in the same period last year

PLAINVIEW, N.Y., Feb. 15, 2023 (GLOBE NEWSWIRE) -- Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its fourth quarter and fiscal year ended December 31, 2022. 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

 

    4th Quarter   Full Year
GAAP Results   Q4 '22   Q4 '21   2022     2021
Revenue   $ 153.8   $ 153.0   $ 646.1   $ 583.3
Net income   $ 128.9   $ 8.2   $ 166.9   $ 26.0
Diluted earnings per share   $ 2.00   $ 0.15   $ 2.71   $ 0.49

 

    4th Quarter   Full Year
Non-GAAP Results   Q4 '22   Q4 '21   2022   2021
Operating income   $ 23.8   $ 24.9   $ 99.8   $ 86.6
Net income   $ 21.9   $ 22.6   $ 89.6   $ 73.6
Diluted earnings per share   $ 0.38   $ 0.43   $ 1.57   $ 1.43

“2022 was another year of growth for Veeco,” commented Bill Miller, Ph.D., Veeco’s Chief Executive Officer. “We achieved record revenue with our semiconductor products led by increased traction in laser annealing for both advanced and trailing nodes. We grew our backlog with strong order activity while also strengthening our balance sheet with robust cashflow from operations.”

“We enter 2023 cautiously optimistic,” continued Dr. Mr. Miller. “We’re focused on investing R&D in our product roadmaps and integrating our recently acquired silicon carbide epitaxy business. We expect to outperform the wafer fab equipment market with our semiconductor products, grow in the data storage market and maintain profitability during the current macroeconomic challenges.”

Guidance and Outlook

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

  • Revenue is expected in the range of $130 million to $150 million
  • GAAP diluted earnings (loss) per share are expected in the range of $(0.03) to $0.16
  • Non-GAAP diluted earnings per share are expected in the range of $0.12 to $0.28

Conference Call Information

A conference call reviewing these results has been scheduled for today, February 15, 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 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 December 31,   Year ended December 31,
       2022        2021        2022        2021  
Net sales   $ 153,799     $ 152,972     $ 646,137     $ 583,277  
Cost of sales     90,881       88,949       382,989       341,003  
Gross profit     62,918       64,023       263,148       242,274  
Operating expenses, net:                        
Research and development     26,327       22,283       103,565       88,680  
Selling, general, and administrative     20,965       21,211       88,952       84,536  
Amortization of intangible assets     2,505       2,974       10,018       12,280  
Other operating expense (income), net     (271 )     (71 )     317       68  
Total operating expenses, net     49,526       46,397       202,852       185,564  
Operating income     13,392       17,626       60,296       56,710  
Interest expense, net     (1,558 )     (5,799 )     (9,311 )     (26,020 )
Other income (expense), net           (5,010 )           (5,010 )
Income before income taxes     11,834       6,817       50,985       25,680  
Income tax expense (benefit)     (117,081 )     (1,387 )     (115,957 )     (358 )
Net income   $ 128,915     $ 8,204     $ 166,942     $ 26,038  
                         
Income per common share:                        
Basic   $ 2.58     $ 0.17     $ 3.35     $ 0.53  
Diluted   $ 2.00     $ 0.15     $ 2.71     $ 0.49  
                         
Weighted average number of shares:                        
Basic     49,912       49,187       49,906       49,073  
Diluted     65,684       54,931       65,607       53,643  
                                 

Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)

             
    December 31,   December 31,
       2022      2021
    (unaudited)      
Assets            
Current assets:            
Cash and cash equivalents   $ 154,925   $ 119,747
Restricted cash     547     725
Short-term investments     147,488     104,181
Accounts receivable, net     124,221     109,609
Contract assets     16,507     18,293
Inventories     206,908     170,858
Prepaid expenses and other current assets     18,305     25,974
Total current assets     668,901     549,387
Property, plant and equipment, net     107,281     99,743
Operating lease right-of-use assets     26,467     28,813
Intangible assets, net     23,887     33,905
Goodwill     181,943     181,943
Deferred income taxes     116,349     1,639
Other assets     3,355     3,546
Total assets   $ 1,128,183   $ 898,976
             
Liabilities and stockholders’ equity            
Current liabilities:            
Accounts payable   $ 52,049   $ 44,456
Accrued expenses and other current liabilities     56,031     79,752
Customer deposits and deferred revenue     127,223     63,136
Income taxes payable     2,432     1,860
Current portion of long-term debt     20,169    
Total current liabilities     257,904     189,204
Deferred income taxes     1,285     4,792
Long-term debt     254,491     229,438
Long-term operating lease liabilities     33,581     32,834
Other liabilities     3,098     5,080
Total liabilities     550,359     461,348
             
Total stockholders’ equity     577,824     437,628
Total liabilities and stockholders’ equity   $ 1,128,183   $ 898,976

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 (Q4 2022)
(in thousands)
(unaudited)

            Non-GAAP Adjustments          
            Share-Based                  
Three months ended December 31, 2022      GAAP        Compensation      Amortization      Other        Non-GAAP  
Net sales   $ 153,799                   $ 153,799  
Gross profit     62,918     1,167         1,011         65,096  
Gross margin     40.9 %                   42.3 %
Operating expenses     49,526     (4,858 )   (2,505 )   (821 )       41,342  
Operating income     13,392     6,025     2,505     1,832   ^     23,754  
Net income     128,915     6,025     2,505     (115,554 ) ^     21,891  
                                     
^   - See table below for additional details.                                    
                                     

Other Non-GAAP Adjustments (Q4 2022)
(in thousands)
(unaudited)

Three months ended December 31, 2022         
Transition expenses related to San Jose expansion project   $ 1,788  
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting   44  
Subtotal     1,832  
Non-cash interest expense     244  
Release of valuation allowance on deferred tax assets     (104,971 )
Non-GAAP tax adjustment *     (12,659 )
Total Other   $ (115,554 )
         
*   - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.      
       

Net Income per Common Share (Q4 2022)
(in thousands, except per share amounts)
(unaudited)

             
    Three months ended December 31, 2022
    GAAP   Non-GAAP
Numerator:            
Net income      $ 128,915      $ 21,891
Interest expense associated with convertible notes     2,712     2,467
Net income available to common shareholders   $ 131,627   $ 24,358
             
Denominator:            
Basic weighted average shares outstanding     49,912     49,912
Effect of potentially dilutive share-based awards     805     805
Dilutive effect of 2023 Convertible Senior Notes     504     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     65,684     63,513
             
Net income per common share:            
Basic   $ 2.58   $ 0.44
Diluted   $ 2.00   $ 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 to Non-GAAP Financial Data (Q4 2021)
(in thousands, except per share amounts)
(unaudited)

            Non-GAAP Adjustments          
            Share-based                
Three months ended December 31, 2021        GAAP        Compensation      Amortization      Other        Non-GAAP  
Net sales   $ 152,972                   $ 152,972  
Gross profit     64,023     608         235         64,866  
Gross margin     41.9 %                     42.4 %
Operating expenses     46,397     (2,906 )   (2,974 )   (537 )       39,980  
Operating income     17,626     3,514     2,974     772   ^     24,886  
Net income     8,204     3,514     2,974     7,950   ^     22,642  
                               
Income per common share:                              
Basic   $ 0.17                   $ 0.46  
Diluted     0.15                     0.43  
Weighted average number of shares:                              
Basic     49,187                     49,187  
Diluted (1)     54,931                     52,761  
                               
^   - 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 December 31, 2021 was $25.53, and therefore 1.9 million shares were included in the non-GAAP diluted share count, and 4.0 million shares were included in the GAAP diluted share count related to the 2027 Notes.

 

Other Non-GAAP Adjustments (Q4 2021)
(in thousands)
(unaudited)

       
Three months ended December 31, 2021      
Transition expenses related to San Jose expansion project   $ 698  
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting   74  
Subtotal     772  
Non-cash interest expense     3,057  
Other (income) expense, net     5,010  
Non-GAAP tax adjustment *     (889 )
Total Other   $ 7,950  
         
*   - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.
     

 

Reconciliation of GAAP Net Income to Non-GAAP Operating Income (Q4 2022 and 2021)
(in thousands)
(unaudited)

             
       Three months ended      Three months ended
    December 31, 2022   December 31, 2021
GAAP Net income   $ 128,915     $ 8,204  
Share-based compensation     6,025       3,514  
Amortization     2,505       2,974  
Transition expenses related to San Jose expansion project     1,788       698  
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting     44       74  
Interest (income) expense, net     1,558       5,799  
Other (income) expense, net           5,010  
Income tax expense (benefit)     (117,081 )     (1,387 )
Non-GAAP Operating income   $ 23,754     $ 24,886  


Reconciliation of GAAP to Non-GAAP Financial Data (FY 2022)
(in thousands)
(unaudited)

                               
            Non-GAAP Adjustments          
            Share-based                
For the year ended December 31, 2022        GAAP        Compensation      Amortization      Other        Non-GAAP  
Net sales   $ 646,137                   $ 646,137  
Gross profit     263,148     4,551         3,300         270,999  
Gross margin     40.7 %                     41.9 %
Operating expenses     202,852     (18,443 )   (10,018 )   (3,212 )       171,179  
Operating income (loss)     60,296     22,994     10,018     6,512   ^     99,820  
Net income (loss)     166,942     22,994     10,018     (110,379 ) ^     89,575  
                                     
^   - See table below for additional details.                                    

 

Other Non-GAAP Adjustments (FY 2022)
(in thousands)
(unaudited)

       
For the year ended December 31, 2022         
Transition expenses related to San Jose expansion project   $ 6,202  
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting   310  
Subtotal     6,512  
Non-cash interest expense     962  
Release of valuation allowance on deferred tax assets     (104,971 )
Non-GAAP tax adjustment *     (12,882 )
Total Other   $ (110,379 )
         
*   - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.      

 

Net Income per Common Share (FY 2022)
(in thousands, except per share amounts)
(unaudited)

             
    Year ended December 31, 2022
    GAAP   Non-GAAP
Numerator:            
Net income      $ 166,942      $ 89,575
Interest expense associated with convertible notes     10,832     9,870
Net income available to common shareholders   $ 177,774   $ 99,445
             
Denominator:            
Basic weighted average shares outstanding     49,906     49,906
Effect of potentially dilutive share-based awards     734     734
Dilutive effect of 2023 Convertible Senior Notes     504     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     65,607     63,436
             
Net income per common share:            
Basic   $ 3.35   $ 1.79
Diluted   $ 2.71   $ 1.57

 

   
(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 (FY 2021)
(in thousands, except per share amounts)
(unaudited)

                               
            Non-GAAP Adjustments          
            Share-based                
For the year ended December 31, 2021        GAAP        Compensation      Amortization      Other        Non-GAAP  
Net sales   $ 583,277                   $ 583,277  
Gross profit     242,274     2,373         448         245,095  
Gross margin     41.5 %                     42.0 %
Operating expenses     185,564     (12,876 )   (12,280 )   (1,918 )       158,490  
Operating income (loss)     56,710     15,249     12,280     2,366   ^     86,605  
Net income (loss)     26,038     15,249     12,280     20,082   ^     73,649  
                               
Income (loss) per common share:                              
Basic   $ 0.53                   $ 1.50  
Diluted     0.49                     1.43  
Weighted average number of shares:                              
Basic     49,073                     49,073  
Diluted     53,643                     51,472  
                               
^   - See table below for additional details.                              
                               

Other Non-GAAP Adjustments (FY 2021)
(in thousands)
(unaudited)

       
For the year ended December 31, 2021      
Transition expenses related to San Jose expansion project   $ 2,021  
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting   345  
Subtotal     2,366  
Non-cash interest expense     13,819  
Other (income) expense, net     5,010  
Non-GAAP tax adjustment *     (1,113 )
Total Other   $ 20,082  
         
*   - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.      

 

Reconciliation of GAAP Net Income to Non-GAAP Operating Income (FY 2022 and 2021)
(in thousands)
(unaudited)

             
       Year ended      Year ended
    December 31, 2022   December 31, 2021
GAAP Net income (loss)   $ 166,942     $ 26,038  
Share-based compensation     22,994       15,249  
Amortization     10,018       12,280  
Transition expenses related to San Jose expansion project     6,202       2,021  
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting     310       345  
Interest (income) expense, net     9,311       26,020  
Other (income) expense, net           5,010  
Income tax expense (benefit)     (115,957 )     (358 )
Non-GAAP Operating income (loss)   $ 99,820     $ 86,605  
                 

Reconciliation of GAAP to Non-GAAP Financial Data (Q1 2023)
(in millions, except per share amounts)
(unaudited)

                                               
                    Non-GAAP Adjustments                  
Guidance for the three months ending                   Share-based                          
March 31, 2023   GAAP   Compensation   Amortization       Other        Non-GAAP  
Net sales      $ 130        -      $ 150                             $ 130        -      $ 150    
Gross profit     48     -     61     1               49     -     62    
Gross margin     37 %   -     40 %                 39 %   -     41 %  
Operating expenses     49     -     51     (5 )   (2 )   (1 )     42     -     44    
Operating income (loss)     (1 )   -     10     6     2     1       8     -     19    
Net income (loss)   $ (1 )   -   $ 8     6     2     (1 )   $ 6     -   $ 15    
                                               
Income (loss) per diluted common share   $ (0.03 )   -   $ 0.16                    $ 0.12     -   $ 0.28    
                                                       

Income per Diluted Common Share (Q1 2023)
(in millions, except per share amounts)
(unaudited)

                                 
Guidance for the three months ending March 31, 2023   GAAP   Non-GAAP
Numerator:                                
Net income (loss)      $ (1 )      -      $ 8      $ 6      -      $ 15
Interest expense associated with convertible notes               1             2
Net income (loss) available to common shareholders   $ (1 )   -   $ 9   $ 6   -   $ 17
                                 
Denominator:                                
Basic weighted average shares outstanding     50           50     50         50
Effect of potentially dilutive share-based awards     1           1     1         1
Dilutive effect of 2023 Convertible Senior Notes                          
Dilutive effect of 2025 Convertible Senior Notes                           6
Dilutive effect of 2027 Convertible Senior Notes (1)               9             7
Diluted weighted average shares outstanding     51           60     51         64
                                 
Net income (loss) per common share:                                
Income (loss) per diluted common share   $ (0.03 )   -   $ 0.16   $ 0.12   -   $ 0.28

 

   
(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)
(in millions)
(unaudited)

                 
Guidance for the three months ending March 31, 2023                         
GAAP Net income (loss)   $ (1 )   -   $ 8
Share-based compensation     6     -     6
Amortization     2     -     2
Interest expense, net     1     -     1
Income tax expense (benefit)         -     1
Other         -     1
Non-GAAP Operating income   $ 8     -   $ 19

Note: Amounts may not calculate precisely due to rounding.


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Source: Veeco Instruments Inc.