News Details

Veeco Reports Fourth Quarter and Fiscal Year 2023 Financial Results

February 14, 2024

Fourth Quarter 2023 Highlights:

  • Revenue of $173.9 million, compared with $153.8 million in the same period last year
  • GAAP net income of $21.6 million, or $0.37 per diluted share, compared with $128.9 million, or $2.00 per diluted share in the same period last year
  • Non-GAAP net income of $29.8 million, or $0.51 per diluted share, compared with $21.9 million, or $0.38 per diluted share in the same period last year

Fiscal Year 2023 Highlights:

  • Revenue of $666.4 million, compared with $646.1 million in the same period last year
  • GAAP net loss of $30.4 million, or $0.56 loss per diluted share, included a $97.1 million loss related to debt refinancing, compared with net income of $166.9 million, or $2.71 earnings per diluted share in the same period last year
  • Non-GAAP net income of $98.3 million, or $1.69 per diluted share, compared with $89.6 million, or $1.57 per diluted share in the same period last year

PLAINVIEW, N.Y., Feb. 14, 2024 (GLOBE NEWSWIRE) -- Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its fourth quarter and fiscal year ended December 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

 

                         
    4th Quarter   Full Year
GAAP Results   Q4 '23   Q4 '22   2023     2022
Revenue   $ 173.9   $ 153.8   $ 666.4     $ 646.1
Net income (loss)   $ 21.6   $ 128.9   $ (30.4 )   $ 166.9
Diluted earnings (loss) per share   $ 0.37   $ 2.00   $ (0.56 )   $ 2.71

 

                         
    4th Quarter   Full Year
Non-GAAP Results   Q4 '23   Q4 '22   2023   2022
Operating income   $ 32.1   $ 23.8   $ 109.6   $ 99.8
Net income   $ 29.8   $ 21.9   $ 98.3   $ 89.6
Diluted earnings per share   $ 0.51   $ 0.38   $ 1.69   $ 1.57

“2023 was a critical year for Veeco, highlighted by our Semiconductor business outperforming WFE growth for the 3rd consecutive year,” commented Bill Miller, Ph.D., Veeco’s Chief Executive Officer. “I’m proud to say we successfully grew the business, improved profitability, and most importantly, laid the groundwork for future growth. We achieved a significant milestone by shipping evaluation systems for two important core technologies in Nanosecond Annealing and Ion Beam Deposition. These technologies enable our customers to fabricate devices that enable higher performance and reduced power consumption.”

Guidance and Outlook

The following guidance is provided for Veeco’s first quarter 2024:

  • Revenue is expected in the range of $160 million to $180 million
  • GAAP diluted earnings per share are expected in the range of $0.22 to $0.33
  • Non-GAAP diluted earnings per share are expected in the range of $0.36 to $0.46

Conference Call Information

A conference call reviewing these results has been scheduled for today, February 14, 2024 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 December 31,   Year ended December 31,
       2023      2022      2023      2022
Net sales   $ 173,924     $ 153,799     $ 666,435     $ 646,137  
Cost of sales     95,269       90,881       381,376       382,989  
Gross profit     78,655       62,918       285,059       263,148  
Operating expenses, net:                        
Research and development     29,091       26,327       112,853       103,565  
Selling, general, and administrative     23,493       20,965       92,756       88,952  
Amortization of intangible assets     2,123       2,505       8,481       10,018  
Other operating expense (income), net     (235 )     (271 )     1,029       317  
Total operating expenses, net     54,472       49,526       215,119       202,852  
Operating income     24,183       13,392       69,940       60,296  
Interest expense, net           (1,558 )     (1,187 )     (9,311 )
Other income (expense), net                 (97,091 )      
Income (loss) before income taxes     24,183       11,834       (28,338 )     50,985  
Income tax expense (benefit)     2,546       (117,081 )     2,030       (115,957 )
Net income (loss)   $ 21,637     $ 128,915     $ (30,368 )   $ 166,942  
                         
Income (loss) per common share:                        
Basic   $ 0.39     $ 2.58     $ (0.56 )   $ 3.35  
Diluted   $ 0.37     $ 2.00     $ (0.56 )   $ 2.71  
                         
Weighted average number of shares:                        
Basic     55,537       49,912       53,769       49,906  
Diluted     59,821       65,684       53,769       65,607  
                                 

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

    December 31,   December 31,
       2023      2022
    (unaudited)      
Assets            
Current assets:            
Cash and cash equivalents   $ 158,781   $ 154,925
Restricted cash     339     547
Short-term investments     146,664     147,488
Accounts receivable, net     103,018     124,221
Contract assets     24,370     16,507
Inventories     237,635     206,908
Prepaid expenses and other current assets     35,471     18,305
Total current assets     706,278     668,901
Property, plant and equipment, net     118,459     107,281
Operating lease right-of-use assets     24,377     26,467
Intangible assets, net     43,945     23,887
Goodwill     214,964     181,943
Deferred income taxes     117,901     116,349
Other assets     3,117     3,355
Total assets   $ 1,229,041   $ 1,128,183
             
Liabilities and stockholders’ equity            
Current liabilities:            
Accounts payable   $ 42,383   $ 52,049
Accrued expenses and other current liabilities     57,624     56,031
Contract liabilities     118,026     127,223
Income taxes payable         2,432
Current portion of long-term debt         20,169
Total current liabilities     218,033     257,904
Deferred income taxes     6,552     1,285
Long-term debt     274,941     254,491
Long-term operating lease liabilities     31,529     33,581
Other liabilities     25,544     3,098
Total liabilities     556,599     550,359
             
Total stockholders’ equity     672,442     577,824
Total liabilities and stockholders’ equity   $ 1,229,041   $ 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 (Q4 2023)
(in thousands)
(unaudited)

                               
            Non-GAAP Adjustments          
            Share-Based                  
Three months ended December 31, 2023      GAAP        Compensation      Amortization      Other        Non-GAAP  
Net sales   $ 173,924                   $ 173,924  
Gross profit     78,655     334                 78,989  
Gross margin     45.2 %                   45.4 %
Operating expenses     54,472     (5,845 )   (2,123 )   363         46,867  
Operating income     24,183     6,179     2,123     (363 ) ^     32,122  
Net income     21,637     6,179     2,123     (116 ) ^     29,823  
                                     
^   - See table below for additional details.                                    
                                     

Other Non-GAAP Adjustments (Q4 2023)
(in thousands)
(unaudited)

Three months ended December 31, 2023
      
Changes in contingent consideration   $ (465 )
Other     102  
Subtotal     (363 )
Non-cash interest expense     294  
Non-GAAP tax adjustment *     (47 )
Total Other   $ (116 )
         
*   - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.
         

Net Income per Common Share (Q4 2023)
(in thousands, except per share amounts)
(unaudited)

             
    Three months ended December 31, 2023
    GAAP   Non-GAAP
Numerator:          
Net income $ 21,637      $ 29,823
Interest expense associated with 2025 and 2027 Convertible Senior Notes   511     466
Net income available to common shareholders $ 22,148   $ 30,289
             
Denominator:          
Basic weighted average shares outstanding   55,537     55,537
Effect of potentially dilutive share-based awards   1,391     1,391
Dilutive effect of 2025 Convertible Senior Notes   1,104     1,104
Dilutive effect of 2027 Convertible Senior Notes (1)   1,789     1,355
Diluted weighted average shares outstanding   59,821     59,387
             
Net income per common share:          
Basic   $ 0.39   $ 0.54
Diluted   $ 0.37   $ 0.51
             
( 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 2022)
(in thousands, except per share amounts)
(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 Net Income to Non-GAAP Operating Income (Q4 2023 and 2022)
(in thousands)
(unaudited)

             
       Three months ended      Three months ended
    December 31, 2023   December 31, 2022
GAAP Net income   $ 21,637     $ 128,915  
Share-based compensation     6,179       6,025  
Amortization     2,123       2,505  
Transition expenses related to San Jose expansion project     57       1,788  
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting           44  
Changes in contingent consideration     (465 )      
Acquisition related     45        
Interest (income) expense, net           1,558  
Income tax expense (benefit)     2,546       (117,081 )
Non-GAAP Operating income   $ 32,122     $ 23,754  
                 

Reconciliation of GAAP to Non-GAAP Financial Data (FY 2023)
(in thousands)
(unaudited)

            Non-GAAP Adjustments          
            Share-based                
For the year ended December 31, 2023        GAAP        Compensation      Amortization      Other        Non-GAAP  
Net sales   $ 666,435                     $ 666,435  
Gross profit     285,059       4,913         232         290,204  
Gross margin     42.8   %                     43.5 %
Operating expenses     215,119       (23,645 )   (8,481 )   (2,363 )       180,630  
Operating income     69,940       28,558     8,481     2,595   ^     109,574  
Net income (loss)     (30,368 )     28,558     8,481     91,668   ^     98,339  
                                       
^   - See table below for additional details.
                                       

 Other Non-GAAP Adjustments (FY 2023)
(in thousands)
(unaudited)

       
For the year ended December 31, 2023
      
Acquisition related
$ 1,056  
Changes in contingent consideration
  701  
Transition expenses related to San Jose expansion project
  838  
Subtotal
  2,595  
Non-cash interest expense
  1,118  
Other (income) expense, net
  97,091  
Non-GAAP tax adjustment *
  (9,136 )
Total Other
$ 91,668  
         
*  - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.
         

Net Income per Common Share (FY 2023)
(in thousands, except per share amounts)
(unaudited)

    Year ended December 31, 2023
    GAAP   Non-GAAP
Numerator:           
Net income (loss)     $ (30,368 )      $ 98,339
Interest expense associated with convertible notes          4,768
Net income (loss) available to common shareholders  $ (30,368 )   $ 103,107
             
Denominator:           
Basic weighted average shares outstanding    53,769       53,769
Effect of potentially dilutive share-based awards          850
Dilutive effect of 2023 Convertible Senior Notes          21
Dilutive effect of 2025 Convertible Senior Notes          2,786
Dilutive effect of 2027 Convertible Senior Notes (1)          3,417
Diluted weighted average shares outstanding    53,769       60,843
             
Net income (loss) per common share:           
Basic  $ (0.56 )   $ 1.83
Diluted  $ (0.56 )   $ 1.69
               
(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 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     60,296     22,994     10,018     6,512   ^     99,820  
Net income     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  
Other (income) expense, net   (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 Net Income to Non-GAAP Operating Income (FY 2023 and 2022)
(in thousands)
(unaudited)

       Year ended      Year ended
    December 31, 2023   December 31, 2022
GAAP Net income (loss)   $ (30,368 )   $ 166,942  
Share-based compensation     28,558       22,994  
Amortization     8,481       10,018  
Acquisition related     1,056        
Changes in contingent consideration     701        
Transition expenses related to San Jose expansion project     838       6,202  
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting           310  
Interest (income) expense, net     1,187       9,311  
Other (income) expense, net     97,091        
Income tax expense (benefit)     2,030       (115,957 )
Non-GAAP Operating income (loss)   $ 109,574     $ 99,820  
                 

Reconciliation of GAAP to Non-GAAP Financial Data (Q1 2024)
(in millions, except per share amounts)
(unaudited)

                    Non-GAAP Adjustments                
Guidance for the three months ending                   Share-based                        
March 31, 2024   GAAP   Compensation   Amortization       Other        Non-GAAP
Net sales      $ 160        -      $ 180                             $ 160        -      $ 180  
Gross profit     68     -     78     1               69     -     79  
Gross margin     42 %   -     43 %                 43 %   -     44 %
Operating expenses     53     -     56     (6 )   (2 )         46     -     48  
Operating income     15     -     22     7     2           24     -     31  
Net income   $ 13     -   $ 20     7     2     (1 )   $ 21     -   $ 27  
                                             
Income per diluted common share   $ 0.22     -   $ 0.33                    $ 0.36     -   $ 0.46  
                                                     

Income per Diluted Common Share (Q1 2024)
(in millions, except per share amounts)
(unaudited)

Guidance for the three months ending March 31, 2024  GAAP   Non-GAAP
Numerator:                               
Net income     $ 13      -      $ 20      $ 21      -      $ 27
Interest expense associated with convertible notes                       
Net income available to common shareholders  $ 13   -   $ 20   $ 21   -   $ 27
                                 
Denominator:                               
Basic weighted average shares outstanding    56         56     56         56
Effect of potentially dilutive share-based awards    1         1     1         1
Dilutive effect of 2025 Convertible Senior Notes            1     1         1
Dilutive effect of 2027 Convertible Senior Notes (1)    2         2     1         1
Dilutive effect of 2029 Convertible Senior Notes    1         1     1         1
Diluted weighted average shares outstanding    60         61     60         60
                                 
Net income per common share:                               
Income per diluted common share  $ 0.22   -   $ 0.33   $ 0.36   -   $ 0.46
                                 
(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 2024)
(in millions)
(unaudited)

                 
Guidance for the three months ending March 31, 2024                         
GAAP Net income   $ 13   -   $ 20
Share-based compensation     7   -     7
Amortization     2   -     2
Income tax expense (benefit)     2   -     2
Non-GAAP Operating income   $ 24   -   $ 31

Note: Amounts may not calculate precisely due to rounding.


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Source: Veeco Instruments Inc.