Press Release Details

Veeco Reports Second Quarter 2015 Financial Results

08/03/2015

Company delivered top line growth while improving profitability:

  • Achieved revenue of $131.4 million, an increase of 38% compared with the same period last year
  • Increased Non-GAAP Adjusted EBITDA to $12.8 million or ~10% of revenue
  • Narrowed GAAP loss to ($0.21) per diluted share
  • Grew Non-GAAP earnings to $0.20 per diluted share
  • Generated $7.7 million in cash from operations

PLAINVIEW, N.Y.--(BUSINESS WIRE)-- Veeco Instruments Inc. (Nasdaq:VECO) announced financial results for its second fiscal quarter ended June 30, 2015. 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 ‘15     Q2 ‘14
Revenue     $ 131.4       $ 95.1  
Net income (loss)       ($8.4 )       ($15.2 )
Diluted earnings (loss) per share       ($0.21 )       ($0.39 )
       
Non-GAAP Results     Q2 ‘15     Q2 ‘14
Adjusted EBITDA     $ 12.8         ($4.1 )
Net income (loss)     $ 8.4         ($6.1 )
Diluted earnings (loss) per share     $ 0.20         ($0.16 )
 

“We delivered solid second quarter results, achieving financial performance in line with our expectations across all P&L guided metrics. Revenue grew by ~38% year-over-year and adjusted EBITDA increased to nearly 10% of revenue. These results illustrate our continued focus on driving growth and operational execution,” commented John R. Peeler, Chairman and Chief Executive Officer.

“Our top line growth has been fueled by the rapid adoption of our TurboDisc® EPIKTM700 MOCVD system. This latest generation product offers lower cost of ownership for our customers and improved margin contribution for Veeco, as compared with prior generation tools. We have now successfully demonstrated the tool's capabilities across multiple customers, which enabled us to begin recognizing revenue upon shipment towards the end of the second quarter.

“Our Precision Surface Processing (PSP) business is performing exceptionally well and demand for these products remains healthy. Our differentiated and highly flexible process technology is well established in the broader MEMS market and gaining momentum in the Advanced Packaging space,” Mr. Peeler concluded.

Guidance and Outlook

The following guidance is provided for Veeco’s third fiscal quarter 2015:

  • Revenue is expected to be in the range of $135 million to $160 million
  • Adjusted EBITDA is expected to be in the range of $14 million to $24 million
  • GAAP earnings (loss) per share are expected to be in the range of ($0.05) to $0.19
  • Non-GAAP earnings (loss) per share are expected to be in the range of $0.22 to $0.40

Please refer to the table 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, 2015 starting at 5:00pm ET. To join the call, dial 1-888-254-2798 (toll free) or 1-913-312-0966 and use passcode 5787629. The call will also be webcast live on the Veeco website at ir.veeco.com. A replay of the webcast will be made available on the Veeco website beginning at 8:00pm ET this evening. We will post an accompanying slide presentation to our website prior to the beginning of the call.

About Veeco

Veeco’s process equipment solutions enable the manufacture of LEDs, flexible OLED displays, power electronics, compound semiconductors, hard disk drives, semiconductors, MEMS and wireless chips. We are the leader in MOCVD, MBE, Ion Beam, Wet Etch single wafer processing and other advanced thin film process technologies. Our high performance systems drive innovation in energy efficiency, consumer electronics and network storage and allow our customers to maximize productivity and achieve lower cost of ownership. For information on our company, products and worldwide service and support, please visit www.veeco.com.

To the extent that this news release discusses expectations or otherwise makes statements about the future, such statements are forward-looking and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These factors include the risks discussed in the Business Description and Management's Discussion and Analysis sections of Veeco's Annual Report on Form 10-K for the year ended December 31, 2014 and in our subsequent quarterly reports on Form 10-Q, current reports on Form 8-K and press releases. Veeco does not undertake any obligation to update any forward-looking statements to reflect future events or circumstances after the date of such statements.

Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
 
  Three months ended June 30,   Six months ended June 30,
2015   2014 2015   2014
Net sales $ 131,410 $ 95,122 $ 229,751 $ 185,963
Cost of sales   82,341     64,449     145,545     121,513  
Gross profit   49,069     30,673     84,206     64,450  
Operating expenses, net:
Selling, general, and administrative 24,365 21,891 47,247 43,558
Research and development 20,119 21,011 38,704 40,779
Amortization 7,979 2,899 15,941 5,802
Restructuring 683 801 3,040 1,193
Asset impairment - - 126 -
Changes in contingent consideration - - - (29,368 )
Other, net   (51 )   (158 )   (1,002 )   (370 )
Total operating expenses, net   53,095     46,444     104,056     61,594  
Operating income (loss) (4,026 ) (15,771 ) (19,850 ) 2,856
Interest income, net   119     72     280     236  
Income (loss) before income taxes (3,907 ) (15,699 ) (19,570 ) 3,092
Income tax expense (benefit)   4,479     (488 )   7,926     (857 )
Net income (loss) $ (8,386 ) $ (15,211 ) $ (27,496 ) $ 3,949  
 
Income (loss) per common share:
Basic $ (0.21 ) $ (0.39 ) $ (0.69 ) $ 0.10
Diluted $ (0.21 ) $ (0.39 ) $ (0.69 ) $ 0.10
 
Weighted average number of shares:
Basic 39,693 39,379 39,666 39,275
Diluted 39,693 39,379 39,666 40,061
 
Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
 
 
  June 30, 2015   December 31, 2014
(unaudited)
Assets
Current assets:
Cash and cash equivalents $

313,853

 

$

270,811

 

Short-term investments 82,397 120,572
Restricted cash - 539
Accounts receivable, net 83,098 60,085
Inventories 63,564 61,471
Deferred cost of sales 24,384 5,076
Prepaid expenses and other current assets 25,976 23,132
Assets held for sale 6,000 6,000
Deferred income taxes   6,479     7,976  
Total current assets 605,751 555,662
Property, plant and equipment, net 80,002 78,752
Goodwill 115,256 114,959
Deferred income taxes 1,180 1,180
Intangible assets, net 143,367 159,308
Other assets   20,325     19,594  
Total assets $ 965,881   $ 929,455  
 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 46,159 $ 18,111
Accrued expenses and other current liabilities 39,343 48,418
Customer deposits and deferred revenue 128,553 96,004
Income taxes payable 7,750 5,441
Deferred income taxes 120 120
Current portion of long-term debt   327     314  
Total current liabilities 222,252 168,408
Deferred income taxes 15,779 16,397
Long-term debt 1,367 1,533
Other liabilities   6,183     4,185  
Total liabilities 245,581 190,523
 
Total stockholders' equity   720,300     738,932  
 
Total liabilities and stockholders' equity $ 965,881   $ 929,455  
 
Veeco Instruments Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Data
(In thousands, except per share data)
(Unaudited)
 
    Non-GAAP Adjustments  

Share-based

 

Acquisition

 
Three months ended June 30, 2015 GAAP

Compensation

Related

Other Non-GAAP
Net sales $ 131,410 $ - $ - $ - $ 131,410
Cost of sales   82,341     (713 )   -     -     81,628  
Gross profit 49,069 713 - - 49,782
Gross margin 37.3 % 37.9 %
Operating expenses, net:
Selling, general, and administrative 24,365 (3,112 ) (188 ) - 21,065
Research and development 20,119 (1,096 ) - - 19,023
Amortization 7,979 - (7,979 ) - -
Restructuring 683 - - (683 ) -
Other, net   (51 )   -     -     -     (51 )
Total operating expenses, net   53,095     (4,208 )   (8,167 )   (683 )   40,037  
Operating income (loss) (4,026 ) 4,921 8,167 683 9,745
Interest income, net   119     -     -     -     119  
Income (loss) before income taxes (3,907 ) 4,921 8,167 683 9,864
Income tax expense (benefit)   4,479     -     -     (2,996 )   1,483   *
Net income (loss) $ (8,386 ) $ 4,921   $ 8,167   $ 3,679   $ 8,381  
 
Income (loss) per common share:
Basic earnings per share $ (0.21 ) $ 0.21
Diluted earnings per share $ (0.21 ) $ 0.20
 
Weighted average number of shares:
Basic shares 39,693 40,790
Diluted shares 39,693 40,960
 
Non-GAAP operating income $ 9,745
Depreciation   3,022  
Adjusted EBITDA $ 12,767  
Note: Amounts may not calculate precisely due to rounding.
 
* The 'with or without' method is utilized to determine the income tax effect of the non-GAAP adjustments.
 

This table includes financial measures adjusted for the impact of certain items; these financial measures are therefore not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These Non-GAAP financial measures exclude items such as: share-based compensation expense; nonrecurring charges relating to restructuring initiatives, non-cash asset impairments, certain other non-operating gains and losses, and acquisition-related items such as one-time transaction costs, non-cash amortization of acquired intangible assets, incremental nonrecurring compensation, and the stepped-up cost of sales associated with the purchase accounting of acquired inventory.

 

These Non-GAAP financial measures may be different from Non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. By excluding these items, Non-GAAP financial measures are intended to facilitate meaningful comparisons to historical operating results, competitors' operating results, and estimates made by securities analysts. Management is evaluated on key performance metrics including adjusted EBITDA, which is used to determine management incentive compensation as well as forecast future periods. These Non-GAAP financial measures may be useful to investors in allowing for greater transparency of supplemental information used by management in its financial and operational decision-making. In addition, similar Non-GAAP financial measures have historically been reported to investors; the inclusion of comparable numbers provides consistency in financial reporting. Investors are encouraged to review the reconciliation of the Non-GAAP financial measures used in this news release to their most directly comparable GAAP financial measures.

 
Veeco Instruments Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Data
(In thousands, except per share data)
(Unaudited)
 
    Non-GAAP Adjustments  

Share-based

 

Acquisition

 
Three months ended June 30, 2014 GAAP

Compensation

Related

Other Non-GAAP
Net sales $ 95,122 $ - $ - $ - $ 95,122
Cost of sales   64,449     (620 )   -     -     63,829  
Gross profit 30,673 620 - - 31,293
Gross margin 32.2 % 32.9 %
Operating expenses:
Selling, general, and administrative 21,891 (3,325 ) - - 18,566
Research and development 21,011 (1,147 ) - - 19,864
Amortization 2,899 - (2,899 ) - -
Restructuring 801 - - (801 ) -
Other, net   (158 )   -     -     -     (158 )
Total operating expenses, net   46,444     (4,471 )   (2,899 )   (801 )   38,273  
Operating income (loss) (15,771 ) 5,091 2,899 801 (6,980 )
Interest income, net   72     -     -     -     72  
Income (loss) before income taxes (15,699 ) 5,091 2,899 801 (6,908 )
Income tax provision (benefit)   (488 )   -     -     (312 )   (800 ) *
Net income (loss) $ (15,211 ) $ 5,091   $ 2,899   $ 1,113   $ (6,108 )
 
Income (loss) per common share:
Basic earnings per share $ (0.39 ) $ (0.16 )
Diluted earnings per share $ (0.39 ) $ (0.16 )
 
Weighted average number of shares:
Basic shares 39,379 39,379
Diluted shares 39,379 39,379
 
Non-GAAP operating income $ (6,980 )
Depreciation   2,930  
Adjusted EBITDA $ (4,050 )
Note: Amounts may not calculate precisely due to rounding.
 
* The 'with or without' method is utilized to determine the income tax effect of the non-GAAP adjustments.
 

This table includes financial measures adjusted for the impact of certain items; these financial measures are therefore not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These Non-GAAP financial measures exclude items such as: share-based compensation expense; nonrecurring charges relating to restructuring initiatives, non-cash asset impairments, certain other non-operating gains and losses, and acquisition-related items such as one-time transaction costs, non-cash amortization of acquired intangible assets, incremental nonrecurring compensation, and the stepped-up cost of sales associated with the purchase accounting of acquired inventory.

 

These Non-GAAP financial measures may be different from Non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. By excluding these items, Non-GAAP financial measures are intended to facilitate meaningful comparisons to historical operating results, competitors' operating results, and estimates made by securities analysts. Management is evaluated on key performance metrics including adjusted EBITDA, which is used to determine management incentive compensation as well as forecast future periods. These Non-GAAP financial measures may be useful to investors in allowing for greater transparency of supplemental information used by management in its financial and operational decision-making. In addition, similar Non-GAAP financial measures have historically been reported to investors; the inclusion of comparable numbers provides consistency in financial reporting. Investors are encouraged to review the reconciliation of the Non-GAAP financial measures used in this news release to their most directly comparable GAAP financial measures.

 
Veeco Instruments Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Data
(In millions, except per share data)
(Unaudited)
 
    Non-GAAP Adjustments

Share-based

 

Acquisition

 
Guidance for the three months ended September 30, 2015 GAAP

Compensation

Related

Other Non-GAAP
Net sales $ 135   -   $ 160 $

-

 

$

-

 

$ - $ 135   -   $ 160
 
Gross profit 50 - 62 1 - - 51 - 63
Gross margin 37.0 % - 39.0 % 37.5 % - 39.5 %
 
 
Operating income (1 ) - 9 6 6 - 11 - 21
Depreciation   3     3  
Adjusted EBITDA $ 14   - $ 24  
 
 
Net income (loss) (2 ) - 8 6 6 (1 ) - (3 ) * 9 - 17
 
Income (loss) per diluted common share $ (0.05 ) - $ 0.19   $ 0.22   - $ 0.40  
Weighted average number of shares 40 41 41 41
Note: Amounts may not calculate precisely due to rounding.
 
* Primarily relates to the income tax effect of the non-GAAP adjustments utilizing the 'with or without' method.
 

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; nonrecurring charges relating to restructuring initiatives, non-cash asset impairments, certain other non-operating gains and losses, and acquisition-related items such as one-time transaction costs, non-cash amortization of acquired intangible assets, incremental nonrecurring compensation, and the stepped-up cost of sales associated with the purchase accounting of acquired inventory.

 

These Non-GAAP financial measures may be different from Non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. By excluding these items, Non-GAAP financial measures are intended to facilitate meaningful comparisons to historical operating results, competitors' operating results, and estimates made by securities analysts. Management is evaluated on key performance metrics including adjusted EBITDA, which is used to determine management incentive compensation as well as forecast future periods. These Non-GAAP financial measures may be useful to investors in allowing for greater transparency of supplemental information used by management in its financial and operational decision-making. In addition, similar Non-GAAP financial measures have historically been reported to investors; the inclusion of comparable numbers provides consistency in financial reporting. Investors are encouraged to review the reconciliation of the Non-GAAP financial measures used in this news release to their most directly comparable GAAP financial measures.

Source: Veeco Instruments Inc.

Veeco:

Investors:

Shanye Hudson, 516-677-0200, ext. 1272

shudson@veeco.com

or

Media:

Jeffrey Pina, 516-677-0200, ext. 1222

jpina@veeco.com

Email Alerts

Email Address *
Mailing Lists *






 
Enter the code shown above.

Contact US

Investor Relations

(516) 677-0200 x1272

investorrelations@veeco.com