Press Release Details

Veeco Reports Fourth Quarter and Fiscal Year 2017 Financial Results

02/12/2018

Fourth Quarter 2017 Highlights:

  • Revenues of $143.4 million, compared with $93.6 million in the same period last year
  • GAAP net loss of $5.6 million, or $0.12 loss per share
  • Non-GAAP net income of $9.1 million, or $0.19 per diluted share

Full Year 2017 Highlights:

  • Revenues of $484.8 million
  • GAAP net loss of $44.8 million, or $1.01 loss per share
  • Non-GAAP net income of $23.4 million, or $0.53 per diluted share

PLAINVIEW, N.Y., Feb. 12, 2018 (GLOBE NEWSWIRE) -- Veeco Instruments Inc. (Nasdaq:VECO) today announced financial results for its fourth quarter and fiscal year ended December 31, 2017.  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 ResultsQ4 ‘17Q4 ‘16 2017
 2016
Revenue$143.4$93.6$484.8$332.5
Net income (loss) ($5.6)($5.0)($44.8)($122.2)
Diluted earnings (loss) per share($0.12)($0.13)($1.01)($3.11)
      
  4th Quarter
Full Year
Non-GAAP ResultsQ4 ‘17Q4 ‘16 2017
 2016
Net income (loss)$9.1$3.8$23.4($11.3)
Operating income (loss)$10.5$3.3$31.3($8.5)
Diluted earnings (loss) per share$0.19$0.09$0.53($0.29)

"2017 was a transformational year for Veeco.  We diversified our revenue base through the acquisition of Ultratech, completed a major manufacturing consolidation, and ended the year with strong bookings and historically high backlog,” commented John R. Peeler, Chairman and Chief Executive Officer.  “Sales growth in the fourth quarter was driven primarily by shipment of our MOCVD and Laser Anneal systems, and we announced a large multi tool order for our EPIK® 868 from Focus Lightings for the production of high-volume light emitting diodes (LEDs).”

"Entering 2018, we expect to grow in all of our target  markets, and we are seeing particularly healthy demand  in  Advanced Packaging, MEMS and RF Filter and Front-End Semiconductor markets,” continued Mr. Peeler.

“Lastly, as we announced on February 8, 2018, I am pleased to report that we have reached a mutually agreed settlement of the pending patent disputes with AMEC and SGL Carbon, and all legal actions related to this matter will be dismissed or withdrawn. We are back to normal operations in our MOCVD business,” concluded Mr. Peeler.

Guidance and Outlook

The following guidance is provided for Veeco’s first quarter 2018:

  • Revenue is expected in the range of $140 million to $165 million
  • Non-GAAP operating income is expected in the range of $2 million to $10 million
  • GAAP earnings (loss) per share are expected in the range of ($0.50) to ($0.32)
  • Non-GAAP earnings (loss) per share are expected in the range of ($0.04) to $0.14

Please refer to the tables at the end of this press release for further details.

Conference Call Information

A conference call reviewing these results has been scheduled for today, February 12, 2018 starting at 5:00pm ET. To join the call, dial 1-800-239-9838 (toll free) or 1-323-794-2551 and use passcode 3939388. 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 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 (NASDAQ:VECO) is a leading manufacturer of innovative semiconductor process equipment. Our proven MOCVD, lithography, laser annealing, ion beam and single wafer etch & clean technologies play an integral role in producing LEDs for solid-state lighting and displays, and in the fabrication of advanced semiconductor devices. With equipment designed to maximize performance, yield and cost of ownership, Veeco holds technology leadership positions in all these served markets. To learn more about Veeco's innovative equipment and services, visit www.veeco.com.

Forward-looking Statements

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, 2016 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.

-financial tables attached-

Veeco Contacts: 
  
Investors:Media:
Anthony Bencivenga 516-677-0200 x1272David Pinto 408-325-6157
abencivenga@veeco.comdpinto@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, 
  
  2017  2016  2017  2016  
Net sales$143,432 $93,609 $484,756 $332,451  
Cost of sales 85,095  57,601  300,438  199,593  
Gross profit 58,337  36,008  184,318  132,858  
Operating expenses, net:             
Research and development 24,318  17,471  81,987  81,016  
Selling, general, and administrative 28,675  19,412  100,250  77,642  
Amortization of intangible assets 13,753  3,434  35,475  19,219  
Restructuring 2,246  1,646  11,851  5,640  
Acquisition costs 1,510    17,786    
Asset impairment   (142) 1,139  69,520  
Other, net (165) (660) (392) 223  
Total operating expenses, net 70,337  41,161  248,096  253,260  
Operating income (loss) (12,000) (5,153) (63,778) (120,402) 
Interest income (expense), net (4,753) 245  (17,122) 958  
Income (loss) before income taxes (16,753) (4,908) (80,900) (119,444) 
Income tax expense (benefit) (11,137) 90  (36,107) 2,766  
Net income (loss)$(5,616)$(4,998)$(44,793)$(122,210) 
              
Income (loss) per common share:     
Basic$(0.12)$(0.13)$(1.01)$(3.11) 
Diluted$(0.12)$(0.13)$(1.01)$(3.11) 
      
Weighted average number of shares:     
Basic 47,037  39,267  44,174  39,340  
Diluted 47,037  39,267  44,174  39,340  
      

 

  
Veeco Instruments Inc. and Subsidiaries 
Condensed Consolidated Balance Sheets 
(in thousands) 
    
 December 31,December 31, 
 2017 2016 
    
Assets    
Current assets:   
Cash and cash equivalents$279,736 $277,444 
Restricted cash 847   
Short-term investments 47,780  66,787 
Accounts receivable, net 98,866  58,020 
Inventories 120,266  77,063 
Deferred cost of sales 16,060  6,160 
Prepaid expenses and other current assets 33,437  16,034 
Total current assets 596,992  501,508 
Property, plant and equipment, net 85,058  60,646 
Intangible assets, net 369,843  58,378 
Goodwill 307,131  114,908 
Deferred income taxes 2,953  2,045 
Other assets 25,310  21,047 
Total assets$1,387,287 $758,532 
    
Liabilities and stockholders' equity    
Current liabilities:   
Accounts payable$50,318 $22,607 
Accrued expenses and other current liabilities 60,339  33,201 
Customer deposits and deferred revenue 108,953  85,022 
Income taxes payable 3,846  2,311 
Current portion of long-term debt   368 
Total current liabilities 223,456  143,509 
Deferred income taxes 36,845  13,199 
Long-term debt 275,630  826 
Other liabilities 10,643  6,403 
Total liabilities 546,574  163,937 
    
Total stockholders' equity 840,713  594,595 
    
Total liabilities and stockholders' equity$1,387,287 $758,532 
    

 

   
Veeco Instruments Inc. and Subsidiaries  
Reconciliation of GAAP to Non-GAAP Financial Data  
(in thousands, except per share amounts)  
(unaudited)  
          
   Non-GAAP Adjustments   
Three months ended December 31, 2017  GAAP
 Share-Based
Compensation

 Amortization Other
 Non-GAAP  
Net sales $ 143,432         $143,432   
Gross profit   58,337 607    537   59,481   
Gross margin   40.7%     41.5%  
Research and development   24,318 (971)     23,347   
Selling, general, and administrative and Other   28,510 (2,668)   (196)  25,646   
Net income (loss)   (5,616)4,420  13,753 (3,460)  9,097   
          
Income (loss) per common share:         
Basic $ (0.12)    $0.19   
Diluted   (0.12)     0.19   
Weighted average number of shares:         
Basic   47,037      47,109   
Diluted   47,037      47,208   
          
Veeco Instruments Inc. and Subsidiaries  
Other Non-GAAP Adjustments  
(in thousands)  
(unaudited)  
Three months ended December 31, 2017         
Restructuring       2,073   
Acquisition related       1,510   
Release of inventory fair value step-up associated with the Ultratech purchase accounting 440   
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 293   
Non-cash interest expense       2,805   
Non-GAAP tax adjustment *       (10,581)  
Total Other       (3,460)  
          
* - The 'with or without' method is utilized to determine the income tax effect of all Non-GAAP adjustments, as well as the exclusion of certain tax benefits attributed to the change in U.S. tax laws. 
          
These tables include financial measures adjusted for the impact of certain items; these financial measures are therefore not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These Non-GAAP financial measures exclude items such as: share-based compensation expense; charges relating to restructuring initiatives; non-cash asset impairments; certain other non-operating gains and losses; and acquisition-related items such as transaction costs, non-cash amortization of acquired intangible assets, and incremental transaction-related compensation.

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

 

   
Veeco Instruments Inc. and Subsidiaries  
Reconciliation of GAAP to Non-GAAP Financial Data  
(in thousands, except per share amounts)  
(unaudited)  
          
   Non-GAAP Adjustments   
Three months ended December 31, 2016 GAAP
 Share-based
Compensation
 Amortization Other Non-GAAP  
Net sales $93,609       $93,609   
Gross profit  36,008 316   362  36,686   
Gross margin  38.5%     39.2%  
Research and development  17,471 (292)    17,179   
Selling, general, and administrative and Other  18,752 (2,971)  (44) 15,737   
Net income (loss)  (4,998)3,579 3,434 1,740  3,755   
          
Income (loss) per common share:         
Basic $(0.13)    $0.09   
Diluted  (0.13)     0.09   
Weighted average number of shares:         
Basic  39,267      39,579   
Diluted  39,267      39,990   
          
Veeco Instruments Inc. and Subsidiaries  
Other Non-GAAP Adjustments  
(in thousands)  
(unaudited)  
Three months ended December 31, 2016         
Restructuring       1,646   
Acquisition related       44   
Asset impairment       (142)  
Accelerated depreciation       362   
Reclassification of cumulative translation gain from subsidiary liquidation    (429)  
Non-GAAP tax adjustment *       259   
Total Other       1,740   
          
* - The 'with or without' method is utilized to determine the income tax effect of all Non-GAAP adjustments.   
          
These tables include financial measures adjusted for the impact of certain items; these financial measures are therefore not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These Non-GAAP financial measures exclude items such as: share-based compensation expense; charges relating to restructuring initiatives; non-cash asset impairments; certain other non-operating gains and losses; and acquisition-related items such as transaction costs, non-cash amortization of acquired intangible assets, and incremental transaction-related compensation.

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

 

   
Veeco Instruments Inc. and Subsidiaries  
Reconciliation of GAAP Net Income (loss) to Non-GAAP Operating Income (loss)  
(in thousands)  
(unaudited)  
    Three months endedThree months ended  
     December 31, 2017   December 31, 2016    
GAAP Net income (loss)   $  (5,616)$  (4,998)  
Share-based compensation      4,420    3,579   
Amortization      13,753    3,434   
Restructuring      2,073    1,646   
Acquisition related      1,510    44   
Release of inventory fair value step-up associated with the Ultratech purchase accounting   440    -    
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting   293    -    
Asset impairment      -     (142)  
Accelerated depreciation      -     362   
Reclassification of cumulative translation gain from subsidiary liquidation    -     (429)  
Interest (income) expense      4,753    (245)  
Income tax expense (benefit)      (11,137)   90   
Non-GAAP Operating Income (loss)   $  10,489 $  3,341   
        
This table includes financial measures adjusted for the impact of certain items; these financial measures are therefore not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These Non-GAAP financial measures exclude items such as: share-based compensation expense; charges relating to restructuring initiatives; non-cash asset impairments; certain other non-operating gains and losses; and acquisition-related items such as transaction costs, non-cash amortization of acquired intangible assets, and incremental transaction-related compensation.

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

 

   
Veeco Instruments Inc. and Subsidiaries  
Reconciliation of GAAP to Non-GAAP Financial Data  
(in thousands, except per share amounts)  
(unaudited)  
          
   Non-GAAP Adjustments   
For the year ended December 31, 2017 GAAP
 Share-Based
Compensation
  Amortization Other  Non-GAAP  
Net sales $484,756         $484,756   
Gross profit  184,318 2,505    10,075   196,898   
Gross margin  38.0%     40.6%  
Research and development  81,987 (2,957)     79,030   
Selling, general, and administrative and Other  99,858 (12,851)   (466)  86,541   
Net income (loss)  (44,793)24,396  35,475 8,368   23,446   
          
Income (loss) per common share:         
Basic $(1.01)    $0.53   
Diluted  (1.01)     0.53   
Weighted average number of shares:         
Basic  44,174      44,247   
Diluted  44,174      44,486   
          
Veeco Instruments Inc. and Subsidiaries  
Other Non-GAAP Adjustments  
(in thousands)  
(unaudited)  
For the year ended December 31, 2017         
Restructuring       9,971   
Acquisition related       13,583   
Release of inventory fair value step-up associated with the Ultratech purchase accounting 9,664   
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 695   
Asset impairment    1,139   
Accelerated depreciation       180   
Non-cash interest expense       10,446   
Non-GAAP tax adjustment *       (37,310)  
Total Other       8,368   
          
* - The 'with or without' method is utilized to determine the income tax effect of all non-GAAP adjustments, as well as the exclusion of certain tax benefits attributed to the change in U.S. tax laws and the release of FIN48 reserves. 
          
These tables include financial measures adjusted for the impact of certain items; these financial measures are therefore not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These Non-GAAP financial measures exclude items such as: share-based compensation expense; charges relating to restructuring initiatives; non-cash asset impairments; certain other non-operating gains and losses; and acquisition-related items such as transaction costs, non-cash amortization of acquired intangible assets, and incremental transaction-related compensation.

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

 

   
Veeco Instruments Inc. and Subsidiaries  
Reconciliation of GAAP to Non-GAAP Financial Data  
(in thousands, except per share amounts)  
(unaudited)  
          
   Non-GAAP Adjustments   
For the year ended December 31, 2016 GAAP
 Share-Based
Compensation
  Amortization Other  Non-GAAP  
Net sales $332,451         $332,451   
Gross profit  132,858 1,956    716   135,530   
Gross margin  40.0%     40.8%  
Research and development  81,016 (3,324)     77,692   
Selling, general, and administrative and Other  77,866 (10,433)   (1,537)  65,896   
Net income (loss)  (122,210)15,713  19,219 75,954   (11,324)  
          
Income (loss) per common share:         
Basic $(3.11)    $(0.29)  
Diluted  (3.11)     (0.29)  
Weighted average number of shares:         
Basic  39,340      39,340   
Diluted  39,340      39,340   
          
Veeco Instruments Inc. and Subsidiaries  
Other Non-GAAP Adjustments  
(in thousands)  
(unaudited)  
For the year ended December 31, 2016         
Restructuring       5,640   
Acquisition related       232   
Asset impairment    69,520   
Accelerated depreciation 716   
Pension termination 1,305   
Reclassification of cumulative translation gain from subsidiary liquidation    (429)  
Non-GAAP tax adjustment *       (1,030)  
Total Other       75,954   
          
* - The 'with or without' method is utilized to determine the income tax effect of all non-GAAP adjustments.   
          
These tables include financial measures adjusted for the impact of certain items; these financial measures are therefore not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These Non-GAAP financial measures exclude items such as: share-based compensation expense; charges relating to restructuring initiatives; non-cash asset impairments; certain other non-operating gains and losses; and acquisition-related items such as transaction costs, non-cash amortization of acquired intangible assets, and incremental transaction-related compensation.

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

 

   
Veeco Instruments Inc. and Subsidiaries  
Reconciliation of GAAP Net Income (loss) to Non-GAAP Operating Income (loss)  
(in thousands)  
(unaudited)  
    Year endedYear ended  
    December 31, 2017 December 31, 2016   
GAAP Net income (loss)   $(44,793)$(122,210)  
Share-based compensation    24,396  15,713   
Amortization    35,475  19,219   
Restructuring    9,971  5,640   
Acquisition related    13,583  232   
Release of inventory fair value step-up associated with the Ultratech purchase accounting 9,664  -   
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 695  -   
Asset impairment    1,139  69,520   
Accelerated depreciation    180  716   
Pension termination    -  1,305   
Reclassification of cumulative translation gain from subsidiary liquidation  -  (429)  
Interest (income) expense    17,122  (958)  
Income tax expense (benefit)    (36,107) 2,766   
Non-GAAP Operating Income (loss)   $31,325 $(8,486)  
        
This table includes financial measures adjusted for the impact of certain items; these financial measures are therefore not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These Non-GAAP financial measures exclude items such as: share-based compensation expense; charges relating to restructuring initiatives; non-cash asset impairments; certain other non-operating gains and losses; and acquisition-related items such as transaction costs, non-cash amortization of acquired intangible assets, and incremental transaction-related compensation.

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

 

  
Veeco Instruments Inc. and Subsidiaries 
Reconciliation of GAAP to Non-GAAP Financial Data 
(in millions, except per share amounts) 
(unaudited) 
                     
       Non-GAAP Adjustments     
Guidance for the three months ending March 31, 2018
 GAAP Share-based
Compensation
  Amortization Other Non-GAAP 
Net sales  $140 $165         $140 $165  
                     
Gross profit 47  58  1     48  59  
Gross margin 33% 35%            34% 36% 
                     
Net income (loss)$(23)$(15) 4  13 4 $(2)$6  
                     
Income (loss) per diluted common share$(0.50)$(0.32)           $(0.04)$0.14  
Weighted average number of shares   47   47             47   47  
                     
Veeco Instruments Inc. and Subsidiaries 
Reconciliation of GAAP Net Income (loss) to Non-GAAP Operating Income (Loss) 
(in millions) 
(unaudited) 
                     
Guidance for the three months ending March 31, 2018                  
GAAP Net income (loss)           $(23)$(15) 
Share-based compensation             4  
Amortization            13  13  
Restructuring           1  
Acquisition related                1  
Interest expense, net                5  
Income tax expense (benefit)                1  
Non-GAAP Operating Income              $2 $10  
                     
Note:  Amounts may not calculate precisely due to rounding.                  
                     
  
These table includes financial measures adjusted for the impact of certain items; these financial measures are therefore not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These Non-GAAP financial measures exclude items such as: share-based compensation expense; charges relating to restructuring initiatives; non-cash asset impairments; certain other non-operating gains and losses; and acquisition-related items such as transaction costs, non-cash amortization of acquired intangible assets, and incremental transaction-related compensation.

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

 

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