Press Release Details

Veeco Reports Third Quarter 2019 Financial Results

11/04/2019

Third Quarter 2019 Highlights:

  • Revenues of $109.0 million, compared with $126.8 million in the same period last year
  • GAAP net loss of $11.8 million, or $0.25 loss per diluted share
  • Non-GAAP net income of $2.6 million, or $0.05 per diluted share

PLAINVIEW, N.Y., Nov. 04, 2019 (GLOBE NEWSWIRE) -- Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its third quarter ended September 30, 2019. 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   Q3 ’19   Q3 ’18
Revenue   $ 109.0     $ 126.8  
Net income (loss)   $ (11.8 )   $ (9.0 )
Diluted earnings (loss) per share   $ (0.25 )   $ (0.19 )


Non-GAAP Results   Q3 ’19   Q3 ’18
 
Net income (loss)   $ 2.6   $ 5.3  
Operating income (loss)   $ 4.0   $ 8.0  
Diluted earnings (loss) per share   $ 0.05   $ 0.11  
               

“Veeco executed well in Q3 with revenue and EPS above the midpoint of our guided range.  Our gross margin exceeded our guidance and the company returned to profitability on a non-GAAP basis,” commented William J. Miller, Ph.D., Chief Executive Officer. “We continue to experience demand for our EUV mask blank products and have shipped our second production system. This shipment, combined with revenue from multiple LSA systems, drove strong Front End Semiconductor sales. Additionally, shipments to our data storage customers remained solid as they continued to invest in technology and capacity.”

Guidance and Outlook

The following guidance is provided for Veeco’s fourth quarter 2019:

  • Revenue is expected in the range of $100 million to $120 million
  • GAAP loss per share is expected in the range of ($0.32) to ($0.10)
  • Non-GAAP earnings (loss) per share are expected in the range of $(0.03) to $0.18

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, November 4, 2019 starting at 5:00pm ET. To join the call, dial 1-888-394-8218 (toll free) or 1-646-828-8193 and use passcode 9227350. 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 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

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, 2018 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 Contacts:
   
Investors: Media:
Anthony Bencivenga (516) 252-1438 Kevin Long (516) 714-3978
abencivenga@veeco.com  klong@veeco.com 


 
Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
 
  Three months ended September 30,   Nine months ended September 30,
  2019     2018     2019     2018  
Net sales $ 108,954     $ 126,757     $ 306,147     $ 443,110  
Cost of sales   66,731       80,372       192,924       284,651  
Gross profit   42,223       46,385       113,223       158,459  
Operating expenses, net:                      
Research and development   22,639       23,544       68,901       72,793  
Selling, general, and administrative   20,962       20,186       60,620       70,842  
Amortization of intangible assets   4,312       4,183       12,773       28,102  
Restructuring   1,828       2,057       3,874       7,669  
Acquisition costs         249             2,906  
Asset impairment                     252,343  
Other, net   (153 )     39       (232 )     325  
Total operating expenses, net   49,588       50,258       145,936       434,980  
Operating income (loss)   (7,365 )     (3,873 )     (32,713 )     (276,521 )
Interest expense, net   (4,330 )     (4,779 )     (12,742 )     (13,847 )
Income (loss) before income taxes   (11,695 )     (8,652 )     (45,455 )     (290,368 )
Income tax expense (benefit)   72       301       407       (27,954 )
Net income (loss) $ (11,767 )   $ (8,953 )   $ (45,862 )   $ (262,414 )
                       
Income (loss) per common share:                      
Basic $ (0.25 )   $ (0.19 )   $ (0.97 )   $ (5.55 )
Diluted $ (0.25 )   $ (0.19 )   $ (0.97 )   $ (5.55 )
                       
Weighted average number of shares:                      
Basic   47,489       46,982       47,361       47,283  
Diluted   47,489       46,982       47,361       47,283  
                               


 
Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
 
  September 30,   December 31,
  2019   2018
  (unaudited)      
Assets          
Current assets:          
Cash and cash equivalents $ 135,259   $ 212,273
Restricted cash   687     809
Short-term investments   95,672     48,189
Accounts receivable, net   72,731     66,808
Contract assets   20,782     10,397
Inventories   135,190     156,311
Deferred cost of sales   2,198     3,072
Prepaid expenses and other current assets   23,762     22,221
Total current assets   486,281     520,080
Property, plant and equipment, net   77,801     80,284
Operating lease right-of-use assets   10,472    
Intangible assets, net   72,376     85,149
Goodwill   184,302     184,302
Deferred income taxes   1,872     1,869
Other assets   29,172     29,132
Total assets $ 862,276   $ 900,816
           
Liabilities and stockholders’ equity          
Current liabilities:          
Accounts payable $ 34,702   $ 39,611
Accrued expenses and other current liabilities   40,641     46,450
Customer deposits and deferred revenue   66,031     72,736
Income taxes payable   663     1,256
Total current liabilities   142,037     160,053
Deferred income taxes   5,713     5,690
Long-term debt   296,810     287,392
Operating lease long-term liabilities   6,066    
Other liabilities   9,180     9,906
Total liabilities   459,806     463,041
           
Total stockholders’ equity   402,470     437,775
           
Total liabilities and stockholders’ equity $ 862,276   $ 900,816
           


 
Veeco Instruments Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Data
(in thousands, except per share amounts)
(unaudited)
 
          Non-GAAP Adjustments        
          Share-Based                
Three months ended September 30, 2019   GAAP   Compensation   Amortization   Other   Non-GAAP  
Net sales   $ 108,954                 $ 108,954  
Gross profit     42,223     383         1,316       43,922  
Gross margin     38.8   %               40.3 %
Operating expenses     49,588     (3,400 )   (4,312 )   (1,920 )     39,956  
Operating income (loss)     (7,365 )   3,783     4,312     3,236   ^   3,966  
Net income (loss)     (11,767 )   3,783     4,312     6,302   ^   2,630  
                           
Income (loss) per common share:                          
Basic   $ (0.25 )               $ 0.06  
Diluted     (0.25 )                 0.05  
Weighted average number of shares:                          
Basic     47,489                   47,495  
Diluted     47,489                   47,898  
____________________________
^  - See table below for additional details.



 
Veeco Instruments Inc. and Subsidiaries
Other Non-GAAP Adjustments
(in thousands)
(unaudited)
 
Three months ended September 30, 2019    
Restructuring   1,828  
Release of inventory fair value step-up associated with the Ultratech purchase accounting   1,270  
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting   138  
Subtotal   3,236  
Non-cash interest expense   3,199  
Non-GAAP tax adjustment *   (133 )
Total Other   6,302  
____________________________
*  - 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 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.

 
Veeco Instruments Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Data
(in thousands, except per share amounts)
(unaudited)
 
          Non-GAAP Adjustments        
          Share-based              
Three months ended September 30, 2018     GAAP   Compensation   Amortization   Other   Non-GAAP  
Net sales   $ 126,757                 $ 126,757  
Gross profit     46,385     513         1,489       48,387  
Gross margin     36.6   %               38.2 %
Operating expenses     50,258     (2,766 )   (4,183 )   (2,892 )     40,417  
Operating income (loss)     (3,873 )   3,279     4,183     4,381   ^   7,970  
Net income (loss)     (8,953 )   3,279     4,183     6,813   ^   5,322  
                           
Income (loss) per common share:                          
Basic   $ (0.19 )               $ 0.11  
Diluted     (0.19 )                 0.11  
Weighted average number of shares:                          
Basic     46,982                   46,984  
Diluted     46,982                   47,000  
____________________________
^  - See table below for additional details.
 



 
Veeco Instruments Inc. and Subsidiaries
Other Non-GAAP Adjustments
(in thousands)
(unaudited)
 
Three months ended September 30, 2018    
Restructuring   1,890  
Acquisition related   249  
Release of inventory fair value step-up associated with the Ultratech purchase accounting   1,411  
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting   236  
Accelerated depreciation   595  
Subtotal   4,381  
Non-cash interest expense   2,968  
Non-GAAP tax adjustment *   (536 )
Total Other   6,813  
____________________________
*   - 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 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.

 
Veeco Instruments Inc. and Subsidiaries
Reconciliation of GAAP Net Income (loss) to Non-GAAP Operating Income (loss)
(in thousands)
(unaudited)
 
  Three months ended   Three months ended
  September 30, 2019   September 30, 2018
GAAP Net income (loss) $  (11,767 )   $  (8,953 )
Share-based compensation    3,783        3,279  
Amortization    4,312        4,183  
Restructuring    1,828        1,890  
Acquisition related    —        249  
Release of inventory fair value step-up associated with the Ultratech purchase accounting    1,270        1,411  
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting    138        236  
Accelerated depreciation    —        595  
Interest (income) expense, net    4,330        4,779  
Income tax expense (benefit)    72        301  
Non-GAAP Operating income (loss) $  3,966     $  7,970  
               

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 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.

 
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                   Share-based                          
December 31, 2019   GAAP   Compensation   Amortization     Other     Non-GAAP  
Net sales   $ 100     -   $ 120                 $ 100     -   $ 120    
Gross profit     38     -     48     1         39     -     49    
Gross margin     39 %   -     41 %                 39 %   -     41 %  
Operating expenses       ~$48       3   4   2       ~$39      
Operating income (loss)     (10 )   -         4   4   2         -     10    
Net income (loss)   $ (15 )   -   $ (5 )   4   4   5   $ (2 )   -   $ 8    
                                               
Income (loss) per diluted common share   $ (0.32 )   -   $ (0.10 )               $ (0.03 )   -   $ 0.18    
Weighted average number of shares     48           48                   48           48    
                                                       


 
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 December 31, 2019                
GAAP Net income (loss)   $ (15 )   -   $ (5 )
Share-based compensation     4     -     4  
Amortization     4     -     4  
Restructuring     2     -     2  
Interest expense, net     4     -     4  
Other     1     -     1  
Non-GAAP Operating income (loss)   $     -   $ 10  
                     

Note: Amounts may not calculate precisely due to rounding.

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 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.

veecologo.JPG

Source: Veeco Instruments Inc.

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