News

News

Veeco Reports Second Quarter 2012 Financial Results

July 26, 2012

PLAINVIEW, N.Y.--(BUSINESS WIRE)--Jul. 26, 2012-- Veeco Instruments Inc. (Nasdaq: VECO) announced its financial results for the second quarter ended June 30, 2012. Veeco reports its results on a U.S. generally accepted accounting principles (“GAAP”) basis, and also provides results excluding certain items. Please refer to the attached table for details of the reconciliation between GAAP operating results and Non-GAAP operating results. All results presented herein are for Veeco’s “Continuing Operations.”

GAAP Results ($M except EPS)

        Q2 ‘12      

Q2 ‘11

Revenues       $ 136.5       $ 264.8
Net income      

$

11.0

      $ 56.3
EPS (diluted)       $ 0.28       $ 1.31
           
 

Non-GAAP Results ($M except EPS)

        Q2 ‘12       Q2 ‘11
Net income       $ 14.5       $ 63.4
EPS (diluted)       $ 0.37      

$

1.47

Second Quarter 2012 Results

John R. Peeler, Veeco’s Chairman and Chief Executive Officer, commented, “Veeco continues to deliver solid results in a soft market. Second quarter revenue was $137 million, and adjusted EBITA and non-GAAP earnings per share were $20 million and $0.37, respectively, with gross margins of 45%. Veeco generated about $19 million in cash flow from operations, ending the quarter with $540 million in cash and short term investments.” Second quarter LED & Solar revenues were $87 million, including $75 million in MOCVD and $12 million in MBE. Data Storage revenues were $50 million.

“As anticipated, we experienced a challenging bookings environment in Q2, with total orders of approximately $103 million,” continued Mr. Peeler. “Across our markets, macro-economic concerns and weakness in TV, PC and consumer electronics sales are delaying customers’ capex purchases.” Veeco’s LED & Solar orders totaled $77 million, with MOCVD flat sequentially at $70 million and MBE declining 50% to $7 million. Data Storage bookings remained weak at $25 million. Veeco’s book-to-bill ratio was 0.75 to 1 and quarter-end backlog, after a $30 million adjustment, was $241 million.

Third Quarter 2012 Guidance & Outlook

Veeco’s third quarter 2012 revenue is currently forecasted to be between $120 million and $140 million. Earnings per share are currently forecasted to be between $0.12 to $0.29 on a GAAP basis, and $0.22 to $0.38 on a non - GAAP basis. Please refer to the attached financial table for more details.

Mr. Peeler commented, “We are executing on our plan to deliver solid profitability in a down revenue year while investing for future growth. At the mid-point of the year, we are tightening our 2012 revenue guidance to between $520 and $560 million. Assuming macro-economic conditions do not worsen, we currently anticipate a gradual order recovery in the second half of 2012.”

Mr. Peeler continued, “MOCVD orders appear to be bumping along the bottom and we have not yet seen a meaningful inflection in customer buying. However, utilization rates are up at key customer facilities in China, Taiwan and Korea, and we have seen a pick-up in quoting activity as customers plan future capacity expansions to ensure their position in LED lighting for 2013 and beyond. We continue to win in the market due to our low cost of ownership solutions that drive customers’ yield and productivity, most recently through our new TurboDisc® ‘M’ and ‘HP’ product suite.”

Conference Call Information

A conference call reviewing these results has been scheduled for 5:00pm ET today at 1-877-419-6594 (toll free) or 1-719-325-4768 using passcode 4807787 . The call will also be webcast live on the Veeco website at www.veeco.com . A replay of the call will be available beginning at 8:00pm ET tonight through midnight on August 9, 2012 at 888-203-1112 or 719-457-0820, using passcode 4807787 , or on the Veeco website. Please follow along with our slide presentation also posted on the website.

About Veeco

Veeco’s process equipment solutions enable the manufacture of LEDs, power electronics, hard drives, MEMS and wireless chips. We are the market leader in MOCVD, MBE, Ion Beam 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, 2011 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 Income
(In thousands, except per share data)
(Unaudited)
       
Three months ended Six months ended
June 30, June 30,
2012 2011 2012 2011
 
Net sales $ 136,547 $ 264,815 $ 276,456 $ 519,491
Cost of sales   75,293     129,466     149,934     253,179  
Gross profit 61,254 135,349 126,522 266,312
 
Operating expenses (income):
Selling, general and administrative 20,893 27,461 40,666 50,397
Research and development 23,910 23,652 47,216 43,523
Amortization 1,185 1,334 2,400 2,242
Restructuring - - 63 -
Other, net   146     (68 )   111     (28 )
Total operating expenses   46,134     52,379     90,456     96,134  
 
Operating income 15,120 82,970 36,066 170,178
 
Interest (income) expense, net (329 ) 86 (532 ) 1,385
Loss on extinguishment of debt   -     3,045     -     3,349  
 
Income from continuing operations before income taxes 15,449 79,839 36,598 165,444
Income tax provision   4,438     23,521     9,125     51,147  
Income from continuing operations   11,011     56,318     27,473     114,297  
 
Income (loss) from discontinued operations, net of tax 807 (37,112 ) 757 (42,449 )
       
Net income $ 11,818   $ 19,206   $ 28,230   $ 71,848  
 
Income (loss) per common share:
Basic:
Continuing operations $ 0.29 $ 1.37 $ 0.72 $ 2.83
Discontinued operations   0.02     (0.90 )   0.02     (1.05 )
Income $ 0.31   $ 0.47   $ 0.74   $ 1.78  
 
Diluted:
Continuing operations $ 0.28 $ 1.31 $ 0.71 $ 2.67
Discontinued operations   0.02     (0.86 )   0.02     (0.99 )
Income $ 0.30   $ 0.45   $ 0.73   $ 1.68  
 
Weighted average shares outstanding:
Basic 38,370 40,998 38,315 40,433
Diluted 38,988 43,002 38,925 42,780
Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
   
June 30, December 31,
2012 2011
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 317,047 $ 217,922
Short-term investments 221,832 273,591
Restricted cash 851 577
Accounts receivable, net 95,125 95,038
Inventories, net 90,729 113,434
Prepaid expenses and other current assets 28,577 40,756
Assets of discontinued segment held for sale - 2,341
Deferred income taxes, current   10,298   10,885
Total current assets 764,459 754,544
 
Property, plant and equipment, net 97,068 86,067
Goodwill 55,828 55,828
Other assets, net   32,620   39,624
Total assets $ 949,975 $ 936,063
 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 32,652 $ 40,398
Accrued expenses and other current liabilities 95,168 107,656
Deferred profit 10,301 10,275
Income taxes payable 1,350 3,532
Liabilities of discontinued segment held for sale 5,359 5,359
Current portion of long-term debt   258   248
Total current liabilities 145,088 167,468
 
Deferred income taxes 5,023 5,029
Long-term debt 2,275 2,406
Other liabilities   324   640
Total liabilities 152,710 175,543
 
Equity 797,265 760,520
   
Total liabilities and equity $ 949,975 $ 936,063
Veeco Instruments Inc. and Subsidiaries
Reconciliation of GAAP to non-GAAP results
(In thousands, except per share data)
(Unaudited)
 
Three months ended Six months ended
June 30, June 30,
2012 2011 2012 2011
Adjusted EBITA
 
Operating income $ 15,120 $ 82,970 $ 36,066 $ 170,178
 
Adjustments:
 
Amortization 1,185 1,334 2,400 2,242
Equity-based compensation 4,014 3,717 7,144 6,517
Restructuring   -     -     63   (1 )   -  
 
Earnings from continuing operations before interest, income taxes and amortization excluding certain items ("Adjusted EBITA")
$ 20,319   $ 88,021   $ 45,673   $ 178,937  
 
Non-GAAP Net Income
 
Net income from continuing operations (GAAP basis) $ 11,011 $ 56,318 $ 27,473 $ 114,297
 
Non-GAAP adjustments:
 
Amortization 1,185 1,334 2,400 2,242
Equity-based compensation 4,014 3,717 7,144 6,517
Restructuring - - 63 (1 ) -
Loss on extinguishment of debt - 3,045 - 3,349
Non-cash portion of interest expense - 490 (2 ) - 1,259 (2 )
Income tax effect of non-GAAP adjustments   (1,718 ) (3 )   (1,492 ) (3 )   (3,628 ) (3 )   (2,943 ) (3 )
 
Non-GAAP Net Income $ 14,492   $ 63,412   $ 33,452   $ 124,721  
 
Non-GAAP earnings per diluted share excluding certain items ("Non-GAAP EPS") $ 0.37   $ 1.47   $ 0.86   $ 2.92  
 
Diluted weighted average shares outstanding 38,988 43,002 38,925 42,780
 
 
(1) During the first quarter of 2012, we recorded restructuring charges totaling $0.1 million related to a company-wide reorganization executed during the second half of 2011.
 
(2) Adjustment to exclude non-cash interest expense on convertible subordinated notes.
 
(3) The Company utilized the with and without method to determine the income tax effect of non-GAAP adjustments.

NOTE - This reconciliation is not in accordance with, or an alternative method for, generally accepted accounting principles in the United States, and may be different from similar measures presented by other companies. Management of the Company evaluates performance of its business units based on adjusted EBITA, which is the primary indicator used to plan and forecast future periods. The presentation of this financial measure facilitates meaningful comparison with prior periods, as management of the Company believes adjusted EBITA reports baseline performance and thus provides useful information.

Veeco Instruments Inc. and Subsidiaries
Reconciliation of GAAP to non-GAAP results
(In thousands, except per share data)
(Unaudited)
 

Guidance for
the three months ending
September 30, 2012

LOW HIGH
Adjusted EBITA
 
Operating income $ 6,317 $ 15,103
 
Adjustments:
 
Amortization 1,264 1,264
Equity-based compensation   4,238     4,238  
 
Earnings from continuing operations before interest, income taxes and amortization excluding certain items ("Adjusted EBITA")
$ 11,819   $ 20,605  
 
Non-GAAP Net Income
 
Net income from continuing operations (GAAP basis) $ 4,781 $ 11,411
 
Non-GAAP adjustments:
 
Amortization 1,264 1,264
Equity-based compensation 4,238 4,238
Income tax effect of non-GAAP adjustments   (1,708 ) (1 )   (1,973 ) (1 )
 
Non-GAAP Net Income $ 8,575   $ 14,940  
 
Non-GAAP earnings per diluted share excluding certain items ("Non-GAAP EPS") $ 0.22   $ 0.38  
 
Diluted weighted average shares outstanding 39,000 39,000
 
 
(1) The Company utilizes the with and without method to determine the income tax effect of non-GAAP adjustments.

NOTE - This reconciliation is not in accordance with, or an alternative method for, generally accepted accounting principles in the United States, and may be different from similar measures presented by other companies. Management of the Company evaluates performance of its business units based on adjusted EBITA, which is the primary indicator used to plan and forecast future periods. The presentation of this financial measure facilitates meaningful comparison with prior periods, as management of the Company believes adjusted EBITA reports baseline performance and thus provides useful information.

Veeco Instruments Inc. and Subsidiaries

Segment Bookings, Revenues, and Reconciliation

of Operating Income (Loss) to Adjusted EBITA (Loss)

(In thousands)

(Unaudited)

                 
  Three months ended Six months ended
June 30, June 30,
    2012   2011 2012   2011
LED & Solar    
Bookings $ 77,294 $ 273,282 $ 161,923 $ 471,527
 
Revenues $ 86,778 $ 219,135 $ 182,352 $ 433,833
 
Operating income $ 7,630 $ 77,207 $ 23,189 $ 157,018
Amortization 861 953 1,724 1,440
Equity-based compensation 1,096 892 2,102 1,571
Restructuring   -       -     58       -  
Adjusted EBITA $ 9,587 $ 79,052 $ 27,073 $ 160,029
               
Data Storage
Bookings $ 25,239 $ 37,546 $ 54,008 $ 70,161
 
Revenues $ 49,769 $ 45,680 $ 94,104 $ 85,658
 
Operating income $ 11,372 $ 12,342 $ 19,557 $ 23,902
Amortization 324 356 676 719
Equity-based compensation 440 352 851 660
Restructuring   -       -     5       -  
Adjusted EBITA $ 12,136 $ 13,050 $ 21,089 $ 25,281
               
Unallocated Corporate
Operating loss $ (3,882 ) $ (6,579 ) $ (6,680 ) $ (10,742 )
Amortization - 25 - 83
Equity-based compensation   2,478       2,473     4,191       4,286  
Adjusted loss $ (1,404 ) $ (4,081 ) $ (2,489 ) $ (6,373 )
               
Total
Bookings $ 102,533 $ 310,828 $ 215,931 $ 541,688
 
Revenues $ 136,547 $ 264,815 $ 276,456 $ 519,491
 
Operating income $ 15,120 $ 82,970 $ 36,066 $ 170,178
Amortization 1,185 1,334 2,400 2,242
Equity-based compensation 4,014 3,717 7,144 6,517
Restructuring   -       -     63       -  
Adjusted EBITA $ 20,319     $ 88,021   $ 45,673     $ 178,937  
                                 

Source: Veeco Instruments Inc.

Veeco Instruments Inc.
Financial:
Debra Wasser, 516-677-0200 x1472
SVP Investor Relations & Corporate Communications
or
Media:
Fran Brennen, 516-677-0200 x1222
Senior Director Marcom