News

News

Veeco Reports Third Quarter 2013 Financial Results and Announces Conference Call

November 08, 2013

PLAINVIEW, N.Y.--(BUSINESS WIRE)--Nov. 8, 2013-- Veeco Instruments Inc. (Nasdaq:VECO) announced its financial results for the third quarter ended September 30, 2013. 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 per share data)

       

Non-GAAP Results ($M except per share data)

      Q3 ‘13     Q3 ‘12

 

   

Q3 ‘13

   

Q3 ‘12

Revenues     $99.3     $132.7

Adjusted EBITA

   

($5.1)

   

$14.2

Net (loss) income     ($6.0)     $7.7

Net (loss) income

   

($3.0)

   

$11.7

Per share (loss) income     ($0.16)     $0.20

Per share (loss) income

   

($0.08)

   

$0.30

 

Third Quarter 2013 Results

“Veeco’s third quarter 2013 results were impacted by persistent overcapacity and weak business conditions in our MOCVD and Data Storage businesses,” said John R. Peeler, Veeco’s Chairman and Chief Executive Officer. “Third quarter revenue was $99 million, and we lost $5 million on an adjusted EBITA basis and non-GAAP loss per share was ($0.08). In addition to low volumes, our gross margins remain under pressure from intense pricing pressure in MOCVD.” Third quarter LED & Solar revenues were $75 million: $68 million in MOCVD and $7 million in MBE. Data Storage revenues were $24 million.

Peeler continued, “Veeco’s third quarter bookings increased to $92 million, compared to $85 million in the prior quarter. MOCVD bookings increased 28% sequentially to $67 million. We are pleased to be winning the most important deals, but we have not yet seen a recovery in MOCVD demand. Production orders for MBE and Data Storage systems also remain elusive, and bookings in those businesses were weak, at $7 million and $18 million, respectively.”

“While business conditions have remained challenging throughout 2013, we remain positive about long-term trends in LED lighting and our new opportunity in flexible OLED encapsulation for mobile phones,” added Peeler. “Our strong R&D capability, technology leadership position, world class sales and support organization, flexible manufacturing approach and solid balance sheet provide a strong foundation for the future.”

November 11, 2013 Conference Call Information

A conference call reviewing these results has been scheduled for 5:00pm ET on Monday, November 11 th at 1-888-233-7976 (toll free) or 1-913-981-4900 using passcode 8358383. 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 that evening through midnight on November 25, 2013 at 888-203-1112 or 719-457-0820, using passcode 8358383, or on the Veeco website. 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 OLEDs, 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, 2012 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       Nine months ended
September 30, September 30,
  2013         2012     2013         2012  
 
Net sales $ 99,324 $ 132,715 $ 258,540 $ 409,171
Cost of sales   69,016     82,831     171,040     232,765  
Gross profit 30,308 49,884 87,500 176,406
 
Operating expenses (income):
Selling, general and administrative 19,650 13,892 59,077 54,558
Research and development 18,993 25,775 60,600 72,991
Amortization 855 1,477 2,566 3,877
Restructuring 1,240 2,014 1,771 2,077
Other, net   (493 )   (737 )   (141 )   (626 )
Total operating expenses   40,245     42,421     123,873     132,877  
 
Operating (loss) income (9,937 ) 7,463 (36,373 ) 43,529
 
Interest income, net   (192 )   (176 )   (620 )   (708 )
(Loss) income from continuing operations before income taxes (9,745 ) 7,639 (35,753 ) 44,237
Income tax (benefit) provision   (3,719 )   (59 )   (15,575 )   9,066  
(Loss) income from continuing operations   (6,026 )   7,698     (20,178 )   35,171  
 
Discontinued operations:
Income from discontinued operations before income taxes - 5,396 - 6,534
Income tax provision   -     1,341     -     1,722  
Income from discontinued operations, net of tax - 4,055 - 4,812
       
Net (loss) income $ (6,026 ) $ 11,753   $ (20,178 ) $ 39,983  
 
(Loss) income per common share:
Basic:
Continuing operations $ (0.16 ) $ 0.20 $ (0.52 ) $ 0.92
Discontinued operations   -     0.10     -     0.12  
(Loss) income $ (0.16 ) $ 0.30   $ (0.52 ) $ 1.04  
 
Diluted:
Continuing operations $ (0.16 ) $ 0.20 $ (0.52 ) $ 0.90
Discontinued operations   -     0.10     -     0.13  
(Loss) income $ (0.16 ) $ 0.30   $ (0.52 ) $ 1.03  
 
Weighted average shares outstanding:
Basic 38,841 38,577 38,774 38,402
Diluted 38,841 39,169 38,774 39,006
 
 
Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
           
September 30, December 31,
  2013   2012
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 247,666 $ 384,557
Short-term investments 322,488 192,234
Restricted cash 2,850 2,017
Accounts receivable, net 37,769 63,169
Inventories, net 57,585 59,807
Prepaid expenses and other current assets 36,864 32,155
Deferred income taxes, current   10,545   10,545
Total current assets 715,767 744,484
 
Property, plant and equipment at cost, net 95,698 98,302
Goodwill 55,828 55,828
Deferred income taxes 6,072 935
Intangible assets, net 18,407 20,974
Other assets, net   17,341   16,781
Total assets $ 909,113 $ 937,304
 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 28,334 $ 26,087
Accrued expenses and other current liabilities 60,283 74,260
Deferred revenue 8,032 9,380
Income taxes payable 974 2,292
Current portion of long-term debt   285   268
Total current liabilities 97,908 112,287
 
Deferred income taxes 7,110 7,137
Long-term debt 1,922 2,138
Other liabilities   4,894   4,530
Total liabilities 111,834 126,092
 
Equity 797,279 811,212
   
Total liabilities and equity $ 909,113 $ 937,304
 
 
Veeco Instruments Inc. and Subsidiaries
Reconciliation of GAAP to non-GAAP results
(In thousands, except per share data)
(Unaudited)
 
      Three months ended       Nine months ended
September 30, September 30,
  2013         2012     2013         2012  
 
Adjusted EBITA
 
Operating (loss) income $ (9,937 ) $ 7,463 $ (36,373 ) $ 43,529
 
Non-GAAP adjustments:
 
Amortization 855 1,477 2,566 3,877
Equity-based compensation 2,763 3,265 9,055 10,409
Restructuring   1,240     2,014     1,771     2,077  
 

(Loss) earnings from continuing operations before interest, income taxes

and amortization excluding certain items ("Adjusted EBITA")

$ (5,079 ) $ 14,219   $ (22,981 ) $ 59,892  
 
 
Non-GAAP Net (Loss) Income
 
Net (loss) income from continuing operations (GAAP basis) $ (6,026 ) $ 7,698 $ (20,178 ) $ 35,171
 
Non-GAAP adjustments:
 
Amortization 855 1,477 2,566 3,877
Equity-based compensation 2,763 3,265 9,055 10,409
Restructuring 1,240 2,014 1,771 2,077
Income tax effect of non-GAAP adjustments   (1,823 ) (1 )   (2,772 ) (1 )   (4,936 ) (1 )   (6,400 ) (1 )
 
Non-GAAP net (loss) income $ (2,991 ) $ 11,682   $ (11,722 ) $ 45,134  
 

Non-GAAP (loss) earnings per diluted share excluding certain items

("Non-GAAP EPS")

$ (0.08 ) $ 0.30   $ (0.30 ) $ 1.16  
 
Diluted weighted average shares outstanding 38,841 39,169 38,774 39,006
 
 

(1) 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 ("GAAP"), 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 (Loss) Income to Adjusted (Loss) EBITA
(In thousands)
(Unaudited)
         
      Three months ended Nine months ended
September 30, September 30,
          2013         2012     2013         2012  
LED & Solar        
Bookings $ 73,517 $ 67,842 $ 174,321 $ 229,766
 
Revenues $ 75,001 $ 98,905 $ 193,241 $ 281,257
 
Operating (loss) income $ (4,063 ) $ 5,733 $ (15,674 ) $ 28,922
Amortization 531 1,154 1,595 2,878
Equity-based compensation 1,016 1,914 3,042 4,016
Restructuring   793         660     1,216         718  
Adjusted (loss) EBITA $ (1,723 ) $ 9,461 $ (9,821 ) $ 36,534
                       
Data Storage
Bookings $ 17,966 $ 15,850 $ 72,340 $ 69,858
 
Revenues $ 24,323 $ 33,810 $ 65,299 $ 127,914
 
Operating income (loss) $ 925 $ 1,896 $ (136 ) $ 21,453
Amortization 324 323 971 999
Equity-based compensation 439 763 1,057 1,614

Restructuring

  447         1,296     497         1,301  
Adjusted EBITA $ 2,135 $ 4,278 $ 2,389 $ 25,367
                       
Unallocated Corporate
Operating loss $ (6,607 ) $ 10 $ (19,943 ) $ (6,138 )
Interest income, net (192 ) $ (176 ) (620 ) $ (708 )
Equity-based compensation 1,308 588 4,956 4,779
Restructuring   -         58     58         58  
Adjusted (loss) EBITA $ (5,491 ) $ 480 $ (15,549 ) $ (2,009 )
                       
Total
Bookings $ 91,483 $ 83,692 $ 246,661 $ 299,624
 
Revenues $ 99,324 $ 132,715 $ 258,540 $ 409,171
 
Operating (loss) income $ (9,745 ) $ 7,639 $ (35,753 ) $ 44,237
Interest income, net (192 ) (176 ) (620 ) (708 )
Amortization 855 1,477 2,566 3,877
Equity-based compensation 2,763 3,265 9,055 10,409
Restructuring   1,240         2,014     1,771         2,077  
Adjusted (loss) EBITA $ (5,079 )     $ 14,219   $ (22,981 )     $ 59,892  
   

Source: Veeco Instruments Inc.

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