Third Quarter 2020 Highlights:
- Revenues of $112.1 million, compared with $109.0 million in the same period last year
- GAAP net income of $0.6 million, or $0.01 per diluted share, compared with a loss of $11.8 million, or $0.25 loss per diluted share in the same period last year
- Non-GAAP net income of $11.0 million, or $0.22 per diluted share, compared with $2.6 million, or $0.05 per diluted share in the same period last year
PLAINVIEW, N.Y., Oct. 27, 2020 (GLOBE NEWSWIRE) -- Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its third quarter ended September 30, 2020. 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 '20 | Q3 '19 | |||||
| Revenue | $ | 112.1 | $ | 109.0 | |||
| Net income (loss) | $ | 0.6 | $ | (11.8 | ) | ||
| Diluted earnings (loss) per share | $ | 0.01 | $ | (0.25 | ) | ||
| Non-GAAP Results | Q3 '20 | Q3 '19 | ||||
| Net income (loss) | $ | 11.0 | $ | 2.6 | ||
| Operating income (loss) | $ | 14.1 | $ | 4.0 | ||
| Diluted earnings (loss) per share | $ | 0.22 | $ | 0.05 | ||
“I am proud of the Veeco team for achieving another quarter of solid performance. While maintaining all health and safety measures, we continue to operate at normal capacity,” commented William J. Miller, Ph.D., Chief Executive Officer.
“We are pleased with our advancing profitability in the quarter which was driven by our ion beam technologies sold into the Data Storage market. Our non-GAAP operating income improved significantly year-on-year, demonstrating the early effectiveness of our transformation. Given our visibility, we expect continued strength in our overall business and feel confident about our future performance,” continued Dr. Miller. “We began to deliver evaluation systems in support of our longer term growth strategy in the semiconductor and compound semiconductor markets and we expect these initiatives to contribute to our growth in 2022 and beyond.”
Guidance and Outlook
The following guidance is provided for Veeco’s fourth quarter 2020:
- Revenue is expected in the range of $120 million to $135 million
- GAAP earnings per share are expected in the range of $0.02 to $0.17
- Non-GAAP earnings per share are expected in the range of $0.22 to $0.37
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, October 27, 2020 starting at 5:00pm ET. To join the call, dial 1-800-437-2398 (toll free) or 1-929-477-0577 and use passcode 9869378. 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 that 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
This press release contains “forward-looking statements”, within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, as amended, that are based on management’s expectations, estimates, projections and assumptions. Words such as “expects,” “anticipates,” “plans,” “believes,” “scheduled,” “estimates” and variations of these words and similar expressions are intended to identify forward-looking statements. Forward-looking statements include, but are not limited to, those regarding anticipated growth and trends in our businesses and markets, industry outlooks and demand drivers, our investment and growth strategies, our development of new products and technologies, our business outlook for current and future periods, the impact of the COVID-19 pandemic and the affects thereof on our operations and financial results; and other statements that are not historical facts. These statements and their underlying assumptions are subject to risks and uncertainties and are not guarantees of future performance. Factors that could cause actual results to differ materially from those expressed or implied by such statements include, without limitation: the level of demand for our products; global economic and industry conditions; the effects of regional or global health epidemics, including the effects of the COVID-19 pandemic on the Company’s operations and on those of our customers and suppliers; global trade issues, including the ongoing trade disputes between the U.S. and China, and changes in trade and export license policies; our dependency on third-party outsourcing partners; the timing of customer orders; our ability to develop, deliver and support new products and technologies; our ability to expand our current markets, increase market share and develop new markets; the concentrated nature of our customer base; our ability to obtain and protect intellectual property rights in key technologies; our ability to achieve the objectives of operational and strategic initiatives and attract, motivate and retain key employees; the variability of results among products and segments, and our ability to accurately forecast future results, market conditions, and customer requirements; the impact of our indebtedness, including our convertible senior notes and our capped call transactions; and other risks and uncertainties described in our SEC filings on Forms 10-K, 10-Q and 8-K. All forward-looking statements speak only to management’s expectations, estimates, projections and assumptions as of the date of this press release or, in the case of any document referenced herein or incorporated by reference, the date of that document. The Company does not undertake any obligation to update or publicly revise any forward-looking statements to reflect events, circumstances or changes in expectations after the date of this press release.
-financial tables attached-
Veeco Contacts:
| Investors: | Anthony Bencivenga | (516) 252-1438 | abencivenga@veeco.com |
| Media: | Kevin Long | (516) 714-3978 | 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, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| Net sales | $ | 112,078 | $ | 108,954 | $ | 315,216 | $ | 306,147 | |||||||
| Cost of sales | 62,936 | 66,731 | 177,761 | 192,924 | |||||||||||
| Gross profit | 49,142 | 42,223 | 137,455 | 113,223 | |||||||||||
| Operating expenses, net: | |||||||||||||||
| Research and development | 19,129 | 22,639 | 57,577 | 68,901 | |||||||||||
| Selling, general, and administrative | 19,415 | 20,962 | 55,541 | 60,620 | |||||||||||
| Amortization of intangible assets | 3,831 | 4,312 | 11,502 | 12,773 | |||||||||||
| Restructuring | — | 1,828 | 1,097 | 3,874 | |||||||||||
| Asset impairment | — | — | 281 | — | |||||||||||
| Other operating expense (income), net | (218 | ) | (153 | ) | (502 | ) | (232 | ) | |||||||
| Total operating expenses, net | 42,157 | 49,588 | 125,496 | 145,936 | |||||||||||
| Operating income (loss) | 6,985 | (7,365 | ) | 11,959 | (32,713 | ) | |||||||||
| Interest expense, net | (6,194 | ) | (4,330 | ) | (16,673 | ) | (12,742 | ) | |||||||
| Loss on extinguishment of debt | — | — | (3,046 | ) | — | ||||||||||
| Income (loss) before income taxes | 791 | (11,695 | ) | (7,760 | ) | (45,455 | ) | ||||||||
| Income tax expense (benefit) | 211 | 72 | 530 | 407 | |||||||||||
| Net income (loss) | $ | 580 | $ | (11,767 | ) | $ | (8,290 | ) | $ | (45,862 | ) | ||||
| Income (loss) per common share: | |||||||||||||||
| Basic | $ | 0.01 | $ | (0.25 | ) | $ | (0.17 | ) | $ | (0.97 | ) | ||||
| Diluted | $ | 0.01 | $ | (0.25 | ) | $ | (0.17 | ) | $ | (0.97 | ) | ||||
| Weighted average number of shares: | |||||||||||||||
| Basic | 48,341 | 47,489 | 48,327 | 47,361 | |||||||||||
| Diluted | 49,174 | 47,489 | 48,327 | 47,361 | |||||||||||
| Veeco Instruments Inc. and Subsidiaries | |||||
| Condensed Consolidated Balance Sheets | |||||
| (in thousands) | |||||
| September 30, | December 31, | ||||
| 2020 | 2019 | ||||
| (unaudited) | |||||
| Assets | |||||
| Current assets: | |||||
| Cash and cash equivalents | $ | 147,588 | $ | 129,294 | |
| Restricted cash | 664 | 657 | |||
| Short-term investments | 161,585 | 115,252 | |||
| Accounts receivable, net | 80,212 | 45,666 | |||
| Contract assets | 21,342 | 25,351 | |||
| Inventories | 143,469 | 133,067 | |||
| Deferred cost of sales | 1,677 | 445 | |||
| Prepaid expenses and other current assets | 15,948 | 14,966 | |||
| Assets held for sale | — | 11,180 | |||
| Total current assets | 572,485 | 475,878 | |||
| Property, plant and equipment, net | 65,811 | 75,711 | |||
| Operating lease right-of-use assets | 10,522 | 14,453 | |||
| Intangible assets, net | 50,016 | 61,518 | |||
| Goodwill | 181,943 | 181,943 | |||
| Deferred income taxes | 1,555 | 1,549 | |||
| Other assets | 7,293 | 7,036 | |||
| Total assets | $ | 889,625 | $ | 818,088 | |
| Liabilities and stockholders’ equity | |||||
| Current liabilities: | |||||
| Accounts payable | $ | 33,837 | $ | 21,281 | |
| Accrued expenses and other current liabilities | 40,667 | 41,243 | |||
| Customer deposits and deferred revenue | 71,539 | 54,870 | |||
| Income taxes payable | 891 | 830 | |||
| Total current liabilities | 146,934 | 118,224 | |||
| Deferred income taxes | 5,984 | 5,648 | |||
| Long-term debt | 320,818 | 300,068 | |||
| Operating lease long-term liabilities | 6,793 | 10,300 | |||
| Other liabilities | 11,003 | 9,336 | |||
| Total liabilities | 491,532 | 443,576 | |||
| Total stockholders’ equity | 398,093 | 374,512 | |||
| Total liabilities and stockholders’ equity | $ | 889,625 | $ | 818,088 | |
| 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, 2020 | GAAP | Compensation | Amortization | Other | Non-GAAP | |||||||||||
| Net sales | $ | 112,078 | $ | 112,078 | ||||||||||||
| Gross profit | 49,142 | 389 | 288 | 49,819 | ||||||||||||
| Gross margin | 43.8 | % | 44.5 | % | ||||||||||||
| Operating expenses | 42,157 | (2,553 | ) | (3,831 | ) | (28 | ) | 35,745 | ||||||||
| Operating income (loss) | 6,985 | 2,942 | 3,831 | 316 | ^ | 14,074 | ||||||||||
| Net income (loss) | 580 | 2,942 | 3,831 | 3,654 | ^ | 11,007 | ||||||||||
| Income (loss) per common share: | ||||||||||||||||
| Basic | $ | 0.01 | $ | 0.23 | ||||||||||||
| Diluted | 0.01 | 0.22 | ||||||||||||||
| Weighted average number of shares: | ||||||||||||||||
| Basic | 48,341 | 48,341 | ||||||||||||||
| Diluted | 49,174 | 49,174 | ||||||||||||||
_______________________
^ - See table below for additional details.
| Veeco Instruments Inc. and Subsidiaries | |||
| Other Non-GAAP Adjustments | |||
| (in thousands) | |||
| (unaudited) | |||
| Three months ended September 30, 2020 | |||
| Release of inventory fair value step-up associated with the Ultratech purchase accounting | 273 | ||
| Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting | 43 | ||
| Subtotal | 316 | ||
| Non-cash interest expense | 3,504 | ||
| Non-GAAP tax adjustment * | (166 | ) | |
| Total Other | 3,654 | ||
_______________________
* - 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, 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 Net Income (loss) to Non-GAAP Operating Income (loss) | ||||||
| (in thousands) | ||||||
| (unaudited) | ||||||
| Three months ended | Three months ended | |||||
| September 30, 2020 | September 30, 2019 | |||||
| GAAP Net income (loss) | $ | 580 | $ | (11,767 | ) | |
| Share-based compensation | 2,942 | 3,783 | ||||
| Amortization | 3,831 | 4,312 | ||||
| Restructuring | — | 1,828 | ||||
| Release of inventory fair value step-up associated with the Ultratech purchase accounting | 273 | 1,270 | ||||
| Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting | 43 | 138 | ||||
| Interest (income) expense, net | 6,194 | 4,330 | ||||
| Income tax expense (benefit) | 211 | 72 | ||||
| Non-GAAP Operating income (loss) | $ | 14,074 | $ | 3,966 | ||
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, 2020 | GAAP | Compensation | Amortization | Other | Non-GAAP | |||||||||||||||||||||||
| Net sales | $ | 120 | - | $ | 135 | $ | 120 | - | $ | 135 | ||||||||||||||||||
| Gross profit | 50 | - | 60 | — | — | — | 50 | - | 60 | |||||||||||||||||||
| Gross margin | 42 | % | - | 44 | % | 42 | % | - | 44 | % | ||||||||||||||||||
| Operating expenses | 43 | - | 45 | (3) | (4) | — | 36 | - | 38 | |||||||||||||||||||
| Operating income (loss) | 7 | - | 15 | 3 | 4 | — | 14 | - | 22 | |||||||||||||||||||
| Net income (loss) | $ | 1 | - | $ | 9 | 3 | 4 | 3 | $ | 11 | - | $ | 19 | |||||||||||||||
| Income (loss) per diluted common share | $ | 0.02 | - | $ | 0.17 | $ | 0.22 | - | $ | 0.37 | ||||||||||||||||||
| Weighted average number of shares | 50 | 50 | 50 | 50 | ||||||||||||||||||||||||
| 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, 2020 | ||||||||
| GAAP Net income (loss) | $ | 1 | - | $ | 9 | |||
| Share-based compensation | 3 | - | 3 | |||||
| Amortization | 4 | - | 4 | |||||
| Interest expense, net | 6 | - | 6 | |||||
| Non-GAAP Operating income (loss) | $ | 14 | - | $ | 22 | |||
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.