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Veeco Reports Fourth Quarter and Fiscal Year 2021 Financial Results

Veeco Instruments Inc.
Veeco Instruments Inc.

Fourth Quarter 2021 Highlights:

  • Revenues of $153.0 million, compared with $138.9 million in the same period last year

  • GAAP net income of $8.2 million, or $0.15 per diluted share, compared with a net loss of $0.1 million, or $(0.00) per diluted share in the same period last year

  • Non-GAAP net income of $22.6 million, or $0.43 per diluted share, compared with $15.0 million, or $0.30 per diluted share in the same period last year

Full Year 2021 Highlights:

  • Revenues of $583.3 million, compared with $454.2 million last year

  • GAAP net income of $26.0 million, or $0.49 per diluted share, compared with a net loss of $8.4 million, or $(0.17) per diluted share last year

  • Non-GAAP net income of $73.6 million, or $1.43 per diluted share, compared with $42.3 million, or $0.86 per diluted share last year

PLAINVIEW, N.Y., Feb. 16, 2022 (GLOBE NEWSWIRE) -- Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its fourth quarter and fiscal year ended December 31, 2021. 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 Results

Q4 '21

Q4 '20

2021

2020

Revenue

$

153.0

$

138.9

$

583.3

$

454.2

Net income (loss)

$

8.2

$

(0.1

)

$

26.0

$

(8.4

)

Diluted earnings (loss) per share

$

0.15

$

(0.00

)

$

0.49

$

(0.17

)


4th Quarter

Full Year

Non-GAAP Results

Q4 '21

Q4 '20

2021

2020

Operating income

$

24.9

$

17.6

$

86.6

$

52.5

Net income

$

22.6

$

15.0

$

73.6

$

42.3

Diluted earnings per share

$

0.43

$

0.30

$

1.43

$

0.86

“I am proud of our many accomplishments in 2021,” commented Bill Miller, Veeco’s Chief Executive Officer. “We successfully advanced our product innovation and penetrated new customers, enhanced our service capabilities, increased our manufacturing capacity, improved our capital structure, solidified our governance and commitment to corporate responsibility, and strengthened the Veeco United culture. In September, we announced long-term financial targets and made immediate progress toward those targets with significant revenue and EPS growth in 2021.”

“We had solid results in the fourth quarter with revenue and EPS exceeding the midpoint of our guidance,” continued Mr. Miller. “Demand in our semiconductor and compound semiconductor markets is exceptionally strong and we exited 2021 with order momentum, increased backlog and exciting opportunities that will support our growth strategy.”

Guidance and Outlook

The following guidance is provided for Veeco’s first quarter 2022:

  • Revenue is expected in the range of $145 million to $165 million

  • GAAP diluted earnings per share are expected in the range of $0.15 to $0.32

  • Non-GAAP diluted earnings per share are expected in the range of $0.28 to $0.44

The above issued guidance takes into account the impact of the adoption of ASU 2020-06, effective January 1, 2022, which includes the reduction of non-cash interest expense for GAAP purposes, and the calculation of diluted earnings per share using the if-converted method for both GAAP and non-GAAP purposes. 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 16, 2022 starting at 5:00pm ET. To join the call, dial 1-888-220-8451 (toll free) or 1-646-828-8193 and use passcode 9212833. 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, our ongoing transformation initiative and the effects 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 suppliers and 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 end-markets, 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, and from time-to-time in our other SEC reports. 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 December 31,

Year ended December 31,

2021

2020

2021

2020

Net sales

$

152,972

$

138,946

$

583,277

$

454,163

Cost of sales

88,949

82,101

341,003

259,863

Gross profit

64,023

56,845

242,274

194,300

Operating expenses, net:

Research and development

22,283

21,417

88,680

78,994

Selling, general, and administrative

21,211

20,710

84,536

76,251

Amortization of intangible assets

2,974

3,831

12,280

15,333

Restructuring

1,097

Asset impairment

281

Other operating expense (income), net

(71

)

281

68

(221

)

Total operating expenses, net

46,397

46,239

185,564

171,735

Operating income (loss)

17,626

10,606

56,710

22,565

Interest expense, net

(5,799

)

(6,516

)

(26,020

)

(23,188

)

Other income (expense), net

(5,010

)

(4,794

)

(5,010

)

(7,841

)

Income (loss) before income taxes

6,817

(704

)

25,680

(8,464

)

Income tax expense (benefit)

(1,387

)

(602

)

(358

)

(73

)

Net income (loss)

$

8,204

$

(102

)

$

26,038

$

(8,391

)

Income (loss) per common share:

Basic

$

0.17

$

(0.00

)

$

0.53

$

(0.17

)

Diluted

$

0.15

$

(0.00

)

$

0.49

$

(0.17

)

Weighted average number of shares:

Basic

49,187

48,340

49,073

48,362

Diluted

54,931

48,340

53,643

48,362

Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)

December 31,

December 31,

2021

2020

(unaudited)

Assets

Current assets:

Cash and cash equivalents

$

119,747

$

129,625

Restricted cash

725

658

Short-term investments

104,181

189,771

Accounts receivable, net

109,609

79,991

Contract assets

18,293

21,246

Inventories

170,858

145,906

Deferred cost of sales

346

433

Prepaid expenses and other current assets

25,628

19,301

Total current assets

549,387

586,931

Property, plant and equipment, net

99,743

65,271

Operating lease right-of-use assets

28,813

10,275

Intangible assets, net

33,905

46,185

Goodwill

181,943

181,943

Deferred income taxes

1,639

1,440

Other assets

3,546

6,019

Total assets

$

898,976

$

898,064

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$

44,456

$

33,656

Accrued expenses and other current liabilities

79,752

44,876

Customer deposits and deferred revenue

63,136

67,235

Income taxes payable

1,860

914

Total current liabilities

189,204

146,681

Deferred income taxes

4,792

5,240

Long-term debt

229,438

321,115

Long-term operating lease liabilities

32,834

6,305

Other liabilities

5,080

10,349

Total liabilities

461,348

489,690

Total stockholders’ equity

437,628

408,374

Total liabilities and stockholders’ equity

$

898,976

$

898,064

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 December 31, 2021

GAAP

Compensation

Amortization

Other

Non-GAAP

Net sales

$

152,972

$

152,972

Gross profit

64,023

608

235

64,866

Gross margin

41.9

%

42.4

%

Operating expenses

46,397

(2,906

)

(2,974

)

(537

)

39,980

Operating income (loss)

17,626

3,514

2,974

772

^

24,886

Net income (loss)

8,204

3,514

2,974

7,950

^

22,642

Income (loss) per common share:

Basic

$

0.17

$

0.46

Diluted

0.15

0.43

Weighted average number of shares:

Basic

49,187

49,187

Diluted (1)

54,931

52,761


____________

^

- See table below for additional details.

(1)

- The non-GAAP incremental dilutive shares includes the impact of the Company’s capped call transaction issued concurrently with our 2027 Notes, and as such, no incremental shares are added to the dilutive share count in periods in which the average stock price per share is below $18.46. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, incremental shares are added to the dilutive share count in periods in which the average stock price per share is above $13.98, and the Company is in a net income position. The average stock price for the three months ended December 31, 2021 was $25.53, and therefore 1.9 million shares were included in the non-GAAP diluted share count, and 4.0 million shares were included in the GAAP diluted share count related to the 2027 Notes.

Veeco Instruments Inc. and Subsidiaries
Other Non-GAAP Adjustments
(in thousands)
(unaudited)

Three months ended December 31, 2021

Transition expenses related to San Jose expansion project

$

698

Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting

74

Subtotal

772

Non-cash interest expense

3,057

Other (income) expense, net

5,010

Non-GAAP tax adjustment *

(889

)

Total Other

$

7,950


____________

*

- 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 December 31, 2020

GAAP

Compensation

Amortization

Other

Non-GAAP

Net sales

$

138,946

$

138,946

Gross profit

56,845

486

20

57,351

Gross margin

40.9

%

41.3

%

Operating expenses

46,239

(2,656

)

(3,831

)

(41

)

39,711

Operating income (loss)

10,606

3,142

3,831

61

^

17,640

Net income (loss)

(102

)

3,142

3,831

8,085

^

14,956

Income (loss) per common share:

Basic

$

(0.00

)

$

0.31

Diluted

(0.00

)

0.30

Weighted average number of shares:

Basic

48,340

48,340

Diluted

48,340

49,663


____________

^

- See table below for additional details.

Veeco Instruments Inc. and Subsidiaries
Other Non-GAAP Adjustments
(in thousands)
(unaudited)

Three months ended December 31, 2020

Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting

$

61

Subtotal

61

Non-cash interest expense

3,511

Other (income) expense, net

4,794

Non-GAAP tax adjustment *

(281

)

Total Other

$

8,085


____________

*

- 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

December 31, 2021

December 31, 2020

GAAP Net income (loss)

$

8,204

$

(102

)

Share-based compensation

3,514

3,142

Amortization

2,974

3,831

Transition expenses related to San Jose expansion project

698

Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting

74

61

Interest (income) expense, net

5,799

6,516

Other (income) expense, net

5,010

4,794

Income tax expense (benefit)

(1,387

)

(602

)

Non-GAAP Operating income (loss)

$

24,886

$

17,640

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 thousands, except per share amounts)
(unaudited)

Non-GAAP Adjustments

Share-based

For the year ended December 31, 2021

GAAP

Compensation

Amortization

Other

Non-GAAP

Net sales

$

583,277

$

583,277

Gross profit

242,274

2,373

448

245,095

Gross margin

41.5

%

42.0

%

Operating expenses

185,564

(12,876

)

(12,280

)

(1,918

)

158,490

Operating income (loss)

56,710

15,249

12,280

2,366

^

86,605

Net income (loss)

26,038

15,249

12,280

20,082

^

73,649

Income (loss) per common share:

Basic

$

0.53

$

1.50

Diluted

0.49

1.43

Weighted average number of shares:

Basic

49,073

49,073

Diluted

53,643

51,472


____________

^

- See table below for additional details.

(1)

- The non-GAAP incremental dilutive shares includes the impact of the Company’s capped call transaction issued concurrently with our 2027 Notes, and as such, no incremental shares are added to the dilutive share count in periods in which the average stock price per share is below $18.46. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, incremental shares are added to the dilutive share count in periods in which the average stock price per share is above $13.98, and the Company is in a net income position. The average stock price for the fiscal year ended December 31, 2021 was $22.89, and therefore 1.3 million shares were included in the non-GAAP diluted share count, and 3.5 million shares were included in the GAAP diluted share count related to the 2027 Notes.

Veeco Instruments Inc. and Subsidiaries
Other Non-GAAP Adjustments
(in thousands)
(unaudited)

For the year ended December 31, 2021

Transition expenses related to San Jose expansion project

2,021

Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting

345

Subtotal

2,366

Non-cash interest expense

13,819

Other (income) expense, net

5,010

Non-GAAP tax adjustment *

(1,113

)

Total Other

$

20,082

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

For the year ended December 31, 2020

GAAP

Compensation

Amortization

Other

Non-GAAP

Net sales

$

454,163

$

454,163

Gross profit

194,300

1,870

348

196,518

Gross margin

42.8

%

43.3

%

Operating expenses

171,735

(10,833

)

(15,333

)

(1,530

)

144,039

Operating income (loss)

22,565

12,703

15,333

1,878

^

52,479

Net income (loss)

(8,391

)

12,703

15,333

22,684

^

42,329

Income (loss) per common share:

Basic

$

(0.17

)

$

0.88

Diluted

(0.17

)

0.86

Weighted average number of shares:

Basic

48,362

48,362

Diluted

48,362

49,309


____________

^

- See table below for additional details.

Veeco Instruments Inc. and Subsidiaries
Other Non-GAAP Adjustments
(in thousands)
(unaudited)

For the year ended December 31, 2020

Restructuring

$

1,097

Asset impairment

281

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

227

Subtotal

1,878

Non-cash interest expense

13,792

Other (income) expense, net

7,841

Non-GAAP tax adjustment *

(827

)

Total Other

$

22,684

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)

Year ended

Year ended

December 31, 2021

December 31, 2020

GAAP Net income (loss)

$

26,038

$

(8,391

)

Share-based compensation

15,249

12,703

Amortization

12,280

15,333

Transition expenses related to San Jose expansion project

2,021

Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting

345

227

Restructuring

1,097

Asset impairment

281

Release of inventory fair value step-up associated with the Ultratech purchase accounting

273

Interest (income) expense, net

26,020

23,188

Other (income) expense, net

5,010

7,841

Income tax expense (benefit)

(358

)

(73

)

Non-GAAP Operating income (loss)

$

86,605

$

52,479

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

March 31, 2022

GAAP

Compensation

Amortization

Other

Non-GAAP

Net sales

$

145

-

$

165

$

145

-

$

165

Gross profit

58

-

71

1

1

60

-

73

Gross margin

41

%

-

43

%

42

%

-

44

%

Operating expenses

48

-

50

(3

)

(3

)

(1

)

42

-

44

Operating income (loss)

10

-

21

4

3

1

18

-

29

Net income (loss)

$

7

-

$

18

4

3

1

$

15

-

$

26

Income (loss) per diluted common share

$

0.15

-

$

0.32

$

0.28

-

$

0.44

Veeco Instruments Inc. and Subsidiaries
Income (Loss) per Diluted Common Share
(in millions, except per share amounts)
(unaudited)

Guidance for the three months ending March 31, 2022

GAAP

Non-GAAP

Net income

$

7

-

$

18

$

15

-

$

26

Add: Interest on Convertible Senior Notes

2

3

2

2

Net income available to common shareholders

$

9

-

$

21

$

17

-

$

28

Basic weighted average common shares

49

49

49

49

Add: Dilutive effect of share-based awards

2

2

2

2

Add: Dilutive effect of 2023 Convertible Senior Notes

Add: Dilutive effect of 2025 Convertible Senior Notes

6

6

6

Add: Dilutive effect of 2027 Convertible Senior Notes (1)

9

9

7

7

Diluted weighted average common shares

60

66

64

64

Income (loss) per diluted common share

$

0.15

-

$

0.32

$

0.28

-

$

0.44


____________

(1)

- The non-GAAP incremental dilutive shares includes the impact of the Company’s capped call transaction issued concurrently with our 2027 Notes, and as such, an effective conversion price of $18.46 is used when determining incremental shares to add to the dilutive share count. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, an effective conversion price of $13.98 is used when determining incremental shares to add to the dilutive share count

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, 2022

GAAP Net income (loss)

$

7

-

$

18

Share-based compensation

4

-

4

Amortization

3

-

3

Interest expense, net

3

-

3

Other

1

-

1

Non-GAAP Operating income (loss)

$

18

-

$

29

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.