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Veeco Reports Second Quarter 2021 Financial Results

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Second Quarter 2021 Highlights:

  • Revenues of $146.3 million, compared with $98.6 million in the same period last year

  • GAAP net income of $6.3 million, or $0.12 per diluted share, compared with a loss of $8.3 million, or $0.17 loss per diluted share in the same period last year

  • Non-GAAP net income of $17.9 million, or $0.35 per diluted share, compared with $5.5 million, or $0.11 per diluted share in the same period last year

PLAINVIEW, N.Y., Aug. 03, 2021 (GLOBE NEWSWIRE) -- Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its second quarter ended June 30, 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

GAAP Results

Q2 '21

Q2 '20

Revenue

$

146.3

$

98.6

Net income (loss)

$

6.3

$

(8.3

)

Diluted earnings (loss) per share

$

0.12

$

(0.17

)


Non-GAAP Results

Q2 '21

Q2 '20

Net income (loss)

$

17.9

$

5.5

Operating income (loss)

$

21.3

$

8.0

Diluted earnings (loss) per share

$

0.35

$

0.11

“Veeco delivered solid performance in the second quarter with revenue and EPS at the high end of our guidance range,” commented William J. Miller, Ph.D., Chief Executive Officer. “Sales were driven primarily by shipments to our Semiconductor and Data Storage customers.

“We are on track to deliver exceptional growth in 2021 and our evaluation systems in the field are performing well giving us confidence in our longer term growth plan,” continued Dr. Miller. “In addition, progress on our new manufacturing facility, supporting the Semiconductor market, is on schedule and will enable us to meet future demand with increased manufacturing capacity.”

Guidance and Outlook

The following guidance is provided for Veeco’s third quarter 2021:

  • Revenue is expected in the range of $135 million to $155 million

  • GAAP diluted earnings per share are expected in the range of $0.02 to $0.20

  • Non-GAAP diluted earnings per share are expected in the range of $0.25 to $0.44

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, August 3, 2021 starting at 5:00pm ET. To join the call, dial 1-866-248-8441 (toll free) or 1-929-477-0577 and use passcode 9180705. 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 June 30,

Six months ended June 30,

2021

2020

2021

2020

Net sales

$

146,344

$

98,637

$

280,059

$

203,139

Cost of sales

86,178

56,743

164,978

114,826

Gross profit

60,166

41,894

115,081

88,313

Operating expenses, net:

Research and development

22,553

19,254

44,398

38,449

Selling, general, and administrative

21,466

17,818

41,722

36,123

Amortization of intangible assets

2,976

3,834

6,330

7,671

Restructuring

472

1,097

Asset impairment

281

281

Other operating expense (income), net

(81

)

(174

)

(36

)

(283

)

Total operating expenses, net

46,914

41,485

92,414

83,338

Operating income (loss)

13,252

409

22,667

4,975

Interest expense, net

(6,585

)

(5,614

)

(13,208

)

(10,479

)

Loss on extinguishment of debt

(3,046

)

(3,046

)

Income (loss) before income taxes

6,667

(8,251

)

9,459

(8,550

)

Income tax expense (benefit)

319

51

617

319

Net income (loss)

$

6,348

$

(8,302

)

$

8,842

$

(8,869

)

Income (loss) per common share:

Basic

$

0.13

$

(0.17

)

$

0.18

$

(0.18

)

Diluted

$

0.12

$

(0.17

)

$

0.17

$

(0.18

)

Weighted average number of shares:

Basic

48,743

48,109

48,758

48,147

Diluted

53,942

48,109

53,539

48,147


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

June 30,

December 31,

2021

2020

(unaudited)

Assets

Current assets:

Cash and cash equivalents

$

114,747

$

129,625

Restricted cash

640

658

Short-term investments

214,635

189,771

Accounts receivable, net

108,312

79,991

Contract assets

14,084

21,246

Inventories

164,041

145,906

Deferred cost of sales

595

433

Prepaid expenses and other current assets

21,570

19,301

Total current assets

638,624

586,931

Property, plant and equipment, net

82,208

65,271

Operating lease right-of-use assets

27,768

10,275

Intangible assets, net

39,855

46,185

Goodwill

181,943

181,943

Deferred income taxes

1,440

1,440

Other assets

3,671

6,019

Total assets

$

975,509

$

898,064

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$

55,045

$

33,656

Accrued expenses and other current liabilities

52,436

44,876

Customer deposits and deferred revenue

70,569

67,235

Income taxes payable

1,363

914

Total current liabilities

179,413

146,681

Deferred income taxes

5,257

5,240

Long-term debt

328,215

321,115

Long-term operating lease liabilities

31,036

6,305

Other liabilities

7,853

10,349

Total liabilities

551,774

489,690

Total stockholders’ equity

423,735

408,374

Total liabilities and stockholders’ equity

$

975,509

$

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 June 30, 2021

GAAP

Compensation

Amortization

Other

Non-GAAP

Net sales

$

146,344

$

146,344

Gross profit

60,166

650

31

60,847

Gross margin

41.1

%

41.6

%

Operating expenses

46,914

(3,717

)

(2,976

)

(671

)

39,550

Operating income (loss)

13,252

4,367

2,976

702

^

21,297

Net income (loss)

6,348

4,367

2,976

4,214

^

17,905

Income (loss) per common share:

Basic

$

0.13

$

0.37

Diluted

0.12

0.35

Weighted average number of shares:

Basic

48,743

48,743

Diluted (1)

53,942

51,772


__________________

^

- 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 June 30, 2021 was $22.94, 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)

Three months ended June 30, 2021

Transition expenses related to San Jose expansion project

$

609

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

93

Subtotal

702

Non-cash interest expense

3,586

Non-GAAP tax adjustment *

(74

)

Total Other

$

4,214


__________________
* - 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 June 30, 2020

GAAP

Compensation

Amortization

Other

Non-GAAP

Net sales

$

98,637

$

98,637

Gross profit

41,894

474

19

42,387

Gross margin

42.5

%

43.0

%

Operating expenses

41,485

(2,500

)

(3,834

)

(794

)

34,357

Operating income (loss)

409

2,974

3,834

813

^

8,030

Net income (loss)

(8,302

)

2,974

3,834

7,009

^

5,515

Income (loss) per common share:

Basic

$

(0.17

)

$

0.11

Diluted

(0.17

)

0.11

Weighted average number of shares:

Basic

48,109

48,109

Diluted

48,109

48,818


__________________
^ - See table below for additional details.

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

Three months ended June 30, 2020

Restructuring

$

472

Asset impairment

281

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

60

Subtotal

813

Non-cash interest expense

3,457

Loss on extinguishment of debt

3,046

Non-GAAP tax adjustment *

(307

)

Total Other

$

7,009


__________________
* - 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

June 30, 2021

June 30, 2020

GAAP Net income (loss)

$

6,348

$

(8,302

)

Share-based compensation

4,367

2,974

Amortization

2,976

3,834

Restructuring

472

Asset impairment

281

Transition expenses related to San Jose expansion project

609

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

93

60

Interest (income) expense, net

6,585

5,614

Loss on extinguishment of debt

3,046

Income tax expense (benefit)

319

51

Non-GAAP Operating income (loss)

$

21,297

$

8,030

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

September 30, 2021

GAAP

Compensation

Amortization

Other

Non-GAAP

Net sales

$

135

-

$

155

$

135

-

$

155

Gross profit

55

-

67

1

56

-

68

Gross margin

41

%

-

43

%

41

%

-

43

%

Operating expenses

47

-

49

(3

)

(3

)

(1

)

40

-

42

Operating income (loss)

8

-

18

4

3

1

16

-

26

Net income (loss)

$

1

-

$

11

4

3

5

$

13

-

$

23

Income (loss) per diluted common share

$

0.02

-

$

0.20

$

0.25

-

$

0.44

Weighted average number of shares (1)

54

54

52

52



__________________

(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.


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 September 30, 2021

GAAP Net income (loss)

$

1

-

$

11

Share-based compensation

4

-

4

Amortization

3

-

3

Interest expense, net

7

-

7

Other

1

-

1

Non-GAAP Operating income (loss)

$

16

-

$

26

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.