EX-99.1 2 a08-20039_1ex99d1.htm EX-99.1

EXHIBIT 99.1

 

NEWS

 

Veeco Instruments Inc., Terminal Drive, Plainview,  NY 11803 Tel. 1 516-677-0200 Fax. 1 516-677-0380

 

FOR IMMEDIATE RELEASE

 

Financial Contact: Debra Wasser, SVP Investor Relations & Corporate Communications, 1 516-677-0200 x1472

Media Contact:  Fran Brennen, Senior Director Marcom, 1 516-677-0200 x1222

 

VEECO ANNOUNCES SECOND QUARTER AND SIX MONTH 2008 FINANCIAL RESULTS

 

Plainview, NY, July 28, 2008 — Veeco Instruments Inc. (Nasdaq: VECO) today announced its financial results for the second quarter and six months ended June 30, 2008. Veeco reports its results on a generally accepted accounting principles (“GAAP”) basis, and also provides results excluding certain items.  Investors should refer to the attached table for details of the reconciliation of GAAP operating income to earnings excluding certain items.

 

Veeco will host a conference call reviewing these results at 5:00 pm EDT today at 1-877-856-1964 (toll free) or 1-719-325-4812.  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 through midnight on August 12, 2008 at 888-203-1112 or 719-457-0820, using passcode 3021674, or on the Veeco website. Please also see the Veeco website for a slide presentation reviewing financial data.

 

Second Quarter 2008 Highlights

 

·                 Revenue was $114.4 million, up 16% compared to $98.8 million last year, and ahead of guidance of $102-$110 million;

·                 Bookings were $136.5 million, up 21% compared to $112.5 million last year, and ahead of guidance of $110-$118 million;

·                 Net income was $4.2 million, or $0.13 per share, compared to a net loss of ($2.6) million, or ($0.08) per share, last year.  Veeco’s guidance was for GAAP EPS to be between ($0.07) – $0.02 per share.

·                 Veeco’s earnings per share, excluding certain items, was $0.16 compared to earnings per share of $0.05 last year, ahead of Veeco’s guidance of $0.03-$0.09 per share.

 

John R. Peeler, Veeco’s Chief Executive Officer, commented, “We are pleased to report second quarter results that were ahead of our guidance for bookings, revenues and earnings.  Second quarter LED & Solar Process Equipment revenues were $45.1 million, up 61% compared to the prior year and 7% sequentially, representing our largest segment. Data Storage Process Equipment revenues increased to $36.7 million, up 15% from last year and 52% sequentially, with some customer acceleration of delivery dates for Veeco equipment.  Metrology revenue was $32.6 million, down 16% compared to prior year and 10% sequentially, primarily due to continued weak semiconductor and research end market conditions.”

 

“Veeco’s $136.5 million in second quarter bookings reflect the best quarterly performance we have had in two years. LED & Solar bookings were $52.1 million, up 43% compared to last year and 35% sequentially, with customers making significant technology and capacity investments. Our Data Storage business reported second quarter orders of $51.7 million, up approximately 25% from the prior year and 27% sequentially, as key hard drive manufacturers invested in equipment capacity aligned to their wafer size change programs.  Veeco’s Metrology bookings were $32.7 million, declining 6% versus the prior year but increasing 9% on a sequential basis.”

 

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Mr. Peeler added, “We completed the purchase of Mill Lane Engineering, a key equipment supplier to Global Solar Energy Inc., during the second quarter, expanding Veeco’s solar product offerings to include web coaters for flexible photovoltaic applications. As expected, this business had no contribution to our second quarter revenue due to purchase accounting requirements and the timing of the completion of the acquisition, and no new orders for web coaters were received during the quarter.”

 

Second Quarter 2008 Summary

 

Veeco’s revenue for the second quarter of 2008 was $114.4 million, compared to $98.8 million in the second quarter of 2007. Second quarter 2008 operating income was $6.2 million compared with an operating loss of ($1.0) million in the second quarter of 2007.  Veeco’s second quarter 2008 earnings before interest, taxes and amortization excluding certain charges (EBITA) was $8.7 million, compared to $2.8 million last year.  Second quarter 2008 net income was $4.2 million, or $0.13 per share, compared to a net loss of ($2.6) million, or ($0.08) per share, last year. Excluding amortization expenses and using a 35% tax rate in both periods and certain charges in 2007, second quarter 2008 earnings per share were $0.16, compared to $0.05 in 2007.

 

Six Month 2008 Summary

 

Veeco’s revenue for the first six months of 2008 was $216.8 million, compared to $197.9 million in the first six months of 2007. Six month 2008 operating income was $6.3 million compared with $0.7 million in the first six months of 2007.  Veeco’s EBITA was $13.9 million for the first six months of 2008, compared to $8.5 million last year.  Net income was $2.6 million, or $0.08 per share in the first six months of 2008, compared to a net loss of ($2.3) million, or ($0.07) per share, last year. Excluding certain charges, amortization expenses and using a 35% tax rate both periods, earnings per share were $0.25 in the first six months of 2008, compared to $0.15 in the first six months of 2007.

 

Outlook

 

The Company forecasts third quarter 2008 revenues to be in the range of $113-$118 million.  Veeco’s earnings per share are currently forecasted to be between ($0.12) – ($0.03) on a GAAP basis.  In the third quarter Veeco will incur a charge to earnings of $3.7 million related to the expense associated with the mutually agreed termination of the employment agreement of Veeco’s former CEO Edward Braun, following the successful completion of the CEO transition (Mr. Braun remains Veeco’s Chairman). In addition, Veeco will also incur a $0.7 million third quarter charge for restructuring in Metrology, and a $0.4 million charge related to the required purchase accounting adjustment to write up inventory to fair value in connection with the purchase of Mill Lane Engineering.  Excluding these charges and amortization of $3.1 million, and using a 35% tax rate, Veeco’s third quarter earnings per share are currently forecasted to be between $0.10 to $0.15 on a non-GAAP basis. Veeco currently expects that its third quarter 2008 bookings will be in the range of $113-$118 million, with some normal seasonality anticipated.

 

Mr. Peeler commented, “We are pleased that at the mid-point of the year, even with the backdrop of difficult overall economic conditions, Veeco is achieving results ahead of our original expectations.  We remain on track to significantly improve Veeco’s performance on both the top and bottom line in 2008.  We currently forecast that 2008 revenues will be between $450 and 455 million.”

 

About Veeco

 

Veeco Instruments Inc. manufactures enabling solutions for customers in the HB-LED, solar, data storage, semiconductor, scientific research and industrial markets. We have leading technology positions in our three businesses: LED & Solar Process Equipment, Data Storage Process Equipment, and Metrology Instruments. Veeco’s manufacturing and engineering facilities are located in New York, New Jersey, California, Colorado, Arizona and Minnesota. Global sales and service offices are located throughout the U.S., Europe, Japan and APAC. http://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, 2007 and in our subsequent

 

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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.

 

-financial tables attached-

 

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Veeco Instruments Inc. and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

 

 

Three months ended
June 30,

 

Six months ended
June 30,

 

 

 

2008

 

2007

 

2008

 

2007

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

114,449

 

$

98,769

 

$

216,756

 

$

197,935

 

Cost of sales

 

66,719

 

56,524

 

126,400

 

111,995

 

Gross profit

 

47,730

 

42,245

 

90,356

 

85,940

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Selling, general and administrative expense

 

24,311

 

23,818

 

46,939

 

46,624

 

Research and development expense

 

15,145

 

15,903

 

29,871

 

31,292

 

Amortization expense

 

2,426

 

2,368

 

4,382

 

6,277

 

Restructuring expense

 

—

 

1,445

 

2,875

 

1,445

 

Asset impairment charge

 

—

 

—

 

285

 

—

 

Other income, net

 

(382

)

(279

)

(378

)

(426

)

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

6,230

 

(1,010

)

6,382

 

728

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

969

 

772

 

1,861

 

1,591

 

Gain on extinguishment of debt

 

—

 

—

 

—

 

(738

)

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes and noncontrolling interest

 

5,261

 

(1,782

)

4,521

 

(125

)

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

1,129

 

1,042

 

2,048

 

2,536

 

Noncontrolling interest

 

(70

)

(229

)

(146

)

(359

)

Net income (loss)

 

$

4,202

 

$

(2,595

)

$

2,619

 

$

(2,302

)

 

 

 

 

 

 

 

 

 

 

Income (loss) per common share:

 

 

 

 

 

 

 

 

 

Net income (loss) per common share

 

$

0.13

 

$

(0.08

)

$

0.08

 

$

(0.07

)

Diluted net income (loss) per common share

 

$

0.13

 

$

(0.08

)

$

0.08

 

$

(0.07

)

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

31,255

 

30,926

 

31,197

 

30,912

 

Diluted weighted average shares outstanding

 

31,590

 

30,926

 

31,435

 

30,912

 

 


 

Veeco Instruments Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

 

 

 

June 30,

 

December 31,

 

 

 

2008

 

2007

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

109,644

 

$

117,083

 

Accounts receivable, net

 

76,413

 

75,207

 

Inventories, net

 

115,025

 

98,594

 

Prepaid expenses and other current assets

 

6,741

 

8,901

 

Deferred income taxes

 

2,808

 

2,649

 

Total current assets

 

310,631

 

302,434

 

 

 

 

 

 

 

Property, plant and equipment, net

 

66,458

 

66,142

 

Goodwill

 

101,828

 

100,898

 

Other assets, net

 

63,842

 

59,860

 

Total assets

 

$

542,759

 

$

529,334

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

37,091

 

$

36,639

 

Accrued expenses

 

65,532

 

60,201

 

Deferred profit

 

2,890

 

3,250

 

Income taxes payable

 

1,086

 

2,278

 

Current portion of long-term debt

 

25,422

 

25,550

 

Total current liabilities

 

132,021

 

127,918

 

 

 

 

 

 

 

Deferred income taxes

 

4,673

 

3,712

 

Long-term debt

 

120,939

 

121,035

 

Other non-current liabilities

 

2,514

 

1,978

 

 

 

 

 

 

 

Noncontrolling interest

 

868

 

1,014

 

 

 

 

 

 

 

Shareholders’ equity

 

281,744

 

273,677

 

Total liabilities and shareholders’ equity

 

$

542,759

 

$

529,334

 

 


 

Veeco Instruments Inc. and Subsidiaries

Reconciliation of operating income (loss) to earnings excluding certain items

(In thousands, except per share data)

(Unaudited)

 

 

 

Three months ended
June 30,

 

Six months ended
June 30,

 

 

 

2008

 

2007

 

2008

 

2007

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

6,230

 

$

(1,010

)

$

6,382

 

$

728

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization expense

 

2,426

 

2,368

 

4,382

 

6,277

 

Restructuring expense

 

—

 

1,445

 

2,875

(1)

1,445

 

Asset impairment charge

 

—

 

—

 

285

(2)

—

 

 

 

 

 

 

 

 

 

 

 

Earnings before interest, income taxes and amortization excluding certain items (“EBITA”)

 

8,656

 

2,803

 

13,924

 

8,450

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

969

 

772

 

1,861

 

1,591

 

Gain on extinguishment of debt

 

—

 

—

 

—

 

(738

)(3)

Adjustment to exclude gain on extinguishment of debt

 

—

 

—

 

—

 

738

 

 

 

 

 

 

 

 

 

 

 

Earnings excluding certain items before income taxes

 

7,687

 

2,031

 

12,063

 

6,859

 

 

 

 

 

 

 

 

 

 

 

Income tax provision at 35%

 

2,690

 

711

 

4,222

 

2,401

 

Noncontrolling interest, net of income tax provision at 35%

 

(46

)

(149

)

(95

)

(233

)

 

 

 

 

 

 

 

 

 

 

Earnings excluding certain items

 

$

5,043

 

$

1,469

 

$

7,936

 

$

4,691

 

 

 

 

 

 

 

 

 

 

 

Earnings excluding certain items per diluted share

 

$

0.16

 

$

0.05

 

$

0.25

 

$

0.15

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average shares outstanding

 

31,590

 

31,263

 

31,435

 

31,278

 

 

(1) During the first quarter of 2008, the Company recorded a restructuring charge of $2.9 million, consisting of $2.6 million of costs associated with the consolidation and relocation of the lease for our Corporate headquarters, and $0.3 million of personnel severance costs.

 

(2) During the first quarter of 2008, the Company recorded a $0.3 million asset impairment charge related to fixed asset write-offs associated with the consolidation and relocation of our Corporate headquarters.

 

(3) During the first quarter of 2007, the Company repurchased $56.0 million aggregate principal amount of its 4.125% convertible subordinated notes.  As a result of these repurchases, the Company recorded a gain from the early extinguishment of debt in the amount of $0.7 million.

 

NOTE - The above reconciliation is intended to present Veeco’s operating results, excluding certain items and providing income taxes at a 35% statutory rate. This reconciliation is not in accordance with, or an alternative method for, generally accepted accounting principles in the United States, and may be different from similar measures presented by other companies. Management of the Company evaluates performance of its business units based on 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 EBITA reports baseline performance and thus provides useful information.

 


 

Veeco Instruments Inc. and Subsidiaries

Segment Revenues, Bookings, and Reconciliation

of Operating Income (Loss) to EBITA

(In millions)

(Unaudited)

 

 

 

Three months ended

 

Six months ended

 

 

 

June 30,

 

June 30,

 

June 30,

 

June 30,

 

 

 

2008

 

2007

 

2008

 

2007

 

LED & Solar Process Equipment

 

 

 

 

 

 

 

 

 

Bookings

 

$

52.1

 

$

36.4

 

$

90.8

 

$

72.8

 

Revenues

 

45.1

 

28.0

 

87.2

 

50.4

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

7.8

 

2.8

 

15.8

 

2.3

 

Amortization expense

 

1.0

 

1.0

 

1.5

 

3.3

 

EBITA

 

8.8

 

3.8

 

17.3

 

5.6

 

 

 

 

 

 

 

 

 

 

 

Data Storage Process Equipment

 

 

 

 

 

 

 

 

 

Bookings

 

51.7

 

41.3

 

92.3

 

73.6

 

Revenues

 

36.7

 

32.0

 

60.9

 

67.7

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

4.3

 

0.7

 

1.7

 

2.1

 

Amortization expense

 

0.9

 

0.9

 

1.9

 

1.9

 

Restructuring expense

 

—

 

—

 

0.1

 

—

 

EBITA

 

5.2

 

1.6

 

3.7

 

4.0

 

 

 

 

 

 

 

 

 

 

 

Metrology

 

 

 

 

 

 

 

 

 

Bookings

 

32.7

 

34.8

 

62.7

 

72.0

 

Revenues

 

32.6

 

38.7

 

68.7

 

79.8

 

 

 

 

 

 

 

 

 

 

 

Operating (loss) income

 

(1.6

)

(1.3

)

(0.4

)

2.3

 

Amortization expense

 

0.4

 

0.3

 

0.8

 

0.7

 

Restructuring expense

 

—

 

1.4

 

0.2

 

1.4

 

EBITA

 

(1.2

)

0.4

 

0.6

 

4.4

 

 

 

 

 

 

 

 

 

 

 

Unallocated Corporate

 

 

 

 

 

 

 

 

 

Operating loss

 

(4.2

)

(3.3

)

(10.8

)

(6.0

)

Amortization expense

 

0.1

 

0.2

 

0.2

 

0.4

 

Restructuring expense

 

—

 

0.1

 

2.6

 

0.1

 

Asset impairment charge

 

—

 

—

 

0.3

 

—

 

EBITA

 

(4.1

)

(3.0

)

(7.7

)

(5.5

)

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

Bookings

 

136.5

 

112.5

 

245.8

 

218.4

 

Revenues

 

114.4

 

98.7

 

216.8

 

197.9

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

6.3

 

(1.1

)

6.3

 

0.7

 

Amortization expense

 

2.4

 

2.4

 

4.4

 

6.3

 

Restructuring expense

 

—

 

1.5

 

2.9

 

1.5

 

Asset impairment charge

 

—

 

—

 

0.3

 

—

 

EBITA

 

$

8.7

 

$

2.8

 

$

13.9

 

$

8.5

 

 

** Refer to footnotes on Reconciliation of operating income to earnings excluding certain items