EX-99.2 3 a10-19331_1ex99d2.htm EX-99.2

Exhibit 99.2

 

VEECO INSTRUMENTS INC. AND SUBSIDIARIES

 

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

The following unaudited pro forma condensed consolidated financial statements of Veeco Instruments Inc. (the “Company” or “Veeco”) are included herein:

 

·                  Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2010;

 

·                  Unaudited Pro Forma Condensed Consolidated Statement of Operations for the six months ended June 30, 2010 and 2009;

 

·                  Unaudited Pro Forma Condensed Consolidated Statement of Operations for the years ended December 31, 2009, 2008 and 2007; and

 

·                  Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements.

 

The above referenced unaudited pro forma condensed consolidated financial statements are based on historical financial statements of the Company after giving effect to the divestiture of the Company’s Metrology business and related assets and liabilities (the “Divested Business”) pursuant to a Stock Purchase Agreement (the “Agreement”), by and among the Company and Bruker Corporation. At the closing of the divestiture, the Company received $229.4 million in cash consideration for the Divested Business. The final purchase price is subject to certain post-closing adjustments related to final working capital.

 

These unaudited pro forma condensed consolidated financial statements have been prepared by applying pro forma adjustments to the unaudited condensed consolidated financial statements included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010 (the “Second Quarter 2010 Form 10-Q”) and the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the three year period ended December 31, 2009 (the “2009 Form 10-K”). The unaudited pro forma condensed consolidated balance sheet has been adjusted to give effect to the divestiture as if the divestiture had been consummated as of June 30, 2010. The unaudited pro forma condensed consolidated statements of operations have been adjusted to give effect to the divestiture as if the divestiture had been consummated as of the following dates:

 

·                  January 1, 2010 for the six months ended June 30, 2010

 

·                  January 1, 2009 for the year ended December 31, 2009

 

·                  January 1, 2009 for the six months ended June 30, 2009

 

·                  January 1, 2008 for the year ended December 31, 2008

 

·                  January 1, 2007 for the year ended December 31, 2007

 

In creating the unaudited pro forma condensed consolidated financial statements, the primary adjustments to the historical financial statements were (i) the removal of the assets sold and liabilities assumed in the divestiture, (ii) the receipt of proceeds received in connection with the divestiture, (iii) the removal of the results of operations attributable to the Divested Business that were sold and (iv) the recognition of fees and other costs related to the divestiture.

 

The pro forma adjustments, as described in the notes to these unaudited pro forma condensed consolidated financial statements, are based on information currently available to management, and the

 


 

Company believes that these pro forma adjustments are reasonable, factually supportable and directly attributable to the divestiture. The unaudited pro forma condensed consolidated financial statements are presented for informational purposes only and are not intended to represent and may not be indicative of operating results or financial position that would have occurred had the divestiture been completed as of June 30, 2010 (in the case of the unaudited pro forma condensed consolidated balance sheet) or as of January 1, 2010, 2009, 2008 and 2007, respectively in the case of the unaudited pro forma condensed consolidated statements of operations, nor are they intended to represent and they may not be indicative of future operating results or financial position of the Company. These unaudited pro forma condensed consolidated financial statements and the accompanying notes should be read together with the Company’s audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2009, and Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) included in the 2009 Form 10-K, as well as in conjunction with the Company’s unaudited condensed consolidated financial statements and accompanying notes as of and for the quarterly periods ended March 31, 2010 and June 30, 2010, and the MD&A included in the Company’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2010 and June 30, 2010.

 


 

VEECO INSTRUMENTS INC. AND SUBSIDIARIES

 

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

As of June 30, 2010

(In thousands)

 

 

 

Veeco

 

 

 

Veeco

 

 

 

Historical (a)

 

Adjustments

 

Pro Forma

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

361,382

 

$

200,262

(b)

$

561,644

 

Restricted cash

 

 

—

 

 

22,943

(b)

 

22,943

 

Short-term investments

 

53,500

 

—

 

53,500

 

Accounts receivable, net

 

140,722

 

(23,646

)(c)

117,076

 

Inventories

 

84,210

 

(22,225

)(c)

61,985

 

Prepaid expenses and other current assets

 

18,927

 

(1,254

)(c)

17,673

 

Deferred income taxes

 

2,963

 

—

 

2,963

 

Total current assets

 

661,704

 

176,080

 

837,784

 

Property, plant and equipment at cost, net

 

59,118

 

(13,370

)(c)

45,748

 

Goodwill

 

59,422

 

(7,419

)(c)

52,003

 

Intangible assets, net

 

25,211

 

(5,916

)(c)

19,295

 

Other assets

 

911

 

—

 

911

 

Total assets

 

$

806,366

 

$

149,375

 

$

955,741

 

Liabilities and equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

50,973

 

$

(5,795

)(d)

$

45,178

 

Accrued expenses and other current liabilities

 

158,383

 

(8,183

)(d)

150,200

 

Deferred profit

 

7,863

 

—

 

7,863

 

Income taxes payable

 

14,149

 

57,160

(e)

71,309

 

Current portion of long-term debt

 

220

 

—

 

220

 

Total current liabilities

 

231,588

 

43,182

 

274,770

 

Long-term debt

 

102,352

 

—

 

102,352

 

Other liabilities

 

411

 

—

 

411

 

 

 

 

 

 

 

 

 

Equity

 

472,015

 

106,193

(f)

578,208

 

 

 

 

 

 

 

 

 

Total liabilities and equity

 

$

806,366

 

$

149,375

 

$

955,741

 

 

See the notes to these unaudited pro forma condensed consolidated financial statements.

 


 

VEECO INSTRUMENTS INC. AND SUBSIDIARIES

 

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2010

(In thousands, except per share data)

 

 

 

Veeco

 

 

 

Veeco

 

 

 

Historical (g)

 

Adjustments

 

Pro Forma

 

Net sales

 

$

416,271

 

$

(60,131

)(h)

$

356,140

 

Cost of sales

 

232,164

 

(31,565

)(h)

200,599

 

Gross profit

 

184,107

 

(28,566

)

155,541

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general, and administrative expense

 

50,707

 

(12,422

)(i)

38,285

 

Research and development expense

 

36,990

 

(7,434

)(h)

29,556

 

Amortization expense

 

3,319

 

(844

)(h)

2,475

 

Restructuring expense

 

(179

)

—

 

(179

)

Other expense, net

 

359

 

(9

)(h)

350

 

Total operating expenses

 

91,196

 

(20,709

)

70,487

 

Operating income

 

92,911

 

(7,857

)

85,054

 

Interest expense

 

3,863

 

—

 

3,863

 

Interest income

 

(319

)

—

 

(319

)

Income from continuing operations before income taxes

 

89,367

 

(7,857

)

81,510

 

Income tax provision

 

10,930

 

(2,175

)(j)

8,755

 

Income from continuing operations attributable to Veeco

 

$

78,437

 

$

(5,682

)

$

72,755

 

 

 

 

 

 

 

 

 

Income per common share from continuing operations attributable to Veeco:

 

 

 

 

 

 

 

Basic

 

$

2.00

 

 

 

$

1.85

 

Diluted

 

$

1.88

 

 

 

$

1.75

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic

 

39,283

 

 

 

39,283

 

Diluted

 

41,683

 

 

 

41,683

 

 

See the notes to these unaudited pro forma condensed consolidated financial statements.

 


 

VEECO INSTRUMENTS INC. AND SUBSIDIARIES

 

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2009

(In thousands, except per share data)

 

 

 

Veeco

 

 

 

Veeco

 

 

 

Historical (k)

 

Adjustments

 

Pro Forma

 

Net sales

 

$

380,149

 

$

(97,737

)(l)

$

282,412

 

Cost of sales

 

228,587

 

(57,410

)(l)

171,177

 

Gross profit

 

151,562

 

(40,327

)

111,235

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general, and administrative expense

 

85,455

 

(23,304

)(l)

62,151

 

Research and development expense

 

57,430

 

(13,947

)(l)

43,483

 

Amortization expense

 

7,338

 

(2,170

)(l)

5,168

 

Restructuring expense

 

7,680

 

(2,843

)(l)

4,837

 

Asset impairment charge

 

304

 

—

 

304

 

Other expense, net

 

790

 

(766

)(l)

24

 

Total operating expenses

 

158,997

 

(43,030

)

115,967

 

Operating loss

 

(7,435

)

2,703

 

(4,732

)

Interest expense

 

7,732

 

—

 

7,732

 

Interest income

 

(882

)

—

 

(882

)

Loss from continuing operations before income taxes and noncontrolling interest

 

(14,285

)

2,703

 

(11,582

)

Income tax provision

 

1,347

 

1,300

(m)

2,647

 

Loss from continuing operations before noncontrolling interest

 

(15,632

)

1,403

 

(14,229

)

Loss attributable to noncontrolling interest

 

(65

)

—

 

(65

)

Loss from continuing operations attributable to Veeco

 

$

(15,567

)

$

1,403

 

$

(14,164

)

 

 

 

 

 

 

 

 

Loss per common share from continuing operations attributable to Veeco:

 

 

 

 

 

 

 

Basic and Diluted

 

$

(0.48

)

 

 

$

(0.43

)

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic and Diluted

 

32,628

 

 

 

32,628

 

 

See the notes to these unaudited pro forma condensed consolidated financial statements.

 


 

VEECO INSTRUMENTS INC. AND SUBSIDIARIES

 

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2009

(In thousands, except per share data)

 

 

 

Veeco

 

 

 

Veeco

 

 

 

Historical (n)

 

Adjustments

 

Pro Forma

 

Net sales

 

$

134,869

 

$

(46,287

)(o)

$

88,582

 

Cost of sales

 

90,103

 

(28,678

)(o)

61,425

 

Gross profit

 

44,766

 

(17,609

)

27,157

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general, and administrative expense

 

38,429

 

(12,134

)(o)

26,295

 

Research and development expense

 

26,049

 

(7,384

)(o)

18,665

 

Amortization expense

 

3,660

 

(1,155

)(o)

2,505

 

Restructuring expense

 

6,375

 

(2,386

)(o)

3,989

 

Asset impairment charge

 

304

 

—

 

304

 

Other expense, net

 

1,409

 

(734

)(o)

675

 

Total operating expenses

 

76,226

 

(23,793

)

52,433

 

Operating loss

 

(31,460

)

6,184

 

(25,276

)

Interest expense

 

3,880

 

—

 

3,880

 

Interest income

 

(473

)

—

 

(473

)

Loss from continuing operations before income taxes and noncontrolling interest

 

(34,867

)

6,184

 

(28,683

)

Income tax provision

 

780

 

776

(p)

1,556

 

Loss from continuing operations before noncontrolling interest

 

(35,647

)

5,408

 

(30,239

)

Loss attributable to noncontrolling interest

 

(65

)

—

 

(65

)

Loss from continuing operations attributable to Veeco

 

$

(35,582

)

$

5,408

 

$

(30,174

)

 

 

 

 

 

 

 

 

Loss per common share from continuing operations attributable to Veeco:

 

 

 

 

 

 

 

Basic and Diluted

 

$

(1.13

)

 

 

$

(0.96

)

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic and Diluted

 

31,506

 

 

 

31,506

 

 

See the notes to these unaudited pro forma condensed consolidated financial statements.

 


 

VEECO INSTRUMENTS INC. AND SUBSIDIARIES

 

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2008

(In thousands, except per share data)

 

 

 

Veeco

 

 

 

Veeco

 

 

 

Historical (q)

 

Adjustments

 

Pro Forma

 

Net sales

 

$

442,809

 

$

(127,874

)(r)

$

314,935

 

Cost of sales

 

266,215

 

(74,551

)(r)

191,664

 

Gross profit

 

176,594

 

(53,323

)

123,271

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general, and administrative expense

 

92,838

 

(32,296

)(r)

60,542

 

Research and development expense

 

60,353

 

(20,745

)(r)

39,608

 

Amortization expense

 

10,745

 

(1,881

)(r)

8,864

 

Restructuring expense

 

10,562

 

(1,138

)(r)

9,424

 

Asset impairment charge

 

73,322

 

(21,935

)(r)

51,387

 

Other income, net

 

(668

)

254

(r)

(414

)

Total operating expenses

 

247,152

 

(77,741

)

169,411

 

Operating loss

 

(70,558

)

24,418

 

(46,140

)

Interest expense

 

9,317

 

—

 

9,317

 

Interest income

 

(2,588

)

—

 

(2,588

)

Gain on extinguishment of debt

 

(3,758

)

—

 

(3,758

)

Loss from continuing operations before income taxes and noncontrolling interest

 

(73,529

)

24,418

 

(49,111

)

 

 

 

 

 

 

 

 

Income tax provision

 

1,892

 

(170

)(s)

1,722

 

Loss from continuing operations before noncontrolling interest

 

(75,421

)

24,588

 

(50,833

)

Loss attributable to noncontrolling interest

 

(230

)

—

 

(230

)

Loss from continuing operations attributable to Veeco

 

$

(75,191

)

$

24,588

 

$

(50,603

)

 

 

 

 

 

 

 

 

Loss per common share from continuing operations attributable to Veeco:

 

 

 

 

 

 

 

Basic and Diluted

 

$

(2.40

)

 

 

$

(1.61

)

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic and Diluted

 

31,347

 

 

 

31,347

 

 

See the notes to these unaudited pro forma condensed consolidated financial statements.

 


 

VEECO INSTRUMENTS INC. AND SUBSIDIARIES

 

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2007

(In thousands, except per share data)

 

 

 

Veeco

 

 

 

Veeco

 

 

 

Historical (t)

 

Adjustments

 

Pro Forma

 

Net sales

 

$

402,475

 

$

(150,444

)(u)

$

252,031

 

Cost of sales

 

244,964

 

(83,113

)(u)

161,851

 

Gross profit

 

157,511

 

(67,331

)

90,180

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general, and administrative expense

 

90,972

 

(34,766

)(u)

56,206

 

Research and development expense

 

61,174

 

(22,838

)(u)

38,336

 

Amortization expense

 

10,250

 

(1,486

)(u)

8,764

 

Restructuring expense

 

6,726

 

(1,952

)(u)

4,774

 

Asset impairment charge

 

1,068

 

—

 

1,068

 

Other income, net

 

(618

)

(105

)(u)

(723

)

Total operating expenses

 

169,572

 

(61,147

)

108,425

 

Operating loss

 

(12,061

)

(6,184

)

(18,245

)

Interest expense

 

8,827

 

—

 

8,827

 

Interest income

 

(3,963

)

—

 

(3,963

)

Gain on extinguishment of debt

 

(738

)

—

 

(738

)

Loss from continuing operations before income taxes and noncontrolling interest

 

(16,187

)

(6,184

)

(22,371

)

Income tax provision

 

3,651

 

(2,367

)(v)

1,284

 

Loss from continuing operations before noncontrolling interest

 

(19,838

)

(3,817

)

(23,655

)

Loss attributable to noncontrolling interest

 

(628

)

—

 

(628

)

Loss from continuing operations attributable to Veeco

 

$

(19,210

)

$

(3,817

)

$

(23,027

)

 

 

 

 

 

 

 

 

Loss per common share from continuing operations attributable to Veeco:

 

 

 

 

 

 

 

Basic and Diluted

 

$

(0.62

)

 

 

$

(0.74

)

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic and Diluted

 

31,020

 

 

 

31,020

 

 

See the notes to these unaudited pro forma condensed consolidated financial statements.

 


 

VEECO INSTRUMENTS INC. AND SUBSIDIARIES

 

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

(a)       Veeco Historical—represents Veeco’s historical unaudited condensed consolidated balance sheet as of June 30, 2010 derived from the Company’s unaudited condensed consolidated financial statements included in the Second Quarter 2010 Form 10-Q.

 

(b)       Cash and Cash Equivalents—represents the net cash proceeds from the divestiture.

 

 

 

June 30, 2010

 

 

 

(in thousands)

 

Cash consideration before adjustments

 

$

229,430

 

Transaction costs (1)

 

(6,154

)

Divested cash balance

 

(71

)

Reclass to restricted cash for escrow requirements

 

(22,943

)

Net proceeds

 

$

223,205

 

 

(1)    Represents investment banker, legal and accounting fees incurred related to the transaction.

 

(c)        Divested Assets—represents the elimination of historical amounts of the divested assets to reflect the pro forma effect of the sale of these assets to Bruker Corporation.

 

(d)       Assumed Liabilities—represents the elimination of historical amounts of the assumed liabilities to reflect the pro forma effect of the assumption of these liabilities by Bruker Corporation.

 

(e)        Income Taxes Payable—represents the pro forma tax effect of the net gain on the sale of assets based on the statutory rate of 35%.

 

(f)           Equity—represents Veeco’s net gain on the sale of the Divested Business.

 

(g)       Veeco Historical—represents Veeco’s historical unaudited condensed consolidated statement of operations for the six months ended June 30, 2010 derived from the Company’s unaudited condensed consolidated financial statements included in the Second Quarter 2010 Form 10-Q.

 

(h)       Divested Operations— represents the elimination of historical operations of the Divested Business that were not classified as discontinued operations in Veeco’s historical unaudited consolidated statements of operations in Veeco’s audited consolidated statements of operations for the six months ended June 30, 2010 included in the Second Quarter 2010 Form 10-Q.

 

(i)          Selling, General and Administrative Expense—represents S,G&A expense allocated to the Divested Business and certain transaction costs, as follows:

 

 

 

Six Months Ended

 

 

 

June 30, 2010

 

 

 

(in thousands)

 

Historical S,G&A Expense

 

$

50,707

 

S,G&A expense allocated to the divested business

 

(12,015

)

Transaction costs

 

(407

)

Pro forma adjustment

 

(12,422

)

Pro forma S,G&A Expense

 

$

38,285

 

 

(j)           Income Tax Provision —represents the pro forma tax effect of using the ‘incremental approach’ where the tax provision for pro forma earnings is calculated without regard to other items.

 


 

(k)       Veeco Historical—represents Veeco’s historical audited consolidated statement of operations for the year ended December 31, 2009 derived from the Company’s audited consolidated financial statements included in the 2009 Form 10-K.

 

(l)          Divested Operations— represents the elimination of historical operations of the Divested Business that were not classified as discontinued operations in Veeco’s historical unaudited consolidated statements of operations in Veeco’s audited consolidated statements of operations for the year ended December 31, 2009 included in the 2009 Form 10-K.

 

(m)     Income Tax Provision— represents the pro forma tax effect of using the ‘incremental approach’ where the tax provision for pro forma earnings is calculated without regard to other items.

 

(n)       Veeco Historical—represents Veeco’s historical unaudited condensed consolidated statement of operations for the six months ended June 30, 2009 derived from the Company’s unaudited condensed consolidated financial statements included in the Second Quarter 2010 Form 10-Q.

 

(o)       Divested Operations— represents the elimination of historical operations of the Divested Business that were not classified as discontinued operations in Veeco’s historical unaudited consolidated statements of operations in Veeco’s audited consolidated statements of operations for the six months ended June 30, 2009 included in the Second Quarter 2010 Form 10-Q.

 

(p)       Income Tax Provision— represents the pro forma tax effect of using the ‘incremental approach’ where the tax provision for pro forma earnings is calculated without regard to other items.

 

(q)       Veeco Historical—represents Veeco’s historical audited consolidated statement of operations for the year ended December 31, 2008 derived from the Company’s audited consolidated financial statements included in the 2009 Form 10-K.

 

(r)         Divested Operations— represents the elimination of historical operations of the Divested Business that were not classified as discontinued operations in Veeco’s historical unaudited consolidated statements of operations in Veeco’s audited consolidated statements of operations for the year ended December 31, 2008 included in the 2009 Form 10-K.

 

(s)         Income Tax Provision— represents the pro forma tax effect of using the ‘incremental approach’ where the tax provision for pro forma earnings is calculated without regard to other items.

 

(t)          Veeco Historical—represents Veeco’s historical audited consolidated statement of operations for the year ended December 31, 2007 derived from the Company’s audited consolidated financial statements included in the 2009 Form 10-K.

 

(u)       Divested Operations— represents the elimination of historical operations of the Divested Business that were not classified as discontinued operations in Veeco’s historical unaudited consolidated statements of operations in Veeco’s audited consolidated statements of operations for the year ended December 31, 2007 included in the 2009 Form 10-K.

 

(v)        Income Tax Provision— represents the pro forma tax effect of using the ‘incremental approach’ where the tax provision for pro forma earnings is calculated without regard to other items.