EX-99.1 3 a11-28425_1ex99d1.htm EX-99.1

EXHIBIT 99.1

 

NEWS

 

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

 

FOR IMMEDIATE RELEASE

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

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

 

VEECO REPORTS THIRD QUARTER 2011 FINANCIAL RESULTS

 

Plainview, NY, October 24, 2011 — Veeco Instruments Inc. (Nasdaq: VECO) announced its financial results for the third quarter ended September 30, 2011.  Veeco reports its results on a U.S. generally accepted accounting principles (“GAAP”) basis, and also provides results excluding certain items. Please refer to the attached table for details of the reconciliation between GAAP operating results and Non-GAAP operating results. All results presented herein are for Veeco’s “Continuing Operations” which excludes the Metrology business sold to Bruker Corporation on October 7, 2010 and reflect the discontinuation of Veeco’s CIGS Solar Systems business.

 

GAAP Results ($M except EPS)

 

 

 

Q3 ‘11

 

Q3 ‘10

 

Revenues

 

$

268.0

 

$

277.1

 

Net income

 

$

52.6

 

$

93.7

 

EPS (diluted)

 

$

1.31

 

$

2.22

 

 

Non-GAAP Results ($M except EPS)

 

 

 

Q3 ‘11

 

Q3 ‘10

 

Net income

 

$

53.3

 

65.4

 

EPS (diluted)

 

$

1.33

 

$

1.55

 

 

Third Quarter Results in Line with Guidance

 

John R. Peeler, Veeco’s Chief Executive Officer, commented, “Veeco reported a solid third quarter, with revenues of $268 million, non-GAAP net income and earnings per share of $53 million and $1.33, respectively, all at the mid to high end of our guidance.  LED & Solar revenues increased 7% sequentially to $234 million, including $220 million in MOCVD, while Data Storage revenues were $34 million, down 25% sequentially.  Veeco has continued to execute within the challenging overall business environment, particularly in China, where customer facility readiness and credit tightening remain significant issues. Veeco’s new MaxBright™ MOCVD System represented nearly half of the quarter’s MOCVD revenue, including broad-scale customer acceptance at tier one LED manufacturers.”

 

“Veeco’s third quarter orders were impacted by weak near-term LED industry demand, low MOCVD equipment utilization rates in Asia, and decreased business activity in China,” commented Mr. Peeler.  “In addition, negative global macro-economic data points caused customers to slow or cut their capacity expansion plans.”  Veeco’s third quarter bookings were $133 million, a decline of 57% sequentially. LED & Solar orders declined 59% sequentially to $112 million, with MOCVD orders at $103 million.  Data Storage orders were $21 million, down 44% sequentially.  The Company’s Q3 2011 book-to-bill ratio was .50 to 1.  Veeco recorded backlog adjustments of $34 million during the quarter. Veeco’s quarter-end backlog was $389 million.

 

During the third quarter, under its Board authorized share buy-back program initiated in August 2010, Veeco purchased $154 million in stock at an average price of $38.63 per share.

 

1



 

Fourth Quarter 2011 Guidance & Outlook

 

Veeco’s fourth quarter 2011 revenue is currently forecasted to be between $175 million and $215 million. Earnings per share are currently forecasted to be between $0.46 to $0.78 on a GAAP basis, and $0.54 to $0.86 on a non-GAAP basis.  For the full year, Veeco’s guidance is $963 million to $1.0 billion, with earnings per share forecasted to be between $4.49 - $4.79 on a GAAP basis and $4.81 to $5.11 on a non-GAAP basis. Please refer to the attached financial table for more details.

 

Mr. Peeler commented, “Despite the difficult overall environment, we are proud that the Company expects to deliver $1 billion in 2011 revenue at the high end of guidance.  This is a tremendous accomplishment and speaks to our technology leadership position, close connectivity to our global customers and ability to execute in a challenging environment.”

 

“Our current expectation is orders will remain depressed for a few quarters,” continued Mr. Peeler. “While there are many data points indicating that LED lighting is accelerating, weak backlighting demand continues to cause low factory utilization rates.  In Data Storage, planned industry consolidations combined with weak PC demand is causing our key customers to delay capex.  In addition, global macro-economic concerns will likely have a dampening effect on our business heading into 2012.  With our variable cost model, combined with plans to decrease spending levels to reflect the challenging business environment, we are confident we will remain profitable and expect to deliver double-digit EBITA performance next year.”

 

Mr. Peeler concluded, “While we do not know how long this slowdown will last, LED pricing declines will continue to stimulate demand for solid state lighting on a global basis. We expect wide-spread adoption of LED lighting led first by the commercial, municipal and industrial sectors, which make up 75% of the lighting market, followed by residential users as economic benefits of using LED-based products become more apparent.  Despite some level of cyclicality which is to be expected, there is an enormous multi-year growth opportunity for MOCVD, aligning with our overall expectation of 5,000+ reactors from 2011 to 2015.  With the industry’s most productive MOCVD platforms, Veeco’s market position is the best it has ever been.  We believe the Company can continue to gain share as LED lighting hits an inflection point in 2012 and 2013.”

 

Conference Call Information

 

A conference call reviewing these results has been scheduled for 5:00pm ET today at 1-877-718-5095 (toll free) or 1-719-325-4929 using passcode 4998835. The call will also be webcast live on the Veeco website at www.veeco.com. A replay of the call will be available starting at 8:00pm ET tonight through 8:00pm ET on November 7, 2011 at 888-203-1112 or 719-457-0820, using passcode 4998835, or on the Veeco website.  Please follow along with our slide presentation also posted on the website.

 

About Veeco

 

Veeco makes equipment to develop and manufacture LEDs, solar cells, hard disk drives and other devices. We support our customers through product development, manufacturing, sales and service sites in the U.S., Korea, Taiwan, China, Singapore, Japan, Europe and other locations.  Please visit us at 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, 2010 and in our subsequent 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-*

 

2


 


 

Veeco Instruments Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)

 

 

 

Three months ended

 

Nine months ended

 

 

 

September 30,

 

September 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

267,959

 

$

277,094

 

$

787,450

 

$

631,130

 

Cost of sales

 

143,025

 

139,711

 

396,204

 

336,828

 

Gross profit

 

124,934

 

137,383

 

391,246

 

294,302

 

 

 

 

 

 

 

 

 

 

 

Operating expenses (income):

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

23,569

 

23,303

 

73,966

 

59,326

 

Research and development

 

26,404

 

15,250

 

69,927

 

39,121

 

Amortization

 

1,277

 

928

 

3,519

 

2,785

 

Restructuring

 

 

 

 

(179

)

Other, net

 

(199

)

(267

)

(227

)

184

 

Total operating expenses

 

51,051

 

39,214

 

147,185

 

101,237

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

73,883

 

98,169

 

244,061

 

193,065

 

 

 

 

 

 

 

 

 

 

 

Interest (income) expense, net

 

(244

)

1,637

 

1,141

 

5,182

 

Loss on extinguishment of debt

 

 

 

3,349

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes

 

74,127

 

96,532

 

239,571

 

187,883

 

Income tax provision

 

21,510

 

2,845

 

72,657

 

14,130

 

Income from continuing operations

 

52,617

 

93,687

 

166,914

 

173,753

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

Loss from discontinued operations before income taxes

 

(23,839

)

(10,831

)

(91,574

)

(12,815

)

Income tax benefit

 

(7,085

)

(3,307

)

(32,371

)

(3,662

)

Loss from discontinued operations

 

(16,754

)

(7,524

)

(59,203

)

(9,153

)

 

 

 

 

 

 

 

 

 

 

Net income

 

$

35,863

 

$

86,163

 

$

107,711

 

$

164,600

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per common share:

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

1.34

 

$

2.35

 

$

4.16

 

$

4.40

 

Discontinued operations

 

(0.43

)

(0.19

)

(1.48

)

(0.23

)

Income

 

$

0.91

 

$

2.16

 

$

2.68

 

$

4.17

 

 

 

 

 

 

 

 

 

 

 

Diluted:

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

1.31

 

$

2.22

 

$

3.98

 

$

4.12

 

Discontinued operations

 

(0.41

)

(0.18

)

(1.41

)

(0.21

)

Income

 

$

0.90

 

$

2.04

 

$

2.57

 

$

3.91

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

39,335

 

39,946

 

40,132

 

39,508

 

Diluted

 

40,069

 

42,258

 

41,941

 

42,175

 

 

3



 

Veeco Instruments Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

 

 

 

September 30,

 

December 31,

 

 

 

2011

 

2010

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

213,236

 

$

245,132

 

Short-term investments

 

212,727

 

394,180

 

Restricted cash

 

22,901

 

76,115

 

Accounts receivable, net

 

115,168

 

150,528

 

Inventories, net

 

127,518

 

108,487

 

Prepaid expenses and other current assets

 

60,107

 

34,328

 

Assets held for sale

 

2,341

 

 

Deferred income taxes, current

 

6,975

 

13,803

 

Total current assets

 

760,973

 

1,022,573

 

 

 

 

 

 

 

Property, plant and equipment, net

 

76,232

 

42,320

 

Goodwill

 

56,271

 

52,003

 

Deferred income taxes

 

2,998

 

9,403

 

Other assets, net

 

37,749

 

21,735

 

Total assets

 

$

934,223

 

$

1,148,034

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

44,784

 

$

32,220

 

Accrued expenses and other current liabilities

 

135,003

 

183,010

 

Deferred profit

 

5,911

 

4,109

 

Income taxes payable

 

4,446

 

56,369

 

Liabilities of discontinued segment held for sale

 

5,359

 

5,359

 

Current portion of long-term debt

 

243

 

101,367

 

Total current liabilities

 

195,746

 

382,434

 

 

 

 

 

 

 

Long-term debt

 

2,470

 

2,654

 

Other liabilities

 

755

 

434

 

Total liabilities

 

198,971

 

385,522

 

 

 

 

 

 

 

Equity

 

735,252

 

762,512

 

 

 

 

 

 

 

Total liabilities and equity

 

$

934,223

 

$

1,148,034

 

 

4



 

Veeco Instruments Inc. and Subsidiaries

Reconciliation of GAAP to non-GAAP results

(In thousands, except per share data)

(Unaudited)

 

 

 

Three months ended

 

Nine months ended

 

 

 

September 30,

 

September 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

Adjusted EBITA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

73,883

 

$

98,169

 

$

244,061

 

$

193,065

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization

 

1,277

 

928

 

3,519

 

2,785

 

Equity-based compensation

 

2,951

 

2,356

 

9,472

 

6,222

 

Restructuring

 

 

 

 

(179

)(1)

 

 

 

 

 

 

 

 

 

 

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

 

$

78,111

 

$

101,453

 

$

257,052

 

$

201,893

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income from continuing operations (GAAP basis)

 

$

52,617

 

$

93,687

 

$

166,914

 

$

173,753

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization

 

1,277

 

928

 

3,519

 

2,785

 

Equity-based compensation

 

2,951

 

2,356

 

9,472

 

6,222

 

Restructuring

 

 

 

 

(179

)(1)

Loss on extinguishment of debt

 

 

 

3,349

 

 

Non-cash portion of interest expense

 

 

769

(2)

1,260

(2)

2,271

(2)

Income tax effect of non-GAAP adjustments

 

(3,498

)(3)

(32,360

)(3)

(6,441

)(3)

(55,514

)(3)

 

 

 

 

 

 

 

 

 

 

Non-GAAP Net Income

 

$

53,347

 

$

65,380

 

$

178,073

 

$

129,338

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP earnings per diluted share excluding certain items (“Non-GAAP EPS”)

 

$

1.33

 

$

1.55

 

$

4.25

 

$

3.07

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average shares outstanding

 

40,069

 

42,258

 

41,941

 

42,175

 

 


(1) During the first quarter of 2010, we recorded a restructuring credit of $0.2 million associated with a change in estimate.

 

(2) Adjustment to exclude non-cash interest expense on convertible subordinated notes.

 

(3) By the end of 2010, the Company had fully utilized all prior NOL and tax credit carryfowards. As a result, beginning in 2011, the Company utilized the with and without method, at a 30.76% effective rate forecasted for the full year, to determine the income tax effect of non-GAAP adjustments. During the second quarter of 2010 we provided for income taxes at a 35% statutory rate to determine the income tax effect of non-GAAP adjustments.

 

NOTE - 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 adjusted 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 adjusted EBITA reports baseline performance and thus provides useful information.

 

5


 


 

Veeco Instruments Inc. and Subsidiaries

Reconciliation of GAAP to non-GAAP results

(In thousands, except per share data)

(Unaudited)

 

 

 

Guidance for

 

 

 

the three months ending
December 31, 2011

 

 

 

LOW

 

HIGH

 

Adjusted EBITA

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

25,535

 

$

43,535

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Amortization

 

1,237

 

1,237

 

Equity-based compensation

 

3,410

 

3,410

 

 

 

 

 

 

 

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

 

$

30,182

 

$

48,182

 

 

 

 

 

 

 

Non-GAAP Net Income

 

 

 

 

 

 

 

 

 

 

 

Net income from continuing operations (GAAP basis)

 

$

17,988

 

$

30,526

 

 

 

 

 

 

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

Amortization

 

1,237

 

1,237

 

Equity-based compensation

 

3,410

 

3,410

 

Income tax effect of non-GAAP adjustments

 

(1,538

)(1)

(1,613

)(1)

 

 

 

 

 

 

Non-GAAP Net Income

 

$

21,097

 

$

33,560

 

 

 

 

 

 

 

Non-GAAP earnings per diluted share excluding certain items (“Non-GAAP EPS”)

 

$

0.54

 

$

0.86

 

 

 

 

 

 

 

Diluted weighted average shares outstanding

 

39,000

 

39,000

 

 


(1) By the end of 2010, the Company had fully utilized all prior NOL and tax credit carryfowards. As a result, beginning in 2011, the Company utilized the with and without method, at a 30.76% effective rate forecasted for the full year, to determine the income tax effect of non-GAAP adjustments.

 

NOTE - 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 adjusted 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 adjusted EBITA reports baseline performance and thus provides useful information.

 

6



 

Veeco Instruments Inc. and Subsidiaries

Reconciliation of GAAP to non-GAAP results

(In thousands, except per share data)

(Unaudited)

 

 

 

Guidance for

 

 

 

the year ending
December 31, 2011

 

 

 

LOW

 

HIGH

 

Adjusted EBITA

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

264,986

 

$

282,986

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Amortization

 

4,756

 

4,756

 

Loss on extinguishment of debt

 

3,349

 

3,349

 

Non-cash portion of interest expense

 

1,260

 

1,260

 

Equity-based compensation

 

12,881

 

12,881

 

 

 

 

 

 

 

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

 

$

287,232

 

$

305,232

 

 

 

 

 

 

 

Non-GAAP Net Income

 

 

 

 

 

 

 

 

 

 

 

Net income from continuing operations (GAAP basis)

 

$

185,774

 

$

198,374

 

 

 

 

 

 

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

Amortization

 

4,756

 

4,756

 

Equity-based compensation

 

12,881

 

12,881

 

Loss on extinguishment of debt

 

3,349

 

3,349

 

Non-cash portion of interest expense

 

1,260

 

1,260

 

Income tax effect of non-GAAP adjustments

 

(8,860

)(1)

(8,996

)(1)

 

 

 

 

 

 

Non-GAAP Net Income

 

$

199,160

 

$

211,624

 

 

 

 

 

 

 

Non-GAAP earnings per diluted share excluding certain items (“Non-GAAP EPS”)

 

$

4.81

 

$

5.11

 

 

 

 

 

 

 

Diluted weighted average shares outstanding

 

41,400

 

41,400

 

 


(1) By the end of 2010, the Company had fully utilized all prior NOL and tax credit carryfowards. As a result, beginning in 2011, the Company utilized the with and without method, at a 30.76% effective rate forecasted for the full year, to determine the income tax effect of non-GAAP adjustments.

 

NOTE - 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 adjusted 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 adjusted EBITA reports baseline performance and thus provides useful information.

 

7



 

Veeco Instruments Inc. and Subsidiaries

Segment Bookings, Revenues, and Reconciliation

of Operating Income (Loss) to Adjusted EBITA (Loss)

(In thousands)

(Unaudited)

 

 

 

Three months ended

 

Nine months ended

 

 

 

September 30,

 

September 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

LED & Solar

 

 

 

 

 

 

 

 

 

Bookings

 

$

111,898

 

$

243,207

 

$

583,424

 

$

715,232

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

233,865

 

$

242,613

 

$

667,697

 

$

537,662

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

70,899

 

$

97,093

 

$

227,917

 

$

190,270

 

Amortization

 

924

 

487

 

2,364

 

1,461

 

Equity-based compensation

 

992

 

324

 

2,567

 

939

 

Adjusted EBITA

 

$

72,815

 

$

97,904

 

$

232,848

 

$

192,670

 

 

 

 

 

 

 

 

 

 

 

Data Storage

 

 

 

 

 

 

 

 

 

Bookings

 

$

21,188

 

$

34,972

 

$

91,350

 

$

111,369

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

34,094

 

$

34,481

 

$

119,753

 

$

93,468

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

7,185

 

$

8,570

 

$

31,087

 

$

19,631

 

Amortization

 

353

 

383

 

1,072

 

1,149

 

Equity-based compensation

 

339

 

258

 

999

 

781

 

Restructuring

 

 

 

 

(179

)

Adjusted EBITA

 

$

7,877

 

$

9,211

 

$

33,158

 

$

21,382

 

 

 

 

 

 

 

 

 

 

 

Unallocated Corporate

 

 

 

 

 

 

 

 

 

Operating loss

 

$

(4,201

)

$

(7,494

)

$

(14,943

)

$

(16,836

)

Amortization

 

 

58

 

83

 

175

 

Equity-based compensation

 

1,620

 

1,774

 

5,906

 

4,502

 

Adjusted loss

 

$

(2,581

)

$

(5,662

)

$

(8,954

)

$

(12,159

)

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

Bookings

 

$

133,086

 

$

278,179

 

$

674,774

 

$

826,601

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

267,959

 

$

277,094

 

$

787,450

 

$

631,130

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

73,883

 

$

98,169

 

$

244,061

 

$

193,065

 

Amortization

 

1,277

 

928

 

3,519

 

2,785

 

Equity-based compensation

 

2,951

 

2,356

 

9,472

 

6,222

 

Restructuring

 

 

 

 

(179

)

Adjusted EBITA

 

$

78,111

 

$

101,453

 

$

257,052

 

$

201,893

 

 

8