Assets

6 Months Ended

Jun. 30, 2022

Assets

Assets

Note 3 — Assets

Investments

Short-term investments are generally classified as available-for-sale and reported at fair value, with unrealized gains and losses, net of tax, presented as a separate component of stockholders’ equity under the caption “Accumulated other comprehensive income” in the Consolidated Balance Sheets. These securities may include U.S. treasuries, government agency securities, corporate debt, and commercial paper, all with maturities of greater than three months when

purchased. All realized gains and losses and unrealized losses resulting from declines in fair value that are other than temporary are included in “Other operating expense (income), net” in the Consolidated Statements of Operations.

Fair value is the price that would be received for an asset or the amount paid to transfer a liability in an orderly transaction between market participants. Veeco classifies certain assets based on the following fair value hierarchy:

Level 1: Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly; and

Level 3: Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Veeco has evaluated the estimated fair value of financial instruments using available market information and valuations as provided by third-party sources. The use of different market assumptions or estimation methodologies could have a significant effect on the estimated fair value amounts.

The following table presents the portion of Veeco’s assets that were measured at fair value on a recurring basis at June 30, 2022 and December 31, 2021:

	Level 1		Level 2		Level 3		Total
	(in thousands)
June 30, 2022
Cash equivalents
Certificate of deposits and time deposits	$	46,720	$	—	$	—	$	46,720
Money market cash		319		—		—		319
Total	$	47,039	$	—	$	—	$	47,039
Short-term investments
U.S. treasuries	$	57,008	$	—	$	—	$	57,008
Government agency securities		—		15,183		—		15,183
Corporate debt		—		39,082		—		39,082
Commercial paper		—		1,886		—		1,886
Total	$	57,008	$	56,151	$	—	$	113,159
December 31, 2021
Cash equivalents
Certificate of deposits and time deposits	$	41,544	$	—	$	—	$	41,544
Money market cash		121		—		—		121
Total	$	41,665	$	—	$	—	$	41,665
Short-term investments
U.S. treasuries	$	51,095	$	—	$	—	$	51,095
Government agency securities		—		12,052		—		12,052
Corporate debt		—		40,035		—		40,035
Commercial paper		—		999		—		999
Total	$	51,095	$	53,086	$	—	$	104,181

There were no transfers between fair value measurement levels during the three months and six months ended June 30, 2022.

At June 30, 2022 and December 31, 2021, the amortized cost and fair value of available-for-sale securities consist of:

			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
	(in thousands)
June 30, 2022
U.S. treasuries	$	57,697	$	—	$	(689)	$	57,008
Government agency securities		15,291		—		(108)		15,183
Corporate debt		39,659		—		(577)		39,082
Commercial paper		1,886		—		—		1,886
Total	$	114,533	$	—	$	(1,374)	$	113,159
December 31, 2021
U.S. treasuries	$	51,269	$	—	$	(174)	$	51,095
Government agency securities		12,075		—		(23)		12,052
Corporate debt		40,169		—		(134)		40,035
Commercial paper		999		—		—		999
Total	$	104,512	$	—	$	(331)	$	104,181

Available-for-sale securities in a loss position at June 30, 2022 and December 31, 2021 consist of:

	June 30, 2022								December 31, 2021
	Continuous Loss Position				Continuous Loss Position				Continuous Loss Position
	for Less than 12 Months				for 12 Months or More				for Less than 12 Months
			Gross				Gross				Gross
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
		(in thousands)
U.S. treasuries	$	57,008	$	(689)	$	—	$	—	$	51,095	$	(174)
Government agency securities		12,585		(100)		2,598		(8)		12,052		(23)
Corporate debt		36,313		(508)		2,769		(69)		40,035		(134)
Total	$	105,906	$	(1,297)	$	5,367	$	(77)	$	103,182	$	(331)

At December 31, 2021, there were no short-term investments that had been in a continuous loss position for more than 12 months.

The contractual maturities of securities classified as available-for-sale at June 30, 2022 were as follows:

	June 30, 2022
	Amortized		Estimated
	Cost		Fair Value
		(in thousands)
Due in one year or less	$	102,309	$	101,262
Due after one year through two years		12,224		11,897
Total	$	114,533	$	113,159

Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. There were no realized gains or losses for the six months ended June 30, 2022 and 2021.

Accounts Receivable

Accounts receivable is presented net of an allowance for doubtful accounts of $0.7 million at June 30, 2022 and December 31, 2021. The Company considered its current expectations of future economic conditions, including the impact of COVID-19, when estimating its allowance for doubtful accounts.

Inventories

Inventories at June 30, 2022 and December 31, 2021 consist of the following:

	June 30,		December 31,
	2022		2021
	(in thousands)
Materials	$	105,262	$	96,027
Work-in-process		63,370		54,128
Finished goods		7,859		20,703
Total	$	176,491	$	170,858

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets primarily consist of supplier deposits, prepaid value-added tax, lease deposits, prepaid insurance, prepaid licenses, and other receivables. In addition, Veeco had deposits with its suppliers of $7.4 million and $3.9 million at June 30, 2022 and December 31, 2021, respectively.

Property, Plant, and Equipment

Property, plant, and equipment at June 30, 2022 and December 31, 2021 consist of the following:

	June 30,		December 31,
	2022		2021
	(in thousands)
Land	$	5,061	$	5,061
Building and improvements		63,973		63,946
Machinery and equipment (1)		153,794		145,656
Leasehold improvements		50,404		45,979
Gross property, plant, and equipment		273,232		260,642
Less: accumulated depreciation and amortization		168,201		160,899
Net property, plant, and equipment	$	105,031	$	99,743

(1) Machinery and equipment also includes software, furniture and fixtures

For the three and six months ended June 30, 2022, depreciation expense was $4.0 million and $7.7 million, respectively, and $3.5 million and $6.9 million, respectively, for the comparable 2021 periods.

Goodwill

Goodwill represents the future economic benefits arising from assets acquired in a business combination that are not individually identified and separately recognized. The Company continues to assess potential triggering events related to

the value of its goodwill and concluded that there were no indicators of impairment during the six months ended June 30, 2022.

Intangible Assets

Intangible assets consist of purchased technology, customer relationships, patents, trademarks and tradenames, and backlog, and are initially recorded at fair value. Long-lived intangible assets are amortized over their estimated useful lives in a method reflecting the pattern in which the economic benefits are consumed or amortized on a straight-line basis if such pattern cannot be reliably determined. The Company continues to assess potential triggering events related to the value of its intangible assets and concluded that there were no indicators of impairment during the three and six months ended June 30, 2022.

The components of purchased intangible assets were as follows:

	June 30, 2022						December 31, 2021
			Accumulated						Accumulated
	Gross		Amortization				Gross		Amortization
	Carrying		and		Net		Carrying		and		Net
	Amount		Impairment		Amount		Amount		Impairment		Amount
	(in thousands)
Technology	$	327,908	$	313,735	$	14,173	$	327,908	$	310,551	$	17,357
Customer relationships		146,465		134,192		12,273		146,465		132,970		13,495
Trademarks and tradenames		30,910		28,460		2,450		30,910		27,857		3,053
Other		3,686		3,686		—		3,686		3,686		—
Total	$	508,969	$	480,073	$	28,896	$	508,969	$	475,064	$	33,905

Other intangible assets primarily consist of patents, licenses, and backlog.