EX-99.1 2 a14-18040_1ex99d1.htm EX-99.1

EXHIBIT 99.1

 

   NEWS

 

FOR IMMEDIATE RELEASE

 

VEECO REPORTS SECOND QUARTER 2014 FINANCIAL RESULTS

 

Plainview, NY, July 30, 2014 — Veeco Instruments Inc. (Nasdaq: VECO) announced its financial results for the second quarter ended June 30, 2014.  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.

 

GAAP Results ($M except per share data)

 

 

 

Q2 ‘14

 

Q2 ‘13

 

Revenues

 

$

95.1

 

$

97.4

 

Net loss

 

$

(15.2

)

$

(4.1

)

Per share loss

 

$

(0.39

)

$

(0.11

)

 

Non-GAAP Results ($M except per share data)

 

 

 

Q2 ‘14

 

Q2 ‘13

 

Adjusted EBITA

 

$

(7.0

)

$

(2.2

)

Net loss

 

$

(6.1

)

$

(1.3

)

Per share loss

 

$

(0.16

)

$

(0.03

)

 

“Veeco achieved $95 million in revenues, up 5% from the first quarter of 2014, and an adjusted EBITA loss of $7 million,” commented John R. Peeler, Chairman and Chief Executive Officer. “The Company ended the quarter with a cash balance of $485 million, up $2 million from the prior quarter.”

 

“Our second quarter 2014 orders were $104 million, up when compared with the first quarter of 2014,” continued Peeler. “We continue to see positive trends in the LED market, including strong LED chip demand, very high LED fab utilization rates and solid customer quoting activity. First half 2014 MOCVD orders were up nearly 80% from the first half of last year. We had several significant wins during the quarter from LED customers in China and Korea who selected Veeco MOCVD equipment for their capacity expansions.  Orders for MOCVD, Data Storage and MBE in the second quarter of 2014 were $75 million, $23 million and $6 million, respectively.”

 

Third Quarter 2014 Guidance

 

Veeco’s third quarter 2014 revenue is currently forecasted to be between $92 million and $100 million. Earnings per share is currently forecasted to be between ($0.43) to ($0.34) on a GAAP basis, and ($0.15) to ($0.07) on a non-GAAP basis. Please refer to the attached financial table for more details. GAAP guidance includes the impact of a planned $2.6 million restructuring charge related to the Company’s business and facility streamlining activities this quarter.  Note that, starting in the current quarter, Veeco will report adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA), rather than adjusted earnings before interest, taxes and amortization (adjusted EBITA), as its primary non-GAAP earnings measurement.

 

Business Update and Outlook

 

“MOCVD business conditions have improved from last year, but we have seen no sustained improvement in our other businesses. We have been working to streamline our business operations and reduce our expense structure, enabling investments in high growth opportunities such as LED and OLED display,” commented Peeler. “These activities are planned through the rest of 2014, and are expected to result in an approximately 10% reduction in operating expenses as we exit 2014.”

 


 

“LED market trends remain favorable, as indicated by our MOCVD first half order and revenue patterns. While quarterly MOCVD order patterns are lumpy, we see solid growth ahead.  We currently expect orders in the second half of fiscal 2014 to be better than the first half, driven primarily by growth in MOCVD.  We remain focused on delivering improved results by: 1) developing and launching game-changing new products that enable cost effective LED lighting, flexible OLED display encapsulation and other emerging technologies; 2) improving customer cost of ownership as well as our gross margins; 3) driving process improvement initiatives to make us more efficient; and 4) lowering expenses. It is our goal to get the Company back to double-digit adjusted EBITDA profitability by 2015 through a combination of improved business conditions, execution on our growth initiatives, a more streamlined Veeco, and lower operating expenses.”

 

Conference Call Information

 

A conference call reviewing these results has been scheduled for 5:00pm today. To join the call, dial 1-888-271-8601 (toll free) or 913-312-6688 and use passcode 1763016. 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 tonight through 8:00pm ET on Wednesday, August 13, 2014 at 1-888-203-1112 (toll free) or 1-719-457-0820, using passcode 1763016, and on the Veeco website. We will post an accompanying slide presentation to our website prior to the beginning of the call.

 

About Veeco

 

Veeco’s process equipment solutions enable the manufacture of LEDs, flexible OLED displays, solar cells, power electronics, hard drives, MEMS and wireless chips.  We are the market leader in MOCVD, MBE, Ion Beam and other advanced thin film process technologies. Our high performance systems drive innovation in energy efficiency, consumer electronics and network storage and allow our customers to maximize productivity and achieve lower cost of ownership.  For information on our company, products and worldwide service and support, please visit 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, 2013 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-

 

Veeco Contacts:

 

 

 

Investor Relations:

Media:

Debra Wasser 516-677-0200 x1472

Jeffrey Pina 516-677-0200 x1222

dwasser@veeco.com

jpina@veeco.com

 


 

Veeco Instruments Inc. and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

 

 

For the three months ended

 

For the six months ended

 

 

 

June 30,

 

June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

95,122

 

$

97,435

 

$

185,963

 

$

159,216

 

Cost of sales

 

64,449

 

62,795

 

121,513

 

102,024

 

Gross profit

 

30,673

 

34,640

 

64,450

 

57,192

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

21,891

 

19,779

 

43,558

 

39,427

 

Research and development

 

21,011

 

20,870

 

40,779

 

41,607

 

Amortization

 

2,899

 

855

 

5,802

 

1,711

 

Restructuring

 

801

 

—

 

1,193

 

531

 

Total operating expenses

 

46,602

 

41,504

 

91,332

 

83,276

 

Other operating, net

 

(158

)

(52

)

(370

)

352

 

Changes in contingent consideration

 

—

 

—

 

(29,368

)

—

 

Operating income (loss)

 

(15,771

)

(6,812

)

2,856

 

(26,436

)

Interest income (expense), net

 

72

 

236

 

236

 

428

 

Income (loss) before income taxes

 

(15,699

)

(6,576

)

3,092

 

(26,008

)

Income tax provision (benefit)

 

(488

)

(2,495

)

(857

)

(11,856

)

Net income (loss)

 

$

(15,211

)

$

(4,081

)

$

3,949

 

$

(14,152

)

 

 

 

 

 

 

 

 

 

 

Income (loss) per common share:

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

Income (loss)

 

$

(0.39

)

$

(0.11

)

$

0.10

 

$

(0.37

)

 

 

 

 

 

 

 

 

 

 

Diluted:

 

 

 

 

 

 

 

 

 

Income (loss)

 

$

(0.39

)

$

(0.11

)

$

0.10

 

$

(0.37

)

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

39,379

 

38,764

 

39,275

 

38,740

 

Diluted

 

39,379

 

38,764

 

40,061

 

38,740

 

 


 

Veeco Instruments Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

 

 

 

June 30,

 

December 31,

 

 

 

2014

 

2013

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

232,332

 

$

210,799

 

Short-term investments

 

252,165

 

281,538

 

Restricted cash

 

518

 

2,738

 

Accounts receivable, net

 

58,323

 

23,823

 

Inventories

 

48,364

 

59,726

 

Prepaid expenses and other current assets

 

32,488

 

23,303

 

Deferred income taxes

 

9,403

 

11,716

 

Total current assets

 

633,593

 

613,643

 

 

 

 

 

 

 

Property, plant and equipment at cost, net

 

83,141

 

89,139

 

Goodwill

 

91,521

 

91,348

 

Deferred income taxes

 

397

 

397

 

Intangible assets, net

 

108,914

 

114,716

 

Other assets

 

39,506

 

38,726

 

Total assets

 

$

957,072

 

$

947,969

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

27,777

 

$

35,755

 

Accrued expenses and other current liabilities

 

35,360

 

51,084

 

Customer deposits and deferred revenue

 

57,580

 

34,754

 

Income taxes payable

 

6,796

 

6,149

 

Deferred income taxes

 

159

 

159

 

Current portion of long-term debt

 

302

 

290

 

Total current liabilities

 

127,974

 

128,191

 

 

 

 

 

 

 

Deferred income taxes

 

23,057

 

28,052

 

Long-term debt

 

1,694

 

1,847

 

Other liabilities

 

2,912

 

9,649

 

Total liabilities

 

155,637

 

167,739

 

 

 

 

 

 

 

Equity

 

801,435

 

780,230

 

 

 

 

 

 

 

Total liabilities and equity

 

$

957,072

 

$

947,969

 

 


 

Veeco Instruments Inc. and Subsidiaries

Reconciliation of GAAP to non-GAAP results

(In thousands, except per share data)

(Unaudited)

 

 

 

For the three months ended

 

For the six months ended

 

 

 

June 30,

 

June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

Adjusted EBITA **

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

(15,771

)

$

(6,812

)

$

2,856

 

$

(26,436

)

 

 

 

 

 

 

 

 

 

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization

 

2,899

 

855

 

5,802

 

1,711

 

Equity-based compensation

 

5,091

 

3,713

 

9,813

 

6,292

 

Restructuring

 

801

 

—

 

1,193

 

531

 

Changes in contingent consideration

 

—

 

—

 

(29,368

)

—

 

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

 

$

(6,980

)

$

(2,244

)

$

(9,704

)

$

(17,902

)

 

 

 

 

 

 

 

 

 

 

Non-GAAP Net Income (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) (GAAP basis)

 

$

(15,211

)

$

(4,081

)

$

3,949

 

$

(14,152

)

 

 

 

 

 

 

 

 

 

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization

 

2,899

 

855

 

5,802

 

1,711

 

Equity-based compensation

 

5,091

 

3,713

 

9,813

 

6,292

 

Restructuring

 

801

 

—

 

1,193

 

531

 

Changes in contingent consideration

 

—

 

—

 

(29,368

)

—

 

Income tax effect of non-GAAP adjustments

 

312

 

(1,741

)

119

 

(3,113

)(1)

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income (loss)

 

$

(6,108

)

$

(1,254

)

$

(8,492

)

$

(8,731

)

 

 

 

 

 

 

 

 

 

 

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

 

$

(0.16

)

$

(0.03

)

$

(0.22

)

$

(0.23

)

 

 

 

 

 

 

 

 

 

 

Diluted weighted average shares outstanding

 

39,379

 

38,764

 

39,275

 

38,740

 

 

** Starting in the third quarter 2014 the Company will be using adjusted EBITDA to evaluate the performance of our business units, and therefore will be reporting non-GAAP measures as adjusted EBITDA.

(1) The Company utilized the with and without method 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 (“GAAP”), 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.

 


 

Veeco Instruments Inc. and Subsidiaries

Segment Bookings, Revenues, and Reconciliation

of Operating Income (Loss) to Adjusted EBITA

(In thousands)

(Unaudited)

 

 

 

For the three months ended

 

For the six months ended

 

 

 

June 30,

 

June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

LED & Solar

 

 

 

 

 

 

 

 

 

Bookings

 

$

80,661

 

$

58,089

 

$

167,799

 

$

100,803

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

77,154

 

$

75,933

 

$

147,909

 

$

118,240

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

(6,604

)

$

1,276

 

$

19,972

 

$

(11,611

)

Amortization

 

2,576

 

532

 

5,155

 

1,064

 

Equity-based compensation

 

2,339

 

1,316

 

4,512

 

2,026

 

Restructuring

 

73

 

—

 

237

 

423

 

Changes in contingent consideration

 

—

 

—

 

(29,368

)

—

 

Adjusted EBITA

 

$

(1,616

)

$

3,124

 

$

508

 

$

(8,098

)

 

 

 

 

 

 

 

 

 

 

Data Storage

 

 

 

 

 

 

 

 

 

Bookings

 

$

23,381

 

$

26,682

 

$

38,818

 

$

54,374

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

17,968

 

$

21,502

 

$

38,054

 

$

40,976

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

(2,077

)

$

(932

)

$

(3,976

)

$

(1,061

)

Amortization

 

323

 

323

 

647

 

647

 

Equity-based compensation

 

683

 

488

 

1,382

 

618

 

Restructuring

 

728

 

—

 

956

 

50

 

Adjusted EBITA

 

$

(343

)

$

(121

)

$

(991

)

$

254

 

 

 

 

 

 

 

 

 

 

 

Unallocated Corporate

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

(7,090

)

$

(7,156

)

$

(13,140

)

$

(13,764

)

Equity-based compensation

 

2,069

 

1,909

 

3,919

 

3,648

 

Restructuring

 

—

 

—

 

—

 

58

 

Adjusted EBITA

 

$

(5,021

)

$

(5,247

)

$

(9,221

)

$

(10,058

)

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

Bookings

 

$

104,042

 

$

84,771

 

$

206,617

 

$

155,177

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

95,122

 

$

97,435

 

$

185,963

 

$

159,216

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

(15,771

)

$

(6,812

)

$

2,856

 

$

(26,436

)

Amortization

 

2,899

 

855

 

5,802

 

1,711

 

Equity-based compensation

 

5,091

 

3,713

 

9,813

 

6,292

 

Restructuring

 

801

 

—

 

1,193

 

531

 

Changes in contingent consideration

 

—

 

—

 

(29,368

)

—

 

Adjusted EBITA

 

$

(6,980

)

$

(2,244

)

$

(9,704

)

$

(17,902

)

 


 

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
September 30, 2014

 

 

 

LOW

 

HIGH

 

Adjusted EBITDA **

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

(17,596

)

$

(14,046

)

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Amortization

 

2,929

 

2,929

 

Equity-based compensation

 

5,118

 

5,118

 

Restructuring

 

2,634

 

2,634

 

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

 

(6,915

)

(3,365

)

Depreciation

 

3,187

 

3,187

 

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

 

$

(3,728

)

$

(178

)

 

 

 

 

 

 

Non-GAAP Net Income

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) (GAAP basis)

 

$

(16,870

)

$

(13,445

)

 

 

 

 

 

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

Amortization

 

2,929

 

2,929

 

Equity-based compensation

 

5,118

 

5,118

 

Restructuring

 

2,634

 

2,634

 

Income tax effect of non-GAAP adjustments

 

110

 

(143

)(1)

 

 

 

 

 

 

Non-GAAP net income (loss)

 

$

(6,079

)

$

(2,907

)

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

 

$

(0.15

)

$

(0.07

)

 

 

 

 

 

 

Diluted weighted average shares outstanding

 

39,462

 

39,462

 

 

** Starting in the third quarter 2014 the Company will be using adjusted EBITDA to evaluate the performance of our business units, and therefore will be reporting non-GAAP measures as adjusted EBITDA.

(1) The Company utilizes the with and without method 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 (“GAAP”), and may be different from similar measures presented by other companies. Management of the Company evaluates performance of its business units based on adjusted EBITDA, 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 EBITDA reports baseline performance and thus provides useful information.