EX-99.1 2 a15-10884_1ex99d1.htm EX-99.1

EXHIBIT 99.1

|  | NEWS

FOR IMMEDIATE RELEASE

VEECO REPORTS FIRST QUARTER 2015 FINANCIAL RESULTS

Plainview, N.Y., May 6, 2015 — Veeco Instruments Inc. (Nasdaq: VECO) announced its financial results for the first quarter ended March 31, 2015. Results are reported in conformity with U.S. generally accepted accounting principles (“GAAP”) and are also reported adjusting for certain items (“Non-GAAP”). A reconciliation between GAAP and Non-GAAP operating results is provided at the end of this press release.

U.S. Dollars in millions, except per share data

GAAP Results |  | Q1 ‘15 |  | Q1 ‘14 |
Revenue |  | $ | 98.3 |  | $ | 90.8 |
Net income (loss) |  | (19.1 | ) | 19.2 |
Diluted earnings (loss) per share |  | (0.48 | ) | 0.48 |

Non-GAAP Results |  | Q1 ‘15 |  | Q1 ‘14 |
Adjusted EBITDA |  | $ | 2.7 |  | $ | 0.1 |
Adjusted net loss |  | (0.5 | ) | (2.4 | )
Adjusted earnings (loss) per share |  | (0.01 | ) | (0.06 | )

“Veeco executed well in the first quarter, and adjusted EBITDA came in slightly higher than our guidance range due to improved gross margins and lower operating expenses,” commented John R. Peeler, Chairman and Chief Executive Officer. “Following very strong fourth quarter results, Veeco’s first quarter 2015 bookings were $102 million, as guided. Our new Veeco Precision Surface Processing or “PSP” business is off to a great start, and will help drive increased sales and profitability in 2015.”

Veeco’s new TurboDisc® EPIK™ 700 MOCVD system is performing very well in the market, and production orders have been received from all beta customers as well as additional customers in multiple countries. According to Peeler, “Customers have validated that EPIK 700 is the best product in the industry to drive down total cost of ownership, improve productivity, and enable them to produce the highest quality LEDs at the lowest cost. As a result, we are seeing excellent customer pull for the product.” The Company shipped a number of EPIK 700 systems in the first quarter which were not recognized as revenue in Q1 2015, resulting in an increase of $25 million in deferred revenue.

Guidance and Outlook

Veeco’s second quarter 2015 revenue is currently forecasted to be between $100 and $150 million. Second quarter earnings (loss) per share is currently forecasted to be between ($0.49) to $0.04 on a GAAP basis and between ($0.06) and $0.33 on a non-GAAP basis. In addition, Veeco has raised its 2015 revenue guidance, and now expects to achieve over 35% growth, from a prior target of over 30%.

Conference Call Information

A conference call reviewing these results has been scheduled for today at 5:00pm ET. To join the call, dial 1-888-254-2831 (toll free) or 1-913-312-0419 and use passcode 3806869. 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 May 20, 2015 at 888-203-1112 or 719-457-0820, using passcode 3806869, 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, power electronics, compound semiconductors, hard drives, semiconductors, MEMS and wireless chips. We are the market leader in MOCVD, MBE, Ion Beam, Wet Etch single wafer processing 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, 2014 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: |
Investors: | Media:
Shanye Hudson 516-677-0200 x1472 | Jeffrey Pina 516-677-0200 x1222
shudson@veeco.com | jpina@veeco.com
Deb Wasser 212-704-4588 |
Deb.wasser@edelman.com |

Veeco Instruments Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

|  | Three months ended March 31, |
|  | 2015 |  | 2014 |
Net sales |  | $ | 98,341 |  | $ | 90,841 |
Cost of sales |  | 63,205 |  | 57,064 |
Gross profit |  | 35,136 |  | 33,777 |
Operating expenses, net: |  |  |  |  |
Selling, general, and administrative |  | 22,882 |  | 21,667 |
Research and development |  | 18,585 |  | 19,768 |
Amortization |  | 7,962 |  | 2,903 |
Restructuring |  | 2,357 |  | 392 |
Asset impairment |  | 126 |  | — |
Changes in contingent consideration |  | — |  | (29,368 | )
Other, net |  | (951 | ) | (212 | )
Total operating expenses, net |  | 50,961 |  | 15,150.0 |
Operating income (loss) |  | (15,825 | ) | 18,627 |
Interest income, net |  | 161 |  | 164 |
Income (loss) before income taxes |  | (15,664 | ) | 18,791 |
Income tax expense (benefit) |  | 3,446 |  | (369 | )
Net income (loss) |  | $ | (19,110 | ) | $ | 19,160 |
Income (loss) per common share: |  |  |  |  |
Basic |  | $ | (0.48 | ) | $ | 0.49 |
Diluted |  | $ | (0.48 | ) | $ | 0.48 |
Weighted average number of shares: |  |  |  |  |
Basic |  | 39,639 |  | 39,177 |
Diluted |  | 39,639 |  | 39,937 |

Veeco Instruments Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

|  | March 31, 2015 |  | December 31, 2014 |
|  | (unaudited) |  |  |
Assets |  |  |  |  |
Current assets: |  |  |  |  |
Cash and cash equivalents |  | $ | 303,123 |  | $ | 270,811 |
Short-term investments |  | 88,997 |  | 120,572 |
Restricted cash |  | 493 |  | 539 |
Accounts receivable, net |  | 64,285 |  | 60,085 |
Inventories |  | 57,197 |  | 61,471 |
Deferred cost of sales |  | 15,506 |  | 5,076 |
Prepaid expenses and other current assets |  | 32,102 |  | 23,132 |
Assets held for sale |  | 6,000 |  | 6,000 |
Deferred income taxes |  | 7,014 |  | 7,976 |
Total current assets |  | 574,717 |  | 555,662.0 |
Property, plant and equipment, net |  | 80,301 |  | 78,752 |
Goodwill |  | 114,972 |  | 114,959 |
Deferred income taxes |  | 1,180 |  | 1,180 |
Intangible assets, net |  | 151,346 |  | 159,308 |
Other assets |  | 19,574 |  | 19,594 |
Total assets |  | $ | 942,090 |  | $ | 929,455 |
Liabilities and stockholders’ equity |  |  |  |  |
Current liabilities: |  |  |  |  |
Accounts payable |  | $ | 41,128 |  | $ | 18,111 |
Accrued expenses and other current liabilities |  | 36,491 |  | 48,418 |
Customer deposits and deferred revenue |  | 109,993 |  | 96,004 |
Income taxes payable |  | 8,041 |  | 5,441 |
Deferred income taxes |  | 120 |  | 120 |
Current portion of long-term debt |  | 320 |  | 314 |
Total current liabilities |  | 196,093 |  | 168,408 |
Deferred income taxes |  | 16,041 |  | 16,397 |
Long-term debt |  | 1,451 |  | 1,533 |
Other liabilities |  | 4,680 |  | 4,185 |
Total liabilities |  | 218,265 |  | 190,523 |
Total stockholders’ equity |  | 723,825 |  | 738,932 |
Total liabilities and stockholders’ equity |  | $ | 942,090 |  | $ | 929,455 |

Veeco Instruments Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Data

(In thousands, except per share data)

(Unaudited)

|  |  |  | Non-GAAP Adjustments |  |  |
Three months ended March 31, 2015 |  | GAAP |  | Share-based Compensation |  | Acquisition Related |  | Other |  | Non-GAAP |
Net sales |  | $ | 98,341 |  | $ | — |  | $ | — |  | $ | — |  | $ | 98,341 |
Cost of sales |  | 63,205 |  | (601 | ) | (1,311 | )(a) | — |  | 61,293 |
Gross profit |  | 35,136 |  | 601 |  | 1,311 |  | — |  | 37,048 |
Gross margin |  | 35.7 | % |  |  |  |  |  |  | 37.7 | %
Operating expenses, net: |  |  |  |  |  |  |  |  |  |  |
Selling, general, and administrative |  | 22,882 |  | (2,798 | ) | — |  | — |  | 20,084 |
Research and development |  | 18,585 |  | (599 | ) | — |  | — |  | 17,985 |
Amortization |  | 7,962 |  | — |  | (7,962 | ) | — |  | — |
Restructuring |  | 2,357 |  | — |  | — |  | (2,357 | ) | — |
Asset impairment |  | 126 |  | — |  | — |  | (126 | ) | — |
Other, net |  | (951 | ) | — |  | — |  | — |  | (951 | )
Total operating expenses, net |  | 50,961 |  | (3,397 | ) | (7,962 | ) | (2,484 | ) | 37,118 |
Operating income (loss) |  | (15,825 | ) | 3,998 |  | 9,273 |  | 2,484 |  | (70 | )
Interest income, net |  | 161 |  | — |  | — |  | — |  | 161 |
Income (loss) before income taxes |  | (15,664 | ) | 3,998 |  | 9,273 |  | 2,484 |  | 90 |
Income tax expense (benefit) |  | 3,446 |  | — |  | — |  | (2,825 | )(b) | 621 |
Net income (loss) |  | $ | (19,110 | ) | $ | 3,998 |  | $ | 9,273 |  | $ | 5,309 |  | $ | (531 | )
Income (loss) per common share: |  |  |  |  |  |  |  |  |  |  |
Basic earnings per share |  | $ | (0.48 | ) |  |  |  |  |  |  | $ | (0.01 | )
Diluted earnings per share |  | $ | (0.48 | ) |  |  |  |  |  |  | $ | (0.01 | )
Weighted average number of shares: |  |  |  |  |  |  |  |  |  |  |
Basic shares |  | 39,639 |  |  |  |  |  |  |  | 39,639 |
Diluted shares |  | 39,639 |  |  |  |  |  |  |  | 39,639 |
Non-GAAP operating income |  |  |  |  |  |  |  |  |  | $ | (70 | )
Depreciation |  |  |  |  |  |  |  |  |  | 2,762 |
Adjusted EBITDA |  |  |  |  |  |  |  |  |  | $ | 2,692 |

Note: Amounts may not calculate precisely due to rounding.

(a) The inventory fair value step-up associated with the PSP acquisition’s purchase accounting.

(b) The ‘with or without method’ is utilized to determine the income tax effect of the non-GAAP adjustments.

This table includes financial measures adjusted for the impact of certain items; these financial measures are therefore not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These Non-GAAP financial measures consider exclusion of: share-based compensation expense; one-time charges relating to restructuring initiatives, non-cash asset impairments, certain other non-operating gains and losses, and acquisition-related items such as one-time transaction costs, non-cash amortization of acquired intangible assets, and the stepped-up cost of sales associated with the purchase accounting of acquired inventory.

These non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. By excluding these items, non-GAAP financial measures are intended to facilitate meaningful comparisons to historical operating results, competitors’ operating results, and estimates made by securities analysts. Management is evaluated on key performance metrics including adjusted EBITDA, which is used to determine management incentive compensation as well as forecast future periods. These non-GAAP financial measures may be useful to investors in allowing for greater transparency of supplemental information used by management in its financial and operational decision-making. In addition, similar non-GAAP financial measures have historically been reported to investors; the inclusion of comparable numbers provides consistency in financial reporting. Investors are encouraged to review the reconciliation of the non-GAAP financial measures used in this news release to their most directly comparable GAAP financial measures.

Veeco Instruments Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Data

(In thousands, except per share data)

(Unaudited)

|  |  |  | Non-GAAP Adjustments |  |  |
Three months ended March 31, 2014 |  | GAAP |  | Share-based Compensation |  | Acquisition Related |  | Other |  | Non-GAAP |
Net sales |  | $ | 90,841 |  | $ | — |  | $ | — |  | $ | — |  | $ | 90,841 |
Cost of sales |  | 57,064 |  | (560 | ) | — |  | — |  | 56,504 |
Gross profit |  | 33,777 |  | 560 |  | — |  | — |  | 34,337 |
Gross margin |  | 37.2 | % |  |  |  |  |  |  | 37.8 | %
Operating expenses: |  |  |  |  |  |  |  |  |  |  |
Selling, general, and administrative |  | 21,667 |  | (3,101 | ) | — |  | — |  | 18,566 |
Research and development |  | 19,768 |  | (1,061 | ) | — |  | — |  | 18,707 |
Amortization |  | 2,903 |  | — |  | (2,903 | ) | — |  | — |
Restructuring |  | 392 |  | — |  | — |  | (392 | ) | — |
Changes in contingent consideration |  | (29,368 | ) | — |  | 29,368 |  | — |  | — |
Other, net |  | (212 | ) | — |  | — |  | — |  | (212 | )
Total operating expenses, net |  | 15,150 |  | (4,162.3 | ) | 26,465 |  | (392 | ) | 37,061 |
Operating income (loss) |  | 18,627 |  | 4,722 |  | (26,465 | ) | 392 |  | (2,724 | )
Interest income (expense), net |  | 164 |  | — |  | — |  | — |  | 164 |
Income (loss) before income taxes |  | 18,791 |  | 4,722 |  | (26,465 | ) | 392 |  | (2,560 | )
Income tax expense (benefit) |  | (369 | ) | — |  | — |  | 192 |  | (177 | )*
Net income (loss) |  | $ | 19,160 |  | $ | 4,722 |  | $ | (26,465 | ) | $ | 200 |  | $ | (2,383 | )
Income (loss) per common share: |  |  |  |  |  |  |  |  |  |  |
Basic earnings per share |  | $ | 0.49 |  |  |  |  |  |  |  | $ | (0.06 | )
Diluted earnings per share |  | $ | 0.48 |  |  |  |  |  |  |  | $ | (0.06 | )
Weighted average number of shares: |  |  |  |  |  |  |  |  |  |  |
Basic shares |  | 39,177 |  |  |  |  |  |  |  | 39,177 |
Diluted shares |  | 39,937 |  |  |  |  |  |  |  | 39,177 |
Adjusted operating income |  |  |  |  |  |  |  |  |  | $ | (2,724 | )
Depreciation |  |  |  |  |  |  |  |  |  | 2,868 |
Adjusted EBITDA |  |  |  |  |  |  |  |  |  | $ | 144 |

Note: Amounts may not calculate precisely due to rounding.

* The ‘with or without method’ is utilized to determine the income tax effect of the non-GAAP adjustments.

This table includes financial measures adjusted for the impact of certain items; these financial measures are therefore not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These Non-GAAP financial measures consider exclusion of: share-based compensation expense; one-time charges relating to restructuring initiatives, non-cash asset impairments, certain other non-operating gains and losses, and acquisition-related items such as one-time transaction costs, non-cash amortization of acquired intangible assets, and the stepped-up cost of sales associated with the purchase accounting of acquired inventory.

These non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. By excluding these items, non-GAAP financial measures are intended to facilitate meaningful comparisons to historical operating results, competitors’ operating results, and estimates made by securities analysts. Management is evaluated on key performance metrics including adjusted EBITDA, which is used to determine management incentive compensation as well as forecast future periods. These non-GAAP financial measures may be useful to investors in allowing for greater transparency of supplemental information used by management in its financial and operational decision-making. In addition, similar non-GAAP financial measures have historically been reported to investors; the inclusion of comparable numbers provides consistency in financial reporting. Investors are encouraged to review the reconciliation of the non-GAAP financial measures used in this news release to their most directly comparable GAAP financial measures.

Veeco Instruments Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Data

(In millions, except per share data)

(Unaudited)

|  |  |  |  |  |  |  | Non-GAAP Adjustments |  |  |  |  |  |  |
|  | GAAP |  | Share-based Compensation |  | Acquisition Related |  | Other |  | Non-GAAP |
Guidance for the three months ended June 30, 2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net sales |  | $ | 100 |  | — |  | $ | 150 |  | $ | — |  | $ | — |  | $ |  |  |  |  | — |  | $ | 100 |  | — |  | $ | 150 |
Gross profit |  | 35.3 |  | — |  | 57.8 |  | 0.7 |  | — |  |  |  |  |  | — |  | 36.0 |  | — |  | 58.5 |
Gross margin |  | 35 | % | — |  | 38 | % |  |  |  |  |  |  |  |  |  |  | 36 | % | — |  | 39 | %
Operating income (loss) |  | (16.6 | ) | — |  | 2.9 |  | 5.3 |  | 8.1 | (a) |  |  |  |  | 0.2 | (b) | (3.0 | ) | — |  | 16.5 |
Depreciation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3.0 |  |  |  | 3.0 |
Adjusted EBITDA |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 0.0 |  | — |  | $ | 19.5 |
Net income (loss) |  | (19.5 | ) | — |  | 1.8 |  | 5.3 |  | 8.1 |  | 3.6 |  | — |  | (1.7 | )(c) | (2.5 | ) | — |  | 13.5 |
Income (loss) per diluted common share |  | $ | (0.49 | ) | — |  | $ | 0.04 |  |  |  |  |  |  |  |  |  |  |  | $ | (0.06 | ) | — |  | $ | 0.33 |
Weighted average number of shares |  | 39.6 |  |  |  | 40.9 |  |  |  |  |  |  |  |  |  |  |  | 39.6 |  |  |  | 40.9 |

Note: Amounts may not calculate precisely due to rounding.

(a) Acquisition-related amortization expense.

(b) $0.2 million in restructuring charges.

(c) In addition to the $0.2 million in restructuring charges, the remaining adjustment relates to the income tax effect of the non-GAAP adjustments determined utilizing the ‘with or without method.’ The non-GAAP low case is forecast to reduce tax expense by $3.4 million, and the non-GAAP high case is forecast to increase tax expense by $1.9 million.

This table includes financial measures adjusted for the impact of certain items; these financial measures are therefore not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These Non-GAAP financial measures consider exclusion of: share-based compensation expense; one-time charges relating to restructuring initiatives, non-cash asset impairments, certain other non-operating gains and losses, and acquisition-related items such as one-time transaction costs, non-cash amortization of acquired intangible assets, and the stepped-up cost of sales associated with the purchase accounting of acquired inventory.

These non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. By excluding these items, non-GAAP financial measures are intended to facilitate meaningful comparisons to historical operating results, competitors’ operating results, and estimates made by securities analysts. Management is evaluated on key performance metrics including adjusted EBITDA, which is used to determine management incentive compensation as well as forecast future periods. These non-GAAP financial measures may be useful to investors in allowing for greater transparency of supplemental information used by management in its financial and operational decision-making. In addition, similar non-GAAP financial measures have historically been reported to investors; the inclusion of comparable numbers provides consistency in financial reporting. Investors are encouraged to review the reconciliation of the non-GAAP financial measures used in this news release to their most directly comparable GAAP financial measures.