EX-99.1 2 veco-20220808xex99d1.htm EX-99.1

EXHIBIT 99.1

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VEECO REPORTS SECOND QUARTER 2022 FINANCIAL RESULTS

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Second Quarter 2022 Highlights:

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| ● | Revenues of $164.0 million, compared with $146.3 million in the same period last year

| ● | GAAP net income of $9.7 million, or $0.18 per diluted share, compared with $6.3 million, or $0.12 per diluted share in the same period last year

| ● | Non-GAAP net income of $20.0 million, or $0.35 per diluted share, compared with $17.9 million, or $0.35 per diluted share in the same period last year

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Plainview, N.Y., August 8, 2022 -- Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its second quarter ended June 30, 2022. Results are reported in accordance 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.

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

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​ | ​ | ​ | ​ | ​ | ​ | ​
GAAP Results |  | Q2 '22 | ​ | Q2 '21
Revenue | ​ | $ | 164.0 | ​ | $ | 146.3
Net income | ​ | $ | 9.7 | ​ | $ | 6.3
Diluted earnings per share | ​ | $ | 0.18 | ​ | $ | 0.12

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​ | ​ | ​ | ​ | ​ | ​ | ​
Non-GAAP Results |  | Q2 '22 | ​ | Q2 '21
Operating income | ​ | $ | 23.0 | ​ | $ | 21.3
Net income | ​ | $ | 20.0 | ​ | $ | 17.9
Diluted earnings per share | ​ | $ | 0.35 | ​ | $ | 0.35

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“We had another record revenue quarter in our semiconductor business with significant contributions coming from our laser annealing and advanced packaging lithography systems,” commented Bill Miller, Veeco’s Chief Executive Officer. “Demand is stemming predominantly from advanced and trailing node logic applications where Veeco’s semiconductor exposure is greatest. Our new San Jose facility is on track to be completed by the end of the third quarter, and the increased manufacturing footprint is enabling our semiconductor growth.”

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“We’re experiencing success with the investments we’ve made in our evaluation program as demonstrated by the continued adoption of our technologies by leading customers. Looking ahead, the Veeco United team remains committed to achieving our full year 2022 targets.”

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1

Guidance and Outlook

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The following guidance is provided for Veeco’s third quarter 2022:

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| ● | Revenue is expected in the range of $160 million to $180 million

| ● | GAAP diluted earnings per share are expected in the range of $0.14 to $0.30

| ● | Non-GAAP diluted earnings per share are expected in the range of $0.32 to $0.48

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Conference Call Information

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A conference call reviewing these results has been scheduled for today, August 8, 2022 starting at 5:00pm ET. To join the call, dial 1-888-220-8474 (toll free) or 1-646-828-8193 and use passcode 6606156. Participants may also access a live webcast of the call by visiting the investor relations section of Veeco's website at ir.veeco.com. A replay of the webcast will be made available on the Veeco website that evening. We will post an accompanying slide presentation to our website prior to the beginning of the call.

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About Veeco

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Veeco (NASDAQ: VECO) is an innovative manufacturer of semiconductor process equipment. Our proven ion beam, laser annealing, lithography, MOCVD, and single wafer etch & clean technologies play an integral role in the fabrication and packaging of advanced semiconductor devices. With equipment designed to optimize performance, yield and cost of ownership, Veeco holds leading technology positions in the markets we serve. To learn more about Veeco’s systems and service offerings, visit www.veeco.com.

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Forward-looking Statements

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This press release contains “forward-looking statements”, within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, as amended, that are based on management’s expectations, estimates, projections and assumptions. Words such as “expects,” “anticipates,” “plans,” “believes,” “scheduled,” “estimates” and variations of these words and similar expressions are intended to identify forward-looking statements. Forward-looking statements include, but are not limited to, those regarding anticipated growth and trends in our businesses and markets, industry outlooks and demand drivers, our investment and growth strategies, our development of new products and technologies, our business outlook for current and future periods, the impact of the COVID-19 pandemic, our ongoing transformation initiative and the effects thereof on our operations and financial results; and other statements that are not historical facts. These statements and their underlying assumptions are subject to risks and uncertainties and are not guarantees of future performance. Factors that could cause actual results to differ materially from those expressed or implied by such statements include, without limitation: the level of demand for our products; global economic and industry conditions; the effects of regional or global health epidemics, including the effects of the COVID-19 pandemic on the Company’s operations and on those of our customers and suppliers; global trade issues, including the ongoing trade disputes between the U.S. and China, and changes in trade and export license policies; our dependency on third-party suppliers and outsourcing partners; the timing of customer orders; our ability to develop, deliver and support new products and technologies; our ability to expand our current markets, increase market share and develop new markets; the concentrated nature of our customer base; our ability to obtain and protect intellectual property rights in key technologies; our ability to achieve the objectives of operational and strategic initiatives and attract, motivate and retain key employees; the variability of results among products and end-markets, and our ability to accurately forecast future results, market conditions, and customer requirements; the impact of our indebtedness, including our convertible senior notes and our capped call transactions; and other risks and uncertainties described in our SEC filings on Forms 10-K, 10-Q and 8-K, and from time-to-time in our other SEC reports. All forward-looking statements speak only to management’s expectations, estimates, projections and assumptions as of the date of this press release or, in the case of any document referenced herein or incorporated by reference, the date of that document. The Company does not undertake any obligation to update or publicly revise any forward-looking statements to reflect events, circumstances or changes in expectations after the date of this press release.

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-financial tables attached-

Veeco Contacts:

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Investors:Anthony Bencivenga (516) 252-1438 abencivenga@veeco.com

Media:Kevin Long (516) 714-3978 klong@veeco.com

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2

Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)
(unaudited)

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three months ended June 30, | ​ | Six months ended June 30, |
​ |  | 2022 |  | 2021 |  | 2022 |  | 2021 |
Net sales |  | $ | 163,999 |  | $ | 146,344 |  | $ | 320,425 |  | $ | 280,059 | ​
Cost of sales | ​ |  | 99,732 | ​ |  | 86,178 | ​ |  | 190,146 | ​ |  | 164,978 | ​
Gross profit | ​ |  | 64,267 | ​ |  | 60,166 | ​ |  | 130,279 | ​ |  | 115,081 | ​
Operating expenses, net: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Research and development | ​ |  | 26,016 | ​ |  | 22,553 | ​ |  | 50,133 | ​ |  | 44,398 | ​
Selling, general, and administrative | ​ |  | 22,950 | ​ |  | 21,466 | ​ |  | 45,844 | ​ |  | 41,722 | ​
Amortization of intangible assets | ​ |  | 2,505 | ​ |  | 2,976 | ​ |  | 5,009 | ​ |  | 6,330 | ​
Other operating expense (income), net | ​ |  | (27) | ​ |  | (81) | ​ |  | (47) | ​ |  | (36) | ​
Total operating expenses, net | ​ |  | 51,444 | ​ |  | 46,914 | ​ |  | 100,939 | ​ |  | 92,414 | ​
Operating income | ​ |  | 12,823 | ​ |  | 13,252 | ​ |  | 29,340 | ​ |  | 22,667 | ​
Interest expense, net | ​ |  | (2,635) | ​ |  | (6,585) | ​ |  | (5,438) | ​ |  | (13,208) | ​
Income before income taxes | ​ |  | 10,188 | ​ |  | 6,667 | ​ |  | 23,902 | ​ |  | 9,459 | ​
Income tax expense (benefit) | ​ |  | 533 | ​ |  | 319 | ​ |  | 917 | ​ |  | 617 | ​
Net income |  | $ | 9,655 |  | $ | 6,348 |  | $ | 22,985 |  | $ | 8,842 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Income per common share: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Basic |  | $ | 0.19 |  | $ | 0.13 |  | $ | 0.46 |  | $ | 0.18 | ​
Diluted |  | $ | 0.18 |  | $ | 0.12 |  | $ | 0.43 |  | $ | 0.17 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted average number of shares: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Basic | ​ |  | 49,697 | ​ |  | 48,743 | ​ |  | 49,702 | ​ |  | 48,758 | ​
Diluted | ​ |  | 59,455 | ​ |  | 53,942 | ​ |  | 59,521 | ​ |  | 53,539 | ​

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Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets

(in thousands)

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, | ​ | December 31,
​ |  | 2022 |  | 2021
​ | ​ | (unaudited) | ​ | ​ | ​
Assets | ​ | ​ | ​ | ​ | ​ | ​
Current assets: | ​ | ​ | ​ | ​ | ​ | ​
Cash and cash equivalents | ​ | $ | 116,916 | ​ | $ | 119,747
Restricted cash | ​ |  | 727 | ​ |  | 725
Short-term investments | ​ |  | 113,159 | ​ |  | 104,181
Accounts receivable, net | ​ |  | 126,881 | ​ |  | 109,609
Contract assets | ​ |  | 17,367 | ​ |  | 18,293
Inventories | ​ |  | 176,491 | ​ |  | 170,858
Prepaid expenses and other current assets | ​ |  | 17,743 | ​ |  | 25,974
Total current assets | ​ |  | 569,284 | ​ |  | 549,387
Property, plant and equipment, net | ​ |  | 105,031 | ​ |  | 99,743
Operating lease right-of-use assets | ​ | ​ | 26,405 | ​ |  | 28,813
Intangible assets, net | ​ |  | 28,896 | ​ |  | 33,905
Goodwill | ​ |  | 181,943 | ​ |  | 181,943
Deferred income taxes | ​ |  | 1,639 | ​ |  | 1,639
Other assets | ​ |  | 3,454 | ​ |  | 3,546
Total assets | ​ | $ | 916,652 | ​ | $ | 898,976
​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities and stockholders’ equity | ​ | ​ | ​ | ​ | ​ | ​
Current liabilities: | ​ | ​ | ​ | ​ | ​ | ​
Accounts payable | ​ | $ | 47,074 | ​ | $ | 44,456
Accrued expenses and other current liabilities | ​ |  | 56,918 | ​ |  | 79,752
Customer deposits and deferred revenue | ​ |  | 74,560 | ​ |  | 63,136
Income taxes payable | ​ |  | 1,598 | ​ |  | 1,860
Current portion of long-term debt | ​ | ​ | 20,120 | ​ | ​ | —
Total current liabilities | ​ |  | 200,270 | ​ |  | 189,204
Deferred income taxes | ​ |  | 4,774 | ​ |  | 4,792
Long-term debt | ​ |  | 254,055 | ​ |  | 229,438
Long-term operating lease liabilities | ​ | ​ | 31,772 | ​ |  | 32,834
Other liabilities | ​ |  | 5,044 | ​ |  | 5,080
Total liabilities | ​ |  | 495,915 | ​ |  | 461,348
​ | ​ | ​ | ​ | ​ | ​ | ​
Total stockholders’ equity | ​ |  | 420,737 | ​ |  | 437,628
Total liabilities and stockholders’ equity | ​ | $ | 916,652 | ​ | $ | 898,976

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Note on Reconciliation Tables

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The below tables include 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 exclude items such as: share-based compensation expense; charges relating to restructuring initiatives; non-cash asset impairments; certain other non-operating gains and losses; and acquisition-related items such as transaction costs, non-cash amortization of acquired intangible assets, and certain integration costs.

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 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 Non-GAAP Operating income (loss), which is used to determine management incentive compensation as well as to 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.

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Reconciliation of GAAP to Non-GAAP Financial Data (Q2 2022)

(in thousands)
(unaudited)

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Non-GAAP Adjustments | ​ | ​ | ​ |
​ | ​ | ​ | ​ | ​ | Share-Based | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
Three months ended June 30, 2022 |  | GAAP |  | Compensation |  | Amortization |  | Other |  | Non-GAAP |
Net sales | ​ | $ | 163,999 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 163,999 |
Gross profit |  | ​ | 64,267 |  | 1,251 | ​ | ​ |  | 654 |  | ​ | 66,172 | ​
Gross margin |  | ​ | 39.2 | % | ​ | ​ | ​ | ​ | ​ |  | ​ | 40.3 | %
Operating expenses |  | ​ | 51,444 |  | (5,027) | ​ | (2,505) | ​ | (719) | ​ | ​ | 43,193 | ​
Operating income |  | ​ | 12,823 |  | 6,278 | ​ | 2,505 |  | 1,373 | ^ | ​ | 22,979 | ​
Net income |  | ​ | 9,655 |  | 6,278 |  | 2,505 |  | 1,537 | ^ | ​ | 19,975 | ​

^ | - See table below for additional details.

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Other Non-GAAP Adjustments (Q2 2022)

(in thousands)
(unaudited)

​ | ​ | ​
Three months ended June 30, 2022 |  | ​
Transition expenses related to San Jose expansion project | $ | 1,313
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting | ​ | 60
Subtotal | ​ | 1,373
Non-cash interest expense |  | 239
Non-GAAP tax adjustment * |  | (75)
Total Other | $ | 1,537

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

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Net Income per Common Share (Q2 2022)

(in thousands, except per share amounts)
(unaudited)

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three months ended June 30, 2022
​ | ​ | GAAP | ​ | Non-GAAP
Numerator: | ​ | ​ | ​ | ​ | ​ | ​
Net income |  | $ | 9,655 |  | $ | 19,975
Interest expense associated with convertible notes | ​ |  | 1,273 |  |  | 2,467
Net income available to common shareholders | ​ | $ | 10,928 | ​ | $ | 22,442
​ | ​ | ​ | ​ | ​ | ​ | ​
Denominator: | ​ | ​ | ​ | ​ | ​ | ​
Basic weighted average shares outstanding | ​ | ​ | 49,697 | ​ | ​ | 49,697
Effect of potentially dilutive share-based awards | ​ | ​ | 816 | ​ | ​ | 816
Dilutive effect of 2023 Convertible Senior Notes | ​ | ​ | — | ​ | ​ | 504
Dilutive effect of 2025 Convertible Senior Notes | ​ | ​ | — |  | ​ | 5,521
Dilutive effect of 2027 Convertible Senior Notes (1) | ​ |  | 8,942 |  |  | 6,771
Diluted weighted average shares outstanding | ​ | ​ | 59,455 | ​ | ​ | 63,309
​ | ​ | ​ | ​ | ​ | ​ | ​
Net income per common share: | ​ | ​ | ​ | ​ | ​ | ​
Basic | ​ | $ | 0.19 | ​ | $ | 0.40
Diluted | ​ | $ | 0.18 | ​ | $ | 0.35

(1) - The non-GAAP incremental dilutive shares includes the impact of the Company’s capped call transaction issued concurrently with our 2027 Notes, and as such, an effective conversion price of $18.46 is used when determining incremental shares to add to the dilutive share count. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, an effective conversion price of $13.98 is used when determining incremental shares to add to the dilutive share count.

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Reconciliation of GAAP to Non-GAAP Financial Data (Q2 2021)

(in thousands, except per share amounts)
(unaudited)

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Non-GAAP Adjustments | ​ |  | ​ | ​
​ | ​ | ​ | ​ | ​ | Share-based | ​ | ​ | ​ | ​ | ​ | ​ | ​
Three months ended June 30, 2021 |  | ​ | GAAP |  | Compensation |  | Amortization |  | Other |  | Non-GAAP | ​
Net sales | ​ | $ | 146,344 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 146,344 | ​
Gross profit | ​ |  | 60,166 |  | 650 | ​ | ​ |  | 31 | ​ |  | 60,847 | ​
Gross margin | ​ |  | 41.1 | % | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 41.6 | %
Operating expenses | ​ |  | 46,914 |  | (3,717) | ​ | (2,976) | ​ | (671) | ​ | ​ | 39,550 | ​
Operating income | ​ |  | 13,252 |  | 4,367 | ​ | 2,976 |  | 702 | ^ | ​ | 21,297 | ​
Net income | ​ |  | 6,348 |  | 4,367 |  | 2,976 |  | 4,214 | ^ | ​ | 17,905 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Income per common share: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Basic | ​ | $ | 0.13 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 0.37 | ​
Diluted | ​ |  | 0.12 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 0.35 | ​
Weighted average number of shares: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Basic | ​ |  | 48,743 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 48,743 | ​
Diluted (1) | ​ |  | 53,942 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 51,772 | ​

^ | - See table below for additional details.

(1) - The non-GAAP incremental dilutive shares includes the impact of the Company’s capped call transaction issued concurrently with our 2027 Notes, and as such, no incremental shares are added to the dilutive share count in periods in which the average stock price per share is below $18.46. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, incremental shares are added to the dilutive share count in periods in which the average stock price per share is above $13.98, and the Company is in a net income position. The average stock price for the three months ended June 30, 2021 was $22.94, and therefore 1.3 million shares were included in the non-GAAP diluted share count, and 3.5 million shares were included in the GAAP diluted share count related to the 2027 Notes.

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Other Non-GAAP Adjustments (Q2 2021)

(in thousands)
(unaudited)

​ | ​ | ​
Three months ended June 30, 2021 | ​ | ​
Transition expenses related to San Jose expansion project | $ | 609
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting | ​ | 93
Subtotal | ​ | 702
Non-cash interest expense |  | 3,586
Non-GAAP tax adjustment * |  | (74)
Total Other | $ | 4,214

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

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Reconciliation of GAAP Net Income to Non-GAAP Operating Income (Q2 2022 and 2021)

(in thousands)
(unaudited)

​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three months ended |  | Three months ended
​ | ​ | June 30, 2022 | ​ | June 30, 2021
GAAP Net income | ​ | $ | 9,655 | ​ | $ | 6,348
Share-based compensation | ​ |  | 6,278 | ​ |  | 4,367
Amortization | ​ |  | 2,505 | ​ |  | 2,976
Transition expenses related to San Jose expansion project | ​ |  | 1,313 | ​ |  | 609
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting | ​ |  | 60 | ​ |  | 93
Interest (income) expense, net | ​ |  | 2,635 | ​ |  | 6,585
Income tax expense (benefit) | ​ |  | 533 | ​ |  | 319
Non-GAAP Operating income | ​ | $ | 22,979 | ​ | $ | 21,297

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Reconciliation of GAAP to Non-GAAP Financial Data (Q3 2022)

(in millions, except per share amounts)

(unaudited)

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Non-GAAP Adjustments | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
Guidance for the three months ending | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Share-based | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
September 30, 2022 | ​ | GAAP | ​ | Compensation | ​ | Amortization | ​ | Other | ​ | Non-GAAP |
Net sales |  | $ | 160 |  | - |  | $ | 180 |  | ​ |  | ​ |  | ​ |  | $ | 160 |  | - |  | $ | 180 | ​
Gross profit | ​ |  | 64 |  | - | ​ |  | 75 |  | 1 |  | — |  | 1 | ​ |  | 66 |  | - | ​ |  | 77 | ​
Gross margin | ​ |  | 40% | ​ | - | ​ |  | 42% | ​ | ​ |  | ​ |  | ​ | ​ |  | 41% | ​ | - | ​ |  | 43% | ​
Operating expenses | ​ | ​ | 53 |  | - | ​ |  | 55 | ​ | (5) | ​ | (3) | ​ | (1) | ​ | ​ | 45 |  | - | ​ |  | 47 | ​
Operating income | ​ | ​ | 11 | ​ | - | ​ | ​ | 20 | ​ | 6 | ​ | 3 | ​ | 1 | ​ | ​ | 21 | ​ | - | ​ | ​ | 30 | ​
Net income | ​ | $ | 7 |  | - | ​ | $ | 17 |  | 6 |  | 3 | ​ | 2 | ​ | $ | 18 |  | - | ​ | $ | 28 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Income per diluted common share | ​ | $ | 0.14 |  | - | ​ | $ | 0.30 |  |  |  |  |  |  | ​ | $ | 0.32 |  | - | ​ | $ | 0.48 | ​

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Income per Diluted Common Share (Q3 2022)

(in millions, except per share amounts)
(unaudited)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Guidance for the three months ending September 30, 2022 | ​ | GAAP | ​ | Non-GAAP
Numerator: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income |  | $ | 7 |  | - |  | $ | 17 |  | $ | 18 |  | - |  | $ | 28
Interest expense associated with convertible notes | ​ |  | 1 |  | ​ | ​ |  | 3 |  |  | 2 |  | ​ | ​ |  | 2
Net income available to common shareholders | ​ | $ | 8 | ​ | - | ​ | $ | 20 | ​ | $ | 20 | ​ | - | ​ | $ | 30
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Denominator: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Basic weighted average shares outstanding | ​ | ​ | 50 | ​ | ​ | ​ | ​ | 50 | ​ | ​ | 50 | ​ | ​ | ​ | ​ | 50
Effect of potentially dilutive share-based awards | ​ | ​ | 1 |  | ​ | ​ | ​ | 1 | ​ | ​ | 1 |  | ​ | ​ | ​ | 1
Dilutive effect of 2023 Convertible Senior Notes | ​ | ​ | — | ​ | ​ | ​ | ​ | — | ​ | ​ | — | ​ | ​ | ​ | ​ | —
Dilutive effect of 2025 Convertible Senior Notes | ​ | ​ | — |  | ​ | ​ | ​ | 6 |  | ​ | 6 |  | ​ | ​ | ​ | 6
Dilutive effect of 2027 Convertible Senior Notes (1) | ​ |  | 9 | ​ | ​ | ​ |  | 9 |  |  | 7 | ​ | ​ | ​ |  | 7
Diluted weighted average shares outstanding | ​ | ​ | 60 | ​ | ​ | ​ | ​ | 66 | ​ | ​ | 64 | ​ | ​ | ​ | ​ | 64
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income per common share: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Income per diluted common share | ​ | $ | 0.14 | ​ | - | ​ | $ | 0.30 | ​ | $ | 0.32 | ​ | - | ​ | $ | 0.48

(1) - The non-GAAP incremental dilutive shares includes the impact of the Company’s capped call transaction issued concurrently with our 2027 Notes, and as such, an effective conversion price of $18.46 is used when determining incremental shares to add to the dilutive share count. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, an effective conversion price of $13.98 is used when determining incremental shares to add to the dilutive share count.

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Reconciliation of GAAP Net Income to Non-GAAP Operating Income (Q3 2022)

(in millions)
(unaudited)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Guidance for the three months ending September 30, 2022 |  | ​ | ​ |  | ​ |  | ​ | ​
GAAP Net income | ​ | $ | 7 |  | - | ​ | $ | 17
Share-based compensation | ​ |  | 6 |  | - | ​ |  | 6
Amortization | ​ |  | 3 |  | - | ​ |  | 3
Interest expense, net | ​ |  | 3 |  | - | ​ |  | 3
Other | ​ |  | 2 |  | - | ​ | ​ | 1
Non-GAAP Operating income | ​ | $ | 21 |  | - | ​ | $ | 30

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Note: Amounts may not calculate precisely due to rounding.

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