Veeco Reports First Quarter 2020 Financial Results
First Quarter 2020 Highlights:
- Revenues of $104.5 million, compared with $99.4 million in the same period last year
- GAAP net loss of $0.6 million, or $0.01 loss per diluted share
- Non-GAAP net income of $10.9 million, or $0.22 per diluted share
PLAINVIEW, N.Y., May 07, 2020 (GLOBE NEWSWIRE) — Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its first quarter ended March 31, 2020. 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.
U.S. Dollars in millions, except per share data
| GAAP Results | Q1 ’20 | Q1 ’19 | ||||||
| Revenue | $ | 104.5 | $ | 99.4 | ||||
| Net income (loss) | $ | (0.6 | ) | $ | (18.5 | ) | ||
| Diluted earnings (loss) per share | $ | (0.01 | ) | $ | (0.40 | ) | ||
| Non-GAAP Results | Q1 ’20 | Q1 ’19 | |||||
| Net income (loss) | $ | 10.9 | $ | (6.4 | ) | ||
| Operating income (loss) | $ | 12.7 | $ | (4.8 | ) | ||
| Diluted earnings (loss) per share | $ | 0.22 | $ | (0.14 | ) | ||
“Our employees around the world have exhibited great professionalism and flexibility as they adapt to working from home or new health and safety measures in our facilities. It is because of their efforts that Veeco has been managing well through the COVID-19 pandemic,” commented William J. Miller, Ph.D., Chief Executive Officer. “Our supply chain, manufacturing and service operations have been successful in maintaining our ability to source materials, ship products and provide support for our customers with only minor disruptions.”
“Our semiconductor technologies enable a variety of important megatrends that are expected to perform well, such as cloud and high-performance computing, AI and 5G RF,” continued Dr. Miller. “In the first quarter, sales were strong in our Data Storage market driven by demand in cloud computing. We improved gross margin and reduced operating expenses, driving solid Non-GAAP EPS. Furthermore, our cash balance, quality of our backlog and the cost reductions we realized over the last several quarters give me confidence in our ability to weather uncertainties we may face.”
Guidance and Outlook
Given the level of uncertainty resulting from the COVID-19 pandemic, Veeco is refraining from providing Q2 guidance.
Conference Call Information
A conference call reviewing these results has been scheduled for today, May 7, 2020 starting at 4:30pm ET. To join the call, dial 1-866-288-0540 (toll free) or 1-646-828-8143 and use passcode 9821676. 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.
About Veeco
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.
Forward-looking Statements
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, 2019 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: |
| Anthony Bencivenga (516) 252-1438 | Kevin Long (516) 714-3978 |
| [email protected] | [email protected] |
Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
| Three months ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| Net sales | $ | 104,502 | $ | 99,371 | ||||
| Cost of sales | 58,083 | 64,655 | ||||||
| Gross profit | 46,419 | 34,716 | ||||||
| Operating expenses, net: | ||||||||
| Research and development | 19,195 | 23,340 | ||||||
| Selling, general, and administrative | 18,304 | 19,902 | ||||||
| Amortization of intangible assets | 3,837 | 4,218 | ||||||
| Restructuring | 625 | 1,430 | ||||||
| Other operating expense (income), net | (109 | ) | (34 | ) | ||||
| Total operating expenses, net | 41,852 | 48,856 | ||||||
| Operating income (loss) | 4,567 | (14,140 | ) | |||||
| Interest expense, net | (4,866 | ) | (4,200 | ) | ||||
| Income (loss) before income taxes | (299 | ) | (18,340 | ) | ||||
| Income tax expense (benefit) | 268 | 190 | ||||||
| Net income (loss) | $ | (567 | ) | $ | (18,530 | ) | ||
| Income (loss) per common share: | ||||||||
| Basic | $ | (0.01 | ) | $ | (0.40 | ) | ||
| Diluted | $ | (0.01 | ) | $ | (0.40 | ) | ||
| Weighted average number of shares: | ||||||||
| Basic | 47,811 | 46,848 | ||||||
| Diluted | 47,811 | 46,848 | ||||||
Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
| March 31, | December 31, | |||||
| 2020 | 2019 | |||||
| (unaudited) | ||||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 162,325 | $ | 129,294 | ||
| Restricted cash | 652 | 657 | ||||
| Short-term investments | 79,429 | 115,252 | ||||
| Accounts receivable, net | 84,251 | 45,666 | ||||
| Contract assets | 14,612 | 25,351 | ||||
| Inventories | 129,611 | 133,067 | ||||
| Deferred cost of sales | 1,981 | 445 | ||||
| Prepaid expenses and other current assets | 16,446 | 14,966 | ||||
| Assets held for sale | 11,183 | 11,180 | ||||
| Total current assets | 500,490 | 475,878 | ||||
| Property, plant and equipment, net | 72,291 | 75,711 | ||||
| Operating lease right-of-use assets | 13,159 | 14,453 | ||||
| Intangible assets, net | 57,680 | 61,518 | ||||
| Goodwill | 181,943 | 181,943 | ||||
| Deferred income taxes | 1,549 | 1,549 | ||||
| Other assets | 5,774 | 7,036 | ||||
| Total assets | $ | 832,886 | $ | 818,088 | ||
| Liabilities and stockholders’ equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 36,359 | $ | 21,281 | ||
| Accrued expenses and other current liabilities | 41,568 | 41,243 | ||||
| Customer deposits and deferred revenue | 49,628 | 54,870 | ||||
| Income taxes payable | 954 | 830 | ||||
| Total current liabilities | 128,509 | 118,224 | ||||
| Deferred income taxes | 5,763 | 5,648 | ||||
| Long-term debt | 303,388 | 300,068 | ||||
| Operating lease long-term liabilities | 9,294 | 10,300 | ||||
| Other liabilities | 8,868 | 9,336 | ||||
| Total liabilities | 455,822 | 443,576 | ||||
| Total stockholders’ equity | 377,064 | 374,512 | ||||
| Total liabilities and stockholders’ equity | $ | 832,886 | $ | 818,088 | ||
Veeco Instruments Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Data
(in thousands, except per share amounts)
(unaudited)
| Non-GAAP Adjustments | |||||||||||||||||
| Share-Based | |||||||||||||||||
| Three months ended March 31, 2020 | GAAP | Compensation | Amortization | Other | Non-GAAP | ||||||||||||
| Net sales | $ | 104,502 | $ | 104,502 | |||||||||||||
| Gross profit | 46,419 | 521 | 21 | 46,961 | |||||||||||||
| Gross margin | 44.4 | % | 44.9 | % | |||||||||||||
| Operating expenses | 41,852 | (3,125 | ) | (3,837 | ) | (667 | ) | 34,223 | |||||||||
| Operating income (loss) | 4,567 | 3,646 | 3,837 | 688 | ^ | 12,738 | |||||||||||
| Net income (loss) | (567 | ) | 3,646 | 3,837 | 3,935 | ^ | 10,851 | ||||||||||
| Income (loss) per common share: | |||||||||||||||||
| Basic | $ | (0.01 | ) | $ | 0.23 | ||||||||||||
| Diluted | (0.01 | ) | 0.22 | ||||||||||||||
| Weighted average number of shares: | |||||||||||||||||
| Basic | 47,811 | 47,811 | |||||||||||||||
| Diluted | 47,811 | 48,437 | |||||||||||||||
^ – See table below for additional details.
Veeco Instruments Inc. and Subsidiaries
Other Non-GAAP Adjustments
(in thousands)
(unaudited)
| Three months ended March 31, 2020 | |||
| Restructuring | 625 | ||
| Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting | 63 | ||
| Subtotal | 688 | ||
| Non-cash interest expense | 3,320 | ||
| Non-GAAP tax adjustment * | (73 | ) | |
| Total Other | |||
* – The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.
These 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.
Veeco Instruments Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Data
(in thousands, except per share amounts)
(unaudited)
| Non-GAAP Adjustments | |||||||||||||||||
| Share-based | |||||||||||||||||
| Three months ended March 31, 2019 | GAAP | Compensation | Amortization | Other | Non-GAAP | ||||||||||||
| Net sales | $ | 99,371 | $ | 99,371 | |||||||||||||
| Gross profit | 34,716 | 470 | 47 | 35,233 | |||||||||||||
| Gross margin | 34.9 | % | 35.5 | % | |||||||||||||
| Operating expenses | 48,856 | (2,687 | ) | (4,218 | ) | (1,967 | ) | 39,984 | |||||||||
| Operating income (loss) | (14,140 | ) | 3,157 | 4,218 | 2,014 | ^ | (4,751 | ) | |||||||||
| Net income (loss) | (18,530 | ) | 3,157 | 4,218 | 4,787 | ^ | (6,368 | ) | |||||||||
| Income (loss) per common share: | |||||||||||||||||
| Basic | $ | (0.40 | ) | $ | (0.14 | ) | |||||||||||
| Diluted | (0.40 | ) | (0.14 | ) | |||||||||||||
| Weighted average number of shares: | |||||||||||||||||
| Basic | 46,848 | 46,848 | |||||||||||||||
| Diluted | 46,848 | 46,848 | |||||||||||||||
^ – See table below for additional details.
Veeco Instruments Inc. and Subsidiaries
Other Non-GAAP Adjustments
(in thousands)
(unaudited)
| Three months ended March 31, 2019 | |||
| Restructuring | 1,430 | ||
| Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting | 142 | ||
| Accelerated depreciation | 397 | ||
| Other | 45 | ||
| Subtotal | 2,014 | ||
| Non-cash interest expense | 3,081 | ||
| Non-GAAP tax adjustment * | (308 | ) | |
| Total Other | 4,787 | ||
* – The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.
These 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.
Veeco Instruments Inc. and Subsidiaries
Reconciliation of GAAP Net Income (loss) to Non-GAAP Operating Income (loss)
(in thousands)
(unaudited)
| Three months ended | Three months ended | |||||||
| March 31, 2020 | March 31, 2019 | |||||||
| GAAP Net income (loss) | $ | (567 | ) | $ | (18,530 | ) | ||
| Share-based compensation | 3,646 | 3,157 | ||||||
| Amortization | 3,837 | 4,218 | ||||||
| Restructuring | 625 | 1,430 | ||||||
| Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting | 63 | 142 | ||||||
| Accelerated depreciation | — | 397 | ||||||
| Interest (income) expense, net | 4,866 | 4,200 | ||||||
| Other | — | 45 | ||||||
| Income tax expense (benefit) | 268 | 190 | ||||||
| Non-GAAP Operating income (loss) | $ | 12,738 | $ | (4,751 | ) | |||
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 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.
