GlobeNewswire Inc | Aug 3, 2020 04:05PM EDT

August 03, 2020

Second Quarter 2020 Highlights:

-- Revenues of $98.6 million, compared with $97.8 million in the same period last year -- GAAP net loss of $8.3 million, or $0.17 loss per diluted share -- Non-GAAP net income of $5.5 million, or $0.11 per diluted share

PLAINVIEW, N.Y., Aug. 03, 2020 (GLOBE NEWSWIRE) -- Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its second quarter ended June 30, 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

GAAPResults Q2 '20 Q2 '19Revenue $ 98.6 $ 97.8 Net income (loss) $ (8.3 ) $ (15.6 )Diluted earnings (loss) per share $ (0.17 ) $ (0.33 )

Non-GAAPResults Q2 '20 Q2 '19Net income (loss) $ 5.5 $ (3.0 )Operating income (loss) $ 8.0 $ (1.6 )Diluted earnings (loss) per share $ 0.11 $ (0.06 )

Despite the pandemic, we have been executing well thanks to our dedicated global team. All of our sites have been operating at or near normal capacity throughout the quarter, commented William J. Miller, Ph.D., Chief Executive Officer.

We have strong customer engagements across multiple product lines and have a healthy backlog. Our Scientific and Industrial market continues to perform well driven by sales to our data storage customers, continued Dr. Miller. We again posted solid financials driving Non-GAAP profitability and strong cashflow from operations contributing to significant improvements in year over year profitability. Overall, we believe our transformation is delivering financial results and we are optimistic about the second half of the year.

Guidance and Outlook

The following guidance is provided for Veecos third quarter 2020:

-- Revenue is expected in the range of $100 million to $120 million -- GAAP earnings (loss) per share is expected in the range of ($0.12) to $0.04 -- Non-GAAP earnings per share are expected in the range of $0.10 to $0.26

Please refer to the tables at the end of this press release for further details.

Conference Call Information

A conference call reviewing these results has been scheduled for today, August 3, 2020 starting at 4:30pm ET. To join the call, dial 1-800-437-2398 (toll free) or 1-929-477-0577 and use passcode 6870712. 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 Veecos 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: Anthony Bencivenga (516) 252-1438abencivenga@veeco.com

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

Veeco InstrumentsInc. and Subsidiaries Condensed Consolidated Statements of Operations(in thousands, except per share amounts) (unaudited)

Three months ended Six months ended June30, June30, 2020 2019 2020 2019 Net sales $ 98,637 $ 97,822 $ 203,139 $ 197,193 Cost of sales 56,743 61,537 114,826 126,192 Gross profit 41,894 36,285 88,313 71,001 Operating expenses, net:Research and 19,254 22,922 38,449 46,262 developmentSelling, general, 17,818 19,757 36,123 39,660 and administrativeAmortization of 3,834 4,243 7,671 8,460 intangible assetsRestructuring 472 616 1,097 2,046 Asset impairment 281 ? 281 ? Other operatingexpense (income), (174 ) (44 ) (283 ) (80 ) netTotal operating 41,485 47,494 83,338 96,348 expenses, netOperating income 409 ) 4,975 (25,347 ) (loss) (11,209Interest expense, (5,614 ) (4,211 ) (10,479 ) (8,412 ) netLoss onextinguishment of (3,046 ) ? (3,046 ) ? debtIncome (loss) (8,251 ) ) (8,550 ) (33,759 ) before income taxes (15,420Income tax expense 51 145 319 336 (benefit)Net income (loss) $ (8,302 ) $ ) $ (8,869 ) $ (34,095 ) (15,565 Income (loss) per common share:Basic $ (0.17 ) $ (0.33 ) $ (0.18 ) $ (0.72 ) Diluted $ (0.17 ) $ (0.33 ) $ (0.18 ) $ (0.72 ) Weighted average number of shares:Basic 48,109 47,112 48,147 47,145 Diluted 48,109 47,112 48,147 47,145

Veeco InstrumentsInc. and Subsidiaries Condensed Consolidated Balance Sheets(in thousands)

June30, December31, 2020 2019 (unaudited) Assets Current assets: Cash and cash equivalents $ 188,203 $ 129,294Restricted cash 647 657Short-term investments 112,279 115,252Accounts receivable, net 67,291 45,666Contract assets 13,180 25,351Inventories 136,555 133,067Deferred cost of sales 1,676 445Prepaid expenses and other current assets 18,544 14,966Assets held for sale ? 11,180Total current assets 538,375 475,878Property, plant and equipment, net 69,170 75,711Operating lease right-of-use assets 12,981 14,453Intangible assets, net 53,846 61,518Goodwill 181,943 181,943Deferred income taxes 1,555 1,549Other assets 7,200 7,036Total assets $ 865,070 $ 818,088 Liabilities and stockholders? equity Current liabilities: Accounts payable $ 25,973 $ 21,281Accrued expenses and other current liabilities 42,306 41,243Customer deposits and deferred revenue 58,281 54,870Income taxes payable 923 830Total current liabilities 127,483 118,224Deferred income taxes 5,844 5,648Long-term debt 317,314 300,068Operating lease long-term liabilities 9,004 10,300Other liabilities 10,094 9,336Total liabilities 469,739 443,576 Total stockholders? equity 395,331 374,512Total liabilities and stockholders? equity $ 865,070 $ 818,088

Veeco InstrumentsInc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Financial Data(in thousands, except per share amounts) (unaudited)

Non-GAAPAdjustments Share-Based Threemonthsended GAAP Compensation Amortization Other Non-GAAP June30,2020Net sales $ 98,637 $ 98,637 Gross 41,894 474 19 42,387 profitGross 42.5 % 43.0 %marginOperating 41,485 (2,500 ) (3,834 ) (794 ) 34,357 expensesOperatingincome 409 2,974 3,834 813 ^ 8,030 (loss)Netincome (8,302 ) 2,974 3,834 7,009 ^ 5,515 (loss) Income(loss)per commonshare:Basic $ (0.17 ) $ 0.11 Diluted (0.17 ) 0.11 Weightedaverage number ofshares:Basic 48,109 48,109 Diluted 48,109 48,818

^ - See table below for additional details.

Veeco InstrumentsInc. and SubsidiariesOther Non-GAAP Adjustments(in thousands) (unaudited)

Three months ended June30, 2020 Restructuring 472 Asset impairment 281 Depreciation of PP&E fair value step-up associated with the 60 Ultratech purchase accountingSubtotal 813 Non-cash interest expense 3,457 Loss on extinguishment of debt 3,046 Non-GAAP tax adjustment * (307 )Total Other 7,009

* - 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 InstrumentsInc. and SubsidiariesReconciliation of GAAP to Non-GAAP Financial Data(in thousands, except per share amounts) (unaudited)

Non-GAAPAdjustments Share-based Threemonthsended GAAP Compensation Amortization Other Non-GAAP June30,2019Net sales $ 97,822 $ 97,822 Gross 36,285 595 62 36,942 profitGross 37.1 % 37.8 %marginOperating 47,494 (3,993 ) (4,243 ) (741 ) 38,517 expensesOperating income (11,209 ) 4,588 4,243 803 ^ (1,575 ) (loss)Net income (15,565 ) 4,588 4,243 3,751 ^ (2,983 ) (loss) Income(loss)per commonshare:Basic $ (0.33 ) $ (0.06 ) Diluted (0.33 ) (0.06 ) Weightedaverage number ofshares:Basic 47,112 47,112 Diluted 47,112 47,112

^ - See table below for additional details.

Veeco InstrumentsInc. and SubsidiariesOther Non-GAAP Adjustments(in thousands) (unaudited)

Three months ended June30, 2019 Restructuring 616 Depreciation of PP&E fair value step-up associated with the 187 Ultratech purchase accountingSubtotal 803 Non-cash interest expense 3,138 Non-GAAP tax adjustment * (190 )Total Other 3,751

* - 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 InstrumentsInc. and SubsidiariesReconciliation of GAAP Net Income (loss) to Non-GAAP Operating Income (loss)(in thousands) (unaudited)

Three Three months months ended ended June30, June30, 2020 2019GAAP Net income (loss) $ (8,302 ) $ ) (15,565Share-based compensation 2,974 4,588 Amortization 3,834 4,243 Restructuring 472 616 Asset impairment 281 ? Depreciation of PP&E fair value step-up associated 60 187 with the Ultratech purchase accountingInterest (income) expense, net 5,614 4,211 Loss on extinguishment of debt 3,046 ? Income tax expense (benefit) 51 145 Non-GAAP Operating income (loss) $ 8,030 $ (1,575 )

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.

Veeco InstrumentsInc. and SubsidiariesReconciliation of GAAP to Non-GAAP Financial Data(in millions, except per share amounts)(unaudited)

Non-GAAPAdjustments Guidancefor thethree Share-based monthsendingSeptember GAAP Compensation Amortization Other Non-GAAP 30, 2020Net sales $ 100 - $ 120 $ 100 - $ 120 Gross 42 - 51 1 ? ? 43 - 52 profitGross 42 % - 44 % 42 % - 44 % marginOperating 41 - 43 (2 ) (4 ) ? 35 - 37 expensesOperatingincome 1 - 8 3 4 ? 8 - 15 (loss)Netincome $ (5 ) - $ 2 3 4 3 $ 5 - $ 12 (loss) Income(loss)per $ ) - $ 0.04 $ 0.10 - $ 0.26 diluted (0.12commonshareWeightedaverage 48 48 48 48 number ofshares

Veeco InstrumentsInc. and SubsidiariesReconciliation of GAAP Net Income (loss) to Non-GAAP Operating Income (Loss)(in millions) (unaudited)

Guidance for the three months ending September 30, 2020GAAP Net income (loss) $ ) - $ 2 (5Share-based compensation 3 - 3Amortization 4 - 4Interest expense, net 6 - 6Non-GAAP Operating income (loss) $ 8 - $ 15

Note: Amounts may not calculate precisely due to rounding.

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.