GlobeNewswire Inc | May 4, 2021 04:05PM EDT

May 04, 2021

First Quarter 2021 Highlights:

-- Revenues of $133.7 million, compared with $104.5 million in the same period last year -- GAAP net income of $2.5 million, or $0.05 per diluted share, compared with a loss of $0.6 million, or $0.01 loss per diluted share in the same period last year -- Non-GAAP net income of $12.6 million, or $0.25 per diluted share, compared with $10.9 million, or $0.22 per diluted share in the same period last year

PLAINVIEW, N.Y., May 04, 2021 (GLOBE NEWSWIRE) -- Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its first quarter ended March 31, 2021. 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 Q1 '21 Q1 '20Revenue $ 133.7 $ 104.5 Net income (loss) $ 2.5 $ (0.6 )Diluted earnings (loss) per share $ 0.05 $ (0.01 )

Non-GAAPResults Q1 '21 Q1 '20Net income (loss) $ 12.6 $ 10.9 Operating income (loss) $ 16.1 $ 12.7 Diluted earnings (loss) per share $ 0.25 $ 0.22

Veeco started off the year strong by delivering solid first quarter results. We improved revenue and profitability year-on-year as we continued to invest for growth, commented William J. Miller, Ph.D., Chief Executive Officer. Revenue in the quarter was driven by our semiconductor and data storage products and we are on track to grow in 2021.

We are also making progress toward our long-term growth by actively engaging with customers in the semiconductor and compound semiconductor markets. We shipped multiple evaluation systems to leading device manufacturers as part of our strategy to penetrate targeted high-growth markets. Additionally, construction is well underway at our new San Jose manufacturing facility to better meet the demands of our semiconductor customers.

Guidance and Outlook

The following guidance is provided for Veecos second quarter 2021:

-- Revenue is expected in the range of $125 million to $145 million -- GAAP diluted earnings (loss) per share are expected in the range of $(0.06) to $0.11 -- Non-GAAP diluted earnings per share are expected in the range of $0.17 to $0.35

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, May 4, 2021 starting at 5:00pm ET. To join the call, dial 1-800-437-2398 (toll free) or 1-929-477-0577 and use passcode 4450990. 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

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 managements 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 Companys 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 managements 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.

-financial tables attached-

Veeco Contacts: Investors: Anthony Bencivenga (516) abencivenga@veeco.com 252-1438Media: Kevin Long (516) klong@veeco.com 714-3978

Veeco InstrumentsInc. and SubsidiariesCondensed Consolidated Statements of Operations(in thousands, except per share amounts)(unaudited) Three months ended March31, 2021 2020 Net sales $ 133,714 $ 104,502 Cost of sales 78,800 58,083 Gross profit 54,914 46,419 Operating expenses, net: Research and development 21,844 19,195 Selling, general, and administrative 20,255 18,304 Amortization of intangible assets 3,354 3,837 Restructuring ? 625 Other operating expense (income), net 46 (109 )Total operating expenses, net 45,499 41,852 Operating income (loss) 9,415 4,567 Interest expense, net (6,623 ) (4,866 )Income (loss) before income taxes 2,792 (299 )Income tax expense (benefit) 298 268 Net income (loss) $ 2,494 $ (567 ) Income (loss) per common share: Basic $ 0.05 $ (0.01 )Diluted $ 0.05 $ (0.01 ) Weighted average number of shares: Basic 48,624 47,811 Diluted 53,050 47,811

Veeco InstrumentsInc. and SubsidiariesCondensed Consolidated Balance Sheets(in thousands)

March31, December31, 2021 2020 (unaudited) Assets Current assets: Cash and cash equivalents $ 140,733 $ 129,625Restricted cash 653 658Short-term investments 186,142 189,771Accounts receivable, net 87,491 79,991Contract assets 20,558 21,246Inventories 156,216 145,906Deferred cost of sales 596 433Prepaid expenses and other current assets 25,778 19,301Total current assets 618,167 586,931Property, plant and equipment, net 65,207 65,271Operating lease right-of-use assets 29,548 10,275Intangible assets, net 42,831 46,185Goodwill 181,943 181,943Deferred income taxes 1,440 1,440Other assets 6,106 6,019Total assets $ 945,242 $ 898,064 Liabilities and stockholders? equity Current liabilities: Accounts payable $ 42,638 $ 33,656Accrued expenses and other current 51,064 44,876liabilitiesCustomer deposits and deferred revenue 68,907 67,235Income taxes payable 1,086 914Total current liabilities 163,695 146,681Deferred income taxes 5,236 5,240Long-term debt 324,629 321,115Operating lease long-term liabilities 31,421 6,305Other liabilities 7,800 10,349Total liabilities 532,781 489,690 Total stockholders? equity 412,461 408,374Total liabilities and stockholders? equity $ 945,242 $ 898,064

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 March31,2021Net sales $ 133,714 $ 133,714 Gross 54,914 495 32 55,441 profitGross 41.1 % 41.5 %marginOperating 45,499 (2,742 ) (3,354 ) (73 ) 39,330 expensesOperatingincome 9,415 3,237 3,354 105 ^ 16,111 (loss)Net income 2,494 3,237 3,354 3,544 ^ 12,629 (loss) Income(loss) per commonshare:Basic $ 0.05 $ 0.26 Diluted 0.05 0.25 Weightedaverage number ofshares:Basic 48,624 48,624 Diluted ^ 53,050 50,880 (1)



_________________^ - See table below for additional details.

(1)- The non-GAAP incremental dilutive shares includes the impact of the Companys 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 Companys 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 March 31, 2021 was $20.80, and therefore 0.8 million shares were included in the non-GAAP diluted share count, and 2.9 million shares were included in the GAAP diluted share count related to the 2027 Notes.

Veeco InstrumentsInc. and SubsidiariesOther Non-GAAP Adjustments(in thousands)(unaudited) Three months ended March31, 2021 Depreciation of PP&E fair value step-up associated with the $ 96 Ultratech purchase accountingOther 9 Subtotal 105 Non-cash interest expense 3,514 Non-GAAP tax adjustment * (75 )Total Other $ 3,544



_________________* - 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 March31,2020Net sales $ 104,502 $ 104,502 Gross 46,419 521 21 46,961 profitGross 44.4 % 44.9 %marginOperating 41,852 (3,125 ) (3,837 ) (667 ) 34,223 expensesOperatingincome 4,567 3,646 3,837 688 ^ 12,738 (loss)Net income (567 ) 3,646 3,837 3,935 ^ 10,851 (loss) Income(loss) per commonshare:Basic $ (0.01 ) $ 0.23 Diluted (0.01 ) 0.22 Weightedaverage number ofshares:Basic 47,811 47,811 Diluted 47,811 48,437

_________________^ - See table below for additional details.

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

Three months ended March31, 2020 Restructuring $ 625 Depreciation of PP&E fair value step-up associated with the 63 Ultratech purchase accountingSubtotal 688 Non-cash interest expense 3,320 Non-GAAP tax adjustment * (73 )Total Other $ 3,935

_________________* - 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 March31, March31, 2021 2020GAAP Net income (loss) $ 2,494 $ (567 )Share-based compensation 3,237 3,646 Amortization 3,354 3,837 Restructuring ? 625 Depreciation of PP&E fair value step-upassociated with the Ultratech purchase 96 63 accountingInterest (income) expense, net 6,623 4,866 Income tax expense (benefit) 298 268 Other 9 ? Non-GAAP Operating income (loss) $ 16,111 $ 12,738

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 monthsendingJune 30, GAAP Compensation Amortization Other Non-GAAP2021Net sales $ 125 - $ 145 $ 125 - $ 145 Gross 50 - 61 1 ? ? 51 - 62 profitGross 40% - 42% 40% - 42% marginOperating 45 - 47 (3) (3) (1) 38 - 40 expensesOperatingincome 5 - 14 4 3 1 13 - 22 (loss)Netincome $ (3) - $ 6 4 3 5 $ 9 - $ 18 (loss) Income(loss)per $ (0.06) - $ 0.11 $ 0.17 - $ 0.35 dilutedcommonshareWeightedaveragenumber of 49 53 51 51 shares ^(1)

_________________(1)- The non-GAAP incremental dilutive shares includes the impact of the Companys 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 Companys 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.

Veeco InstrumentsInc. and SubsidiariesReconciliation of GAAP Net Income (loss) to Non-GAAP Operating Income (Loss)(in millions)(unaudited) Guidance for the three months ending June 30, 2021GAAP Net income (loss) $ (3 ) - $ 6Share-based compensation 4 - 4Amortization 3 - 3Interest expense, net 7 - 7Other 2 - 2Non-GAAP Operating income (loss) $ 13 - $ 22

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.