GlobeNewswire Inc | Aug 3, 2021 04:05PM EDT

August 03, 2021

Second Quarter 2021 Highlights:

-- Revenues of $146.3 million, compared with $98.6 million in the same period last year -- GAAP net income of $6.3 million, or $0.12 per diluted share, compared with a loss of $8.3 million, or $0.17 loss per diluted share in the same period last year -- Non-GAAP net income of $17.9 million, or $0.35 per diluted share, compared with $5.5 million, or $0.11 per diluted share in the same period last year

PLAINVIEW, N.Y., Aug. 03, 2021 (GLOBE NEWSWIRE) -- Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its second quarter ended June 30, 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 Q2 '21 Q2 '20Revenue $ 146.3 $ 98.6 Net income (loss) $ 6.3 $ (8.3 )Diluted earnings (loss) per share $ 0.12 $ (0.17 )

Non-GAAPResults Q2 '21 Q2 '20Net income (loss) $ 17.9 $ 5.5Operating income (loss) $ 21.3 $ 8.0Diluted earnings (loss) per share $ 0.35 $ 0.11

Veeco delivered solid performance in the second quarter with revenue and EPS at the high end of our guidance range, commented William J. Miller, Ph.D., Chief Executive Officer. Sales were driven primarily by shipments to our Semiconductor and Data Storage customers.

We are on track to deliver exceptional growth in 2021 and our evaluation systems in the field are performing well giving us confidence in our longer term growth plan, continued Dr. Miller. In addition, progress on our new manufacturing facility, supporting the Semiconductor market, is on schedule and will enable us to meet future demand with increased manufacturing capacity.

Guidance and Outlook

The following guidance is provided for Veecos third quarter 2021:

-- Revenue is expected in the range of $135 million to $155 million -- GAAP diluted earnings per share are expected in the range of $0.02 to $0.20 -- Non-GAAP diluted earnings per share are expected in the range of $0.25 to $0.44

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, 2021 starting at 5:00pm ET.To join the call, dial 1-866-248-8441 (toll free) or 1-929-477-0577 and use passcode 9180705. 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) 252-1438 abencivenga@veeco.comMedia: Kevin Long (516) 714-3978 klong@veeco.com



Veeco InstrumentsInc. and SubsidiariesCondensed Consolidated Statements of Operations(in thousands, except per share amounts)(unaudited) Three months ended June30, Six months ended June30, 2021 2020 2021 2020Net sales $ 146,344 $ 98,637 $ 280,059 $ 203,139 Cost of sales 86,178 56,743 164,978 114,826 Gross profit 60,166 41,894 115,081 88,313 Operating expenses, net:Research and 22,553 19,254 44,398 38,449 developmentSelling,general, and 21,466 17,818 41,722 36,123 administrativeAmortizationof intangible 2,976 3,834 6,330 7,671 assetsRestructuring ? 472 ? 1,097 Asset ? 281 ? 281 impairmentOtheroperating (81 ) (174 ) (36 ) (283 )expense(income), netTotaloperating 46,914 41,485 92,414 83,338 expenses, netOperating 13,252 409 22,667 4,975 income (loss)Interest (6,585 ) (5,614 ) (13,208 ) (10,479 )expense, netLoss onextinguishment ? (3,046 ) ? (3,046 )of debtIncome (loss)before income 6,667 (8,251 ) 9,459 (8,550 )taxesIncome taxexpense 319 51 617 319 (benefit)Net income $ 6,348 $ (8,302 ) $ 8,842 $ (8,869 )(loss) Income (loss)per common share:Basic $ 0.13 $ (0.17 ) $ 0.18 $ (0.18 )Diluted $ 0.12 $ (0.17 ) $ 0.17 $ (0.18 ) Weightedaverage number of shares:Basic 48,743 48,109 48,758 48,147 Diluted 53,942 48,109 53,539 48,147

Veeco InstrumentsInc. and SubsidiariesCondensed Consolidated Balance Sheets(in thousands) June30, December31, 2021 2020 (unaudited) Assets Current assets: Cash and cash equivalents $ 114,747 $ 129,625Restricted cash 640 658Short-term investments 214,635 189,771Accounts receivable, net 108,312 79,991Contract assets 14,084 21,246Inventories 164,041 145,906Deferred cost of sales 595 433Prepaid expenses and other current assets 21,570 19,301Total current assets 638,624 586,931Property, plant and equipment, net 82,208 65,271Operating lease right-of-use assets 27,768 10,275Intangible assets, net 39,855 46,185Goodwill 181,943 181,943Deferred income taxes 1,440 1,440Other assets 3,671 6,019Total assets $ 975,509 $ 898,064 Liabilities and stockholders? equity Current liabilities: Accounts payable $ 55,045 $ 33,656Accrued expenses and other current 52,436 44,876liabilitiesCustomer deposits and deferred revenue 70,569 67,235Income taxes payable 1,363 914Total current liabilities 179,413 146,681Deferred income taxes 5,257 5,240Long-term debt 328,215 321,115Long-term operating lease liabilities 31,036 6,305Other liabilities 7,853 10,349Total liabilities 551,774 489,690 Total stockholders? equity 423,735 408,374 Total liabilities and stockholders? equity $ 975,509 $ 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 June30,2021Net sales $ 146,344 $ 146,344 Gross 60,166 650 31 60,847 profitGross 41.1 % 41.6 %marginOperating 46,914 (3,717 ) (2,976 ) (671 ) 39,550 expensesOperatingincome 13,252 4,367 2,976 702 ^ 21,297 (loss)Netincome 6,348 4,367 2,976 4,214 ^ 17,905 (loss) Income(loss)per commonshare:Basic $ 0.13 $ 0.37 Diluted 0.12 0.35 Weightedaverage number ofshares:Basic 48,743 48,743 Diluted ^ 53,942 51,772 (1)

__________________^ - See table below for additional details. - 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(1) 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.



Veeco InstrumentsInc. and SubsidiariesOther Non-GAAP Adjustments(in thousands)(unaudited) Three months ended June30, 2021 Transition expenses related to San Jose expansion project $ 609 Depreciation of PP&E fair value step-up associated with the 93 Ultratech purchase accountingSubtotal 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.

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 June30,2020Net 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 Net Income (loss) to Non-GAAP Operating Income (loss)(in thousands)(unaudited) Three Three months months ended ended June30, June30, 2021 2020GAAP Net income (loss) $ 6,348 $ (8,302 )Share-based compensation 4,367 2,974 Amortization 2,976 3,834 Restructuring ? 472 Asset impairment ? 281 Transition expenses related to San Jose 609 ? expansion projectDepreciation of PP&E fair value step-upassociated with the Ultratech purchase 93 60 accountingInterest (income) expense, net 6,585 5,614 Loss on extinguishment of debt ? 3,046 Income tax expense (benefit) 319 51 Non-GAAP Operating income (loss) $ 21,297 $ 8,030

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-GAAP30, 2021Net sales $ 135 - $ 155 $ 135 - $ 155 Gross 55 - 67 1 ? ? 56 - 68 profitGross 41 % - 43 % 41 % - 43 %marginOperating 47 - 49 (3 ) (3 ) (1 ) 40 - 42 expensesOperatingincome 8 - 18 4 3 1 16 - 26 (loss)Netincome $ 1 - $ 11 4 3 5 $ 13 - $ 23 (loss) Income(loss)per $ 0.02 - $ 0.20 $ 0.25 - $ 0.44 dilutedcommonshareWeightedaveragenumber of 54 54 52 52 shares ^(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(1) 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.

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, 2021GAAP Net income (loss) $ 1 - $ 11Share-based compensation 4 - 4Amortization 3 - 3Interest expense, net 7 - 7Other 1 - 1Non-GAAP Operating income (loss) $ 16 - $ 26

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.