PLAINVIEW, NY--(Marketwired - November 01, 2016) - Veeco Instruments Inc. (
Third Quarter 2016 Results Summary:
- Recognized revenue of $85.5 million
- GAAP net loss per share of $1.78, includes pre-tax restructuring and asset impairment charges of $57.8 million
- Narrowed non-GAAP net loss per share to $0.05
- Achieved positive non-GAAP adjusted EBITDA of $2.9 million
- Generated $7 million in cash from operations
Veeco Instruments Inc. (
| U.S. dollars in millions, except per share data | ||||
| GAAP Results | Q3 '16 | Q3 '15 | ||
| Revenue | $85.5 | $140.7 | ||
| Net income (loss) | ($69.6) | $5.3 | ||
| Diluted earnings (loss) per share | ($1.78) | $0.13 | ||
| Non-GAAP Results | Q3 '16 | Q3 '15 | ||
| Adjusted net income (loss) | ($1.8) | $13.6 | ||
| Adjusted EBITDA | $2.9 | $21.8 | ||
| Adjusted diluted earnings (loss) per share | ($0.05) | $0.33 | ||
"Veeco executed well in the third quarter, delivering revenue above the top end of our guidance range and generating positive adjusted EBITDA and cash flows from operations," commented John R. Peeler, Chairman and Chief Executive Officer. "We are seeing a clear improvement in LED industry conditions and solid demand for our MOCVD products. We continue to win LED lighting and display opportunities with our TurboDisc® EPIK™700 Metal Organic Chemical Vapor Deposition ("MOCVD") system and expand our positions in red, orange and yellow LEDs with our TurboDisc® K475i™ Arsenic Phosphide ("As/P") system.
"We remain focused on improving the Company's through-cycle profitability. We are executing against our cost reduction initiatives, including our recently announced plans to significantly reduce investments in Atomic Layer Deposition ("ALD") technology development. These actions are expected to lower our quarterly adjusted EBITDA breakeven level to approximately $75 million in revenue, starting in the first quarter of 2017. Overall, I'm pleased with our ongoing execution and the positive momentum of our business looking ahead," Mr. Peeler concluded.
In the third quarter, the company recorded total asset impairment and restructuring charges of $57.8 million. Of these charges, the vast majority were non-cash relating to an intangible ALD asset impairment and $1.8 million were restructuring charges requiring cash.
Page 2/Q3 2016 Earnings Results Press Release
Guidance and Outlook
The following guidance is provided for Veeco's fourth quarter 2016:
- Revenue is expected to be in the range of $85 million to $100 million
- GAAP Gross Margin is expected to be in the range of 37% to 39% and non-GAAP Gross Margin is expected to be in the range of 38% to 40%
- GAAP Net Income (loss) is expected to be in the range of ($13) million to ($7) million and non-GAAP Net Income (loss) is expected to be in the range of ($3) million to $3 million
- GAAP earnings (loss) per share is expected to be in the range of ($0.34) to ($0.19) and non-GAAP earnings (loss) per share is expected to be in the range of ($0.07) to $0.07
- Adjusted EBITDA is expected to be between $0 and $6 million
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, November 1, 2016 starting at 5:00pm ET. To join the call, dial 1-888-430-8709 (toll free) or 1-719-325-2448 and use passcode 6493222. The call will also be webcast live on the Veeco website at ir.veeco.com. A replay of the webcast will be made available on the Veeco website beginning at 8:00pm ET this evening. We will post an accompanying slide presentation to our website prior to the beginning of the call.
About Veeco
Veeco's process equipment solutions enable the manufacture of LEDs, displays, power electronics, compound semiconductors, hard disk drives, semiconductors, MEMS and wireless chips. We are the leader in MOCVD, MBE, Ion Beam, Wet Etch single wafer processing and other advanced thin film process technologies. Our high performance systems drive innovation in energy efficiency, consumer electronics and network storage and allow our customers to maximize productivity and achieve lower cost of ownership. For information on our company, products and worldwide service and support, please visit www.veeco.com.
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, 2015 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.
| Condensed Consolidated Statements of Operations | ||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Net sales | $ | 85,482 | $ | 140,744 | $ | 238,842 | $ | 370,494 | ||||||||
| Cost of sales | 52,027 | 86,494 | 141,991 | 232,038 | ||||||||||||
| Gross profit | 33,455 | 54,250 | 96,851 | 138,456 | ||||||||||||
| Operating expenses, net: | ||||||||||||||||
| Research and development | 19,892 | 19,200 | 63,545 | 57,904 | ||||||||||||
| Selling, general, and administrative | 18,396 | 21,905 | 58,230 | 69,153 | ||||||||||||
| Amortization of intangible assets | 5,261 | 5,891 | 15,785 | 21,832 | ||||||||||||
| Restructuring | 1,798 | 469 | 3,993 | 3,509 | ||||||||||||
| Asset impairment | 56,035 | - | 69,662 | 126 | ||||||||||||
| Other, net | 795 | 207 | 884 | (795 | ) | |||||||||||
| Total operating expenses, net | 102,177 | 47,672 | 212,099 | 151,729 | ||||||||||||
| Operating income (loss) | (68,722 | ) | 6,578 | (115,248 | ) | (13,273 | ) | |||||||||
| Interest income, net | 260 | 161 | 713 | 442 | ||||||||||||
| Income (loss) before income taxes | (68,462 | ) | 6,739 | (114,535 | ) | (12,831 | ) | |||||||||
| Income tax expense | 1,136 | 1,433 | 2,677 | 9,360 | ||||||||||||
| Net income (loss) | $ | (69,598 | ) | $ | 5,306 | $ | (117,212 | ) | $ | (22,191 | ) | |||||
| Income (loss) per common share: | ||||||||||||||||
| Basic | $ | (1.78 | ) | $ | 0.13 | $ | (2.99 | ) | $ | (0.56 | ) | |||||
| Diluted | $ | (1.78 | ) | $ | 0.13 | $ | (2.99 | ) | $ | (0.56 | ) | |||||
| Weighted average number of shares: | ||||||||||||||||
| Basic | 39,131 | 40,846 | 39,193 | 39,729 | ||||||||||||
| Diluted | 39,131 | 40,979 | 39,193 | 39,729 | ||||||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (in thousands) | ||||||||
| (unaudited) | ||||||||
| September 30, 2016 | December 31, 2015 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 274,018 | $ | 269,232 | ||||
| Short-term investments | 62,835 | 116,050 | ||||||
| Accounts receivable, net | 50,463 | 49,524 | ||||||
| Inventories | 86,651 | 77,469 | ||||||
| Deferred cost of sales | 3,165 | 2,100 | ||||||
| Prepaid expenses and other current assets | 19,099 | 22,760 | ||||||
| Assets held for sale | 12,129 | 5,000 | ||||||
| Total current assets | 508,360 | 542,135 | ||||||
| Property, plant and equipment, net | 57,557 | 79,590 | ||||||
| Intangible assets, net | 61,812 | 131,674 | ||||||
| Goodwill | 114,908 | 114,908 | ||||||
| Deferred income taxes | 1,384 | 1,384 | ||||||
| Other assets | 21,047 | 21,098 | ||||||
| Total assets | $ | 765,068 | $ | 890,789 | ||||
| Liabilities and stockholders' equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 27,455 | $ | 30,074 | ||||
| Accrued expenses and other current liabilities | 38,421 | 49,393 | ||||||
| Customer deposits and deferred revenue | 79,699 | 76,216 | ||||||
| Income taxes payable | 1,825 | 6,208 | ||||||
| Current portion of long-term debt | 361 | 340 | ||||||
| Total current liabilities | 147,761 | 162,231 | ||||||
| Deferred income taxes | 13,146 | 11,211 | ||||||
| Long-term debt | 920 | 1,193 | ||||||
| Other liabilities | 6,503 | 1,539 | ||||||
| Total liabilities | 168,330 | 176,174 | ||||||
| Total stockholders' equity | 596,738 | 714,615 | ||||||
| Total liabilities and stockholders' equity | $ | 765,068 | $ | 890,789 | ||||
| Reconciliation of GAAP to Non-GAAP Financial Data | |||||||||||||||||
| (in thousands, except per share amounts) | |||||||||||||||||
| (unaudited) | |||||||||||||||||
| Non-GAAP Adjustments | |||||||||||||||||
| Three months ended September 30, 2016 | GAAP | Share-based Compensation | Amortization | Other | Non-GAAP | ||||||||||||
| Net sales | $ | 85,482 | $ | 85,482 | |||||||||||||
| Gross profit | 33,455 | 607 | 355 | 34,417 | |||||||||||||
| Gross margin | 39.1% | 40.3% | |||||||||||||||
| Research and development | 19,892 | (993 | ) | 18,899 | |||||||||||||
| Selling, general, and administrative and Other | 19,191 | (2,143 | ) | (1,368 | ) | 15,680 | |||||||||||
| Net income (loss) | (69,598 | ) | 3,743 | 5,261 | 58,831 | (1,763 | ) | ||||||||||
| Income (loss) per common share: | |||||||||||||||||
| Basic | $ | (1.78 | ) | $ | (0.05 | ) | |||||||||||
| Diluted | (1.78 | ) | (0.05 | ) | |||||||||||||
| Weighted average number of shares: | |||||||||||||||||
| Basic | 39,131 | 39,131 | |||||||||||||||
| Diluted | 39,131 | 39,131 | |||||||||||||||
| Veeco Instruments Inc. and Subsidiaries | |||||
| Other Non-GAAP Adjustments | |||||
| (in thousands) | |||||
| (unaudited) | |||||
| Three months ended September 30, 2016 | |||||
| Asset impairment | 56,035 | ||||
| Restructuring | 1,798 | ||||
| Acquisition related | 63 | ||||
| Accelerated depreciation | 355 | ||||
| Pension termination | 1,305 | ||||
| Non-GAAP tax adjustment * | (725 | ) | |||
| Total Other | 58,831 | ||||
| * - 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 incremental transaction-related compensation. | |||||
| 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 adjusted EBITDA, 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. | |||||
| Reconciliation of GAAP to Non-GAAP Financial Data | |||||||||||||||
| (in thousands, except per share amounts) | |||||||||||||||
| (unaudited) | |||||||||||||||
| Non-GAAP Adjustments | |||||||||||||||
| Three months September 30, 2015 | GAAP | Share-based Compensation | Amortization | Other | Non-GAAP | ||||||||||
| Net sales | $ | 140,744 | $ | 140,744 | |||||||||||
| Gross profit | 54,250 | 787 | 55,037 | ||||||||||||
| Gross margin | 38.5% | 39.1% | |||||||||||||
| Research and development | 19,200 | (1,044 | ) | 18,156 | |||||||||||
| Selling, general, and administrative and Other | 22,112 | (3,288 | ) | (188 | ) | 18,636 | |||||||||
| Net income (loss) | 5,306 | 5,119 | 5,891 | (2,675 | ) | 13,641 | |||||||||
| Income (loss) per common share: | |||||||||||||||
| Basic | $ | 0.13 | $ | 0.33 | |||||||||||
| Diluted | 0.13 | 0.33 | |||||||||||||
| Weighted average number of shares: | |||||||||||||||
| Basic | 40,846 | 40,846 | |||||||||||||
| Diluted | 40,979 | 40,979 | |||||||||||||
| Veeco Instruments Inc. and Subsidiaries | |||||
| Other Non-GAAP Adjustments | |||||
| (in thousands) | |||||
| (unaudited) | |||||
| Three months September 30, 2015 | |||||
| Restructuring | 469 | ||||
| Acquisition related | 188 | ||||
| One-time legal settlement | 395 | ||||
| Non-GAAP tax adjustment * | (3,727 | ) | |||
| Total Other | (2,675 | ) | |||
| * - 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 incremental transaction-related compensation. | |||||
| 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 adjusted EBITDA, 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. | |||||
| Reconciliation of GAAP Net Income (loss) to Adjusted EBITDA | ||||||||
| (in thousands) | ||||||||
| (unaudited) | ||||||||
| Three months ended September 30, | ||||||||
| 2016 | 2015 | |||||||
| GAAP Net income (loss) | $ | (69,598 | ) | $ | 5,306 | |||
| Share-based compensation | 3,743 | 5,119 | ||||||
| Amortization | 5,261 | 5,891 | ||||||
| Asset impairment | 56,035 | - | ||||||
| Restructuring | 1,798 | 469 | ||||||
| Acquisition related | 63 | 188 | ||||||
| One-time legal settlement | - | 395 | ||||||
| Accelerated depreciation | 355 | - | ||||||
| Pension termination | 1,305 | - | ||||||
| Interest income | (260 | ) | (161 | ) | ||||
| Depreciation | 3,104 | 3,151 | ||||||
| Income tax expense (benefit) | 1,136 | 1,433 | ||||||
| Adjusted EBITDA | $ | 2,942 | $ | 21,791 | ||||
| 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 incremental transaction-related compensation. | ||||||||
| 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 adjusted EBITDA, 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 millions, except per share amounts) | |||||||||||||||
| (unaudited) | |||||||||||||||
| Non-GAAP Adjustments | |||||||||||||||
| Guidance for the three months ended December 31, 2016 | GAAP | Share-based Compensation | Amortization | Other | Non-GAAP | ||||||||||
| Net sales | $ 85 | - | $ 100 | $ 85 | - | $ 100 | |||||||||
| Gross profit | 31 | - | 39 | 1 | - | - | 32 | - | 40 | ||||||
| Gross margin | 37% | - | 39% | 38% | - | 40% | |||||||||
| Net income (loss) | $(13) | - | $(7) | 5 | 4 | 1 | (3) | - | 3 | ||||||
| Income (loss) per diluted common share | $(0.34) | - | $(0.19) | $(0.07) | - | $0.07 | |||||||||
| Weighted average number of shares | 39 | 39 | 39 | 40 | |||||||||||
| Veeco Instruments Inc. and Subsidiaries | |||||||
| Reconciliation of GAAP Net Income (loss) to Adjusted EBITDA | |||||||
| (in millions) | |||||||
| (unaudited) | |||||||
| Guidance for the three months ended December 31, 2016 | |||||||
| GAAP Net income (loss) | $ | (13 | ) | - | $ | (7 | ) |
| Share-based compensation | 5 | - | 5 | ||||
| Amortization | 4 | - | 4 | ||||
| Restructuring | 1 | - | 1 | ||||
| Interest (income) expense | 0 | - | 0 | ||||
| Depreciation | 3 | - | 3 | ||||
| Income tax expense (benefit) * | 0 | - | 0 | ||||
| Adjusted EBITDA | $ | 0 | - | $ | 6 | ||
| Note: Amounts may not calculate precisely due to rounding. | |||||||
| * - 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 incremental transaction-related compensation. | |||||||
| 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 adjusted EBITDA, 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. | |||||||
Contact Information:
Veeco Contacts:
Investors:
Shanye Hudson
516-677-0200 x1272
shudson@veeco.com
Media:
Jeffrey Pina
516-677-0200 x1222
jpina@veeco.com