Third Quarter 2023 Highlights:
Revenue of $177.4 million, compared with $171.9 million in the same period last yearGAAP net income of $24.6 million, or $0.42 per diluted share, compared with $15.0 million, or $0.27 per diluted share in the same period last yearNon-GAAP net income of $31.0 million, or $0.53 per diluted share, compared with $26.0 million, or $0.45 per diluted share in the same period last year
PLAINVIEW, N.Y., Nov. 06, 2023 (GLOBE NEWSWIRE) — Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its third quarter ended September 30, 2023. 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 Q3 ’23 Q3 ’22Revenue $177.4 $171.9 Net income $24.6 $15.0 Diluted earnings per share $0.42 $0.27 Non-GAAP Results Q3 ’23 Q3 ’22Operating income $32.7 $28.4 Net income $31.0 $26.0 Diluted earnings per share $0.53 $0.45
“Veeco reported another quarter of strong top and bottom-line results, both above the high-end of our guidance,” commented Bill Miller, Ph.D., Veeco’s Chief Executive Officer. “In addition, our strategic initiative to grow in the Semiconductor market continues to gain traction. Veeco had several key business wins during the quarter, and we recently shipped our first Nanosecond Annealing system to a Tier 1 logic customer for evaluation. We view this as an important milestone in expanding laser annealing into a broad range of new Semiconductor applications.”
Guidance and Outlook
The following guidance is provided for Veeco’s fourth quarter 2023:
Revenue is expected in the range of $155 million to $175 millionGAAP diluted earnings per share are expected in the range of $0.22 to $0.33Non-GAAP diluted earnings per share are expected in the range of $0.35 to $0.45
Conference Call Information
A conference call reviewing these results has been scheduled for today, November 6, 2023 starting at 5:00pm ET. To join the call, dial 1-877-407-8029 (toll-free) or 1-201-689-8029. 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 laser annealing, ion beam, chemical vapor deposition (CVD), metal organic chemical vapor deposition (MOCVD), single wafer etch & clean and lithography 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
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 management’s 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, 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; 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; the effects of regional or global health epidemics, including the effects of the COVID-19 pandemic on the Company’s operations and on those of our customers and suppliers; 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 management’s 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 Instruments Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited) Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Net sales$177,366 $171,913 $492,511 $492,338 Cost of sales 100,489 101,962 286,107 292,109 Gross profit 76,877 69,951 206,404 200,229 Operating expenses, net: Research and development 28,817 27,104 83,762 77,237 Selling, general, and administrative 22,814 22,144 69,263 67,987 Amortization of intangible assets 2,123 2,505 6,358 7,514 Other operating expense (income), net 860 634 1,264 587 Total operating expenses, net 54,614 52,387 160,647 153,325 Operating income 22,263 17,564 45,757 46,904 Interest expense, net 247 (2,315) (1,187) (7,753)Other income (expense), net — — (97,091) — Income (loss) before income taxes 22,510 15,249 (52,521) 39,151 Income tax expense (benefit) (2,064) 208 (516) 1,125 Net income (loss)$24,574 $15,041 $(52,005) $38,026 Income (loss) per common share: Basic$0.44 $0.30 $(0.98) $0.76 Diluted$0.42 $0.27 $(0.98) $0.70 Weighted average number of shares: Basic 55,352 49,887 52,978 49,831 Diluted 59,636 65,151 52,978 65,090 Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands) September 30, December 31, 2023 2022 (unaudited) Assets Current assets: Cash and cash equivalents$156,419 $154,925 Restricted cash 378 547 Short-term investments 130,117 147,488 Accounts receivable, net 122,393 124,221 Contract assets 29,475 16,507 Inventories 252,120 206,908 Prepaid expenses and other current assets 29,898 18,305 Total current assets 720,800 668,901 Property, plant and equipment, net 118,213 107,281 Operating lease right-of-use assets 24,960 26,467 Intangible assets, net 46,069 23,887 Goodwill 214,964 181,943 Deferred income taxes 118,069 116,349 Other assets 3,158 3,355 Total assets$1,246,233 $1,128,183 Liabilities and stockholders’ equity Current liabilities: Accounts payable$62,985 $52,049 Accrued expenses and other current liabilities 65,599 56,031 Customer deposits and deferred revenue 138,723 127,223 Income taxes payable 479 2,432 Current portion of long-term debt — 20,169 Total current liabilities 267,786 257,904 Deferred income taxes 6,865 1,285 Long-term debt 274,646 254,491 Long-term operating lease liabilities 32,154 33,581 Other liabilities 20,302 3,098 Total liabilities 601,753 550,359 Total stockholders’ equity 644,480 577,824 Total liabilities and stockholders’ equity$1,246,233 $1,128,183
Note on Reconciliation Tables
The below 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.
Reconciliation of GAAP to Non-GAAP Financial Data (Q3 2023)
(in thousands)
(unaudited) Non-GAAP Adjustments Share-Based Three months ended September 30, 2023 GAAP Compensation Amortization Other Non-GAAP Net sales $177,366 $177,366 Gross profit 76,877 1,556 78,433 Gross margin 43.3% 44.2%Operating expenses 54,614 (5,864) (2,123) (911) 45,716 Operating income 22,263 7,420 2,123 911 ^ 32,717 Net income 24,574 7,420 2,123 (3,077)^ 31,040
^ – See table below for additional details.
Other Non-GAAP Adjustments (Q3 2023)
(in thousands)
(unaudited) Three months ended September 30, 2023 Changes in contingent consideration$818 Acquisition related 93 Subtotal 911 Non-cash interest expense 311 Non-GAAP tax adjustment * (4,299)Total Other$(3,077)
* – The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.
Net Income per Common Share (Q3 2023)
(in thousands, except per share amounts)
(unaudited) Three months ended September 30, 2023 GAAP Non-GAAPNumerator: Net income$24,574 $31,040 Interest expense associated with 2025 and 2027 Convertible Senior Notes 513 466 Net income available to common shareholders$25,087 $31,506 Denominator: Basic weighted average shares outstanding 55,352 55,352 Effect of potentially dilutive share-based awards 1,391 1,391 Dilutive effect of 2025 Convertible Senior Notes 1,104 1,104 Dilutive effect of 2027 Convertible Senior Notes(1) 1,789 1,355 Diluted weighted average shares outstanding 59,636 59,202 Net income per common share: Basic$0.44 $0.56 Diluted$0.42 $0.53
(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, an effective conversion price of $18.46 is used when determining incremental shares to add to the dilutive share count. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, an effective conversion price of $13.98 is used when determining incremental shares to add to the dilutive share count.
Reconciliation of GAAP to Non-GAAP Financial Data (Q3 2022)
(in thousands, except per share amounts)
(unaudited) Non-GAAP Adjustments Share-based Three months ended September 30, 2022 GAAP Compensation Amortization Other Non-GAAP Net sales $171,913 $171,913 Gross profit 69,951 1,195 1,102 72,248 Gross margin 40.7% 42.0%Operating expenses 52,387 (5,015) (2,505) (981) 43,886 Operating income 17,564 6,210 2,505 2,083^ 28,362 Net income 15,041 6,210 2,505 2,252^ 26,008
^ – See table below for additional details.
Other Non-GAAP Adjustments (Q3 2022)
(in thousands)
(unaudited) Three months ended September 30, 2022 Transition expenses related to San Jose expansion project$1,936 Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 147 Subtotal 2,083 Non-cash interest expense 242 Non-GAAP tax adjustment * (73)Total Other$2,252
* – The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.
Net Income per Common Share (Q3 2022)
(in thousands, except per share amounts)
(unaudited) Three months ended September 30, 2022 GAAP Non-GAAPNumerator: Net income$15,041 $26,008 Interest expense associated with convertible notes 2,549 2,467 Net income available to common shareholders$17,590 $28,475 Denominator: Basic weighted average shares outstanding 49,887 49,887 Effect of potentially dilutive share-based awards 801 801 Dilutive effect of 2023 Convertible Senior Notes — 504 Dilutive effect of 2025 Convertible Senior Notes 5,521 5,521 Dilutive effect of 2027 Convertible Senior Notes(1) 8,942 6,771 Diluted weighted average shares outstanding 65,151 63,484 Net income per common share: Basic$0.30 $0.52 Diluted$0.27 $0.45
(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, an effective conversion price of $18.46 is used when determining incremental shares to add to the dilutive share count. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, an effective conversion price of $13.98 is used when determining incremental shares to add to the dilutive share count.
Reconciliation of GAAP Net Income to Non-GAAP Operating Income (Q3 2023 and 2022)
(in thousands)
(unaudited) Three months ended Three months ended September 30, 2023 September 30, 2022GAAP Net income$24,574 $15,041 Share-based compensation 7,420 6,210 Amortization 2,123 2,505 Transition expenses related to San Jose expansion project — 1,936 Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting — 147 Changes in contingent consideration 818 — Acquisition related 93 — Interest (income) expense, net (247) 2,315 Income tax expense (benefit) (2,064) 208 Non-GAAP Operating income$32,717 $28,362 Reconciliation of GAAP to Non-GAAP Financial Data (Q4 2023)
(in millions, except per share amounts)
(unaudited) Non-GAAP Adjustments Guidance for the three months ending Share-based December 31, 2023 GAAP Compensation Amortization Other Non-GAAPNet sales $155 – $175 $155 – $175 Gross profit 66 – 76 1 — — 67 – 77 Gross margin 42% – 43% 43% – 44%Operating expenses 53 – 55 (6) (2) — 45 – 47 Operating income 14 – 21 7 2 — 23 – 30 Net income $13 – $20 7 2 (2) $20 – $27 Income per diluted common share $0.22 – $0.33 $0.35 – $0.45 Income per Diluted Common Share (Q4 2023)
(in millions, except per share amounts)
(unaudited) Guidance for the three months ending December 31, 2023 GAAP Non-GAAPNumerator: Net income $13 – $20 $20 – $27Interest expense associated with convertible notes — — — —Net income available to common shareholders $13 – $20 $20 – $27 Denominator: Basic weighted average shares outstanding 56 56 56 56Effect of potentially dilutive share-based awards 1 1 1 1Dilutive effect of 2025 Convertible Senior Notes — 1 1 1Dilutive effect of 2027 Convertible Senior Notes(1) 2 2 1 1Diluted weighted average shares outstanding 59 60 60 60 Net income per common share: Income per diluted common share $0.22 – $0.33 $0.35 – $0.45
(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, an effective conversion price of $18.46 is used when determining incremental shares to add to the dilutive share count. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, an effective conversion price of $13.98 is used when determining incremental shares to add to the dilutive share count.
Reconciliation of GAAP Net Income to Non-GAAP Operating Income (Q4 2023)
(in millions)
(unaudited) Guidance for the three months ending December 31, 2023 GAAP Net income $13 – $20Share-based compensation 7 – 7Amortization 2 – 2Income tax expense (benefit) 1 – 1Non-GAAP Operating income $23 – $30
Note: Amounts may not calculate precisely due to rounding.