• Veeco Reports Fourth Quarter and Fiscal Year 2023 Financial Results

    Source: Nasdaq GlobeNewswire / 14 Feb 2024 15:05:00   America/Chicago

    Fourth Quarter 2023 Highlights:

    • Revenue of $173.9 million, compared with $153.8 million in the same period last year
    • GAAP net income of $21.6 million, or $0.37 per diluted share, compared with $128.9 million, or $2.00 per diluted share in the same period last year
    • Non-GAAP net income of $29.8 million, or $0.51 per diluted share, compared with $21.9 million, or $0.38 per diluted share in the same period last year

    Fiscal Year 2023 Highlights:

    • Revenue of $666.4 million, compared with $646.1 million in the same period last year
    • GAAP net loss of $30.4 million, or $0.56 loss per diluted share, included a $97.1 million loss related to debt refinancing, compared with net income of $166.9 million, or $2.71 earnings per diluted share in the same period last year
    • Non-GAAP net income of $98.3 million, or $1.69 per diluted share, compared with $89.6 million, or $1.57 per diluted share in the same period last year

    PLAINVIEW, N.Y., Feb. 14, 2024 (GLOBE NEWSWIRE) -- Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its fourth quarter and fiscal year ended December 31, 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


                 
      4th Quarter Full Year
    GAAP Results Q4 '23 Q4 '22 2023   2022
    Revenue $173.9 $153.8 $666.4  $646.1
    Net income (loss) $21.6 $128.9 $(30.4) $166.9
    Diluted earnings (loss) per share $0.37 $2.00 $(0.56) $2.71


                 
      4th Quarter Full Year
    Non-GAAP Results Q4 '23 Q4 '22 2023 2022
    Operating income $32.1 $23.8 $109.6 $99.8
    Net income $29.8 $21.9 $98.3 $89.6
    Diluted earnings per share $0.51 $0.38 $1.69 $1.57

    “2023 was a critical year for Veeco, highlighted by our Semiconductor business outperforming WFE growth for the 3rd consecutive year,” commented Bill Miller, Ph.D., Veeco’s Chief Executive Officer. “I’m proud to say we successfully grew the business, improved profitability, and most importantly, laid the groundwork for future growth. We achieved a significant milestone by shipping evaluation systems for two important core technologies in Nanosecond Annealing and Ion Beam Deposition. These technologies enable our customers to fabricate devices that enable higher performance and reduced power consumption.”

    Guidance and Outlook

    The following guidance is provided for Veeco’s first quarter 2024:

    • Revenue is expected in the range of $160 million to $180 million
    • GAAP diluted earnings per share are expected in the range of $0.22 to $0.33
    • Non-GAAP diluted earnings per share are expected in the range of $0.36 to $0.46

    Conference Call Information

    A conference call reviewing these results has been scheduled for today, February 14, 2024 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 Contacts:

    Investors:Anthony Pappone(516) 500-8798 apappone@veeco.com
    Media:Kevin Long  (516) 714-3978  klong@veeco.com 

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

      Three months ended December 31,  Year ended December 31,
         2023    2022    2023    2022
    Net sales $173,924  $153,799  $666,435  $646,137 
    Cost of sales  95,269   90,881   381,376   382,989 
    Gross profit  78,655   62,918   285,059   263,148 
    Operating expenses, net:            
    Research and development  29,091   26,327   112,853   103,565 
    Selling, general, and administrative  23,493   20,965   92,756   88,952 
    Amortization of intangible assets  2,123   2,505   8,481   10,018 
    Other operating expense (income), net  (235)  (271)  1,029   317 
    Total operating expenses, net  54,472   49,526   215,119   202,852 
    Operating income  24,183   13,392   69,940   60,296 
    Interest expense, net     (1,558)  (1,187)  (9,311)
    Other income (expense), net        (97,091)   
    Income (loss) before income taxes  24,183   11,834   (28,338)  50,985 
    Income tax expense (benefit)  2,546   (117,081)  2,030   (115,957)
    Net income (loss) $21,637  $128,915  $(30,368) $166,942 
                 
    Income (loss) per common share:            
    Basic $0.39  $2.58  $(0.56) $3.35 
    Diluted $0.37  $2.00  $(0.56) $2.71 
                 
    Weighted average number of shares:            
    Basic  55,537   49,912   53,769   49,906 
    Diluted  59,821   65,684   53,769   65,607 
                     

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

      December 31,  December 31,
         2023    2022
      (unaudited)   
    Assets      
    Current assets:      
    Cash and cash equivalents $158,781 $154,925
    Restricted cash  339  547
    Short-term investments  146,664  147,488
    Accounts receivable, net  103,018  124,221
    Contract assets  24,370  16,507
    Inventories  237,635  206,908
    Prepaid expenses and other current assets  35,471  18,305
    Total current assets  706,278  668,901
    Property, plant and equipment, net  118,459  107,281
    Operating lease right-of-use assets  24,377  26,467
    Intangible assets, net  43,945  23,887
    Goodwill  214,964  181,943
    Deferred income taxes  117,901  116,349
    Other assets  3,117  3,355
    Total assets $1,229,041 $1,128,183
           
    Liabilities and stockholders’ equity      
    Current liabilities:      
    Accounts payable $42,383 $52,049
    Accrued expenses and other current liabilities  57,624  56,031
    Contract liabilities  118,026  127,223
    Income taxes payable    2,432
    Current portion of long-term debt    20,169
    Total current liabilities  218,033  257,904
    Deferred income taxes  6,552  1,285
    Long-term debt  274,941  254,491
    Long-term operating lease liabilities  31,529  33,581
    Other liabilities  25,544  3,098
    Total liabilities  556,599  550,359
           
    Total stockholders’ equity  672,442  577,824
    Total liabilities and stockholders’ equity $1,229,041 $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 (Q4 2023)
    (in thousands)
    (unaudited)

                    
          Non-GAAP Adjustments     
          Share-Based         
    Three months ended December 31, 2023    GAAP     Compensation    Amortization    Other     Non-GAAP 
    Net sales $173,924         $173,924 
    Gross profit  78,655  334        78,989 
    Gross margin  45.2%         45.4%
    Operating expenses  54,472  (5,845) (2,123) 363    46,867 
    Operating income  24,183  6,179  2,123  (363)^  32,122 
    Net income  21,637  6,179  2,123  (116)^  29,823 
                       
    ^   - See table below for additional details.                  
                       

    Other Non-GAAP Adjustments (Q4 2023)
    (in thousands)
    (unaudited)

    Three months ended December 31, 2023
         
    Changes in contingent consideration $(465)
    Other  102 
    Subtotal  (363)
    Non-cash interest expense  294 
    Non-GAAP tax adjustment *  (47)
    Total Other $(116)
         
    *   - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.
         

    Net Income per Common Share (Q4 2023)
    (in thousands, except per share amounts)
    (unaudited)

           
      Three months ended December 31, 2023
      GAAP Non-GAAP
    Numerator:     
    Net income$21,637    $29,823
    Interest expense associated with 2025 and 2027 Convertible Senior Notes 511  466
    Net income available to common shareholders$22,148 $30,289
           
    Denominator:     
    Basic weighted average shares outstanding 55,537  55,537
    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 59,821  59,387
           
    Net income per common share:     
    Basic $0.39 $0.54
    Diluted $0.37 $0.51
           
    (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 (Q4 2022)
    (in thousands, except per share amounts)
    (unaudited)

          Non-GAAP Adjustments     
          Share-based        
    Three months ended December 31, 2022     GAAP     Compensation    Amortization    Other     Non-GAAP 
    Net sales $153,799         $153,799 
    Gross profit  62,918  1,167    1,011    65,096 
    Gross margin  40.9%           42.3%
    Operating expenses  49,526  (4,858) (2,505) (821)   41,342 
    Operating income  13,392  6,025  2,505  1,832 ^  23,754 
    Net income  128,915  6,025  2,505  (115,554)^  21,891 
                    
    ^   - See table below for additional details.               
                    

     Other Non-GAAP Adjustments (Q4 2022)
    (in thousands)
    (unaudited)

    Three months ended December 31, 2022  
    Transition expenses related to San Jose expansion project$1,788 
    Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 44 
    Subtotal 1,832 
    Non-cash interest expense 244 
    Release of valuation allowance on deferred tax assets (104,971)
    Non-GAAP tax adjustment * (12,659)
    Total Other$(115,554)
         
    *   - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.
         

    Net Income per Common Share (Q4 2022)
    (in thousands, except per share amounts)
    (unaudited)

      Three months ended December 31, 2022
      GAAP Non-GAAP
    Numerator:     
    Net income$128,915    $21,891
    Interest expense associated with convertible notes 2,712  2,467
    Net income available to common shareholders$131,627 $24,358
           
    Denominator:     
    Basic weighted average shares outstanding 49,912  49,912
    Effect of potentially dilutive share-based awards 805  805
    Dilutive effect of 2023 Convertible Senior Notes 504  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 65,684  63,513
           
    Net income per common share:     
    Basic$2.58 $0.44
    Diluted$2.00 $0.38
           
    (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 and 2022)
    (in thousands)
    (unaudited)

           
         Three months ended     Three months ended
      December 31, 2023 December 31, 2022
    GAAP Net income $21,637  $128,915 
    Share-based compensation  6,179   6,025 
    Amortization  2,123   2,505 
    Transition expenses related to San Jose expansion project  57   1,788 
    Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting     44 
    Changes in contingent consideration  (465)   
    Acquisition related  45    
    Interest (income) expense, net     1,558 
    Income tax expense (benefit)  2,546   (117,081)
    Non-GAAP Operating income $32,122  $23,754 
             

    Reconciliation of GAAP to Non-GAAP Financial Data (FY 2023)
    (in thousands)
    (unaudited)

          Non-GAAP Adjustments     
          Share-based        
    For the year ended December 31, 2023     GAAP     Compensation    Amortization    Other     Non-GAAP 
    Net sales $666,435          $666,435 
    Gross profit  285,059   4,913    232    290,204 
    Gross margin  42.8 %           43.5%
    Operating expenses  215,119   (23,645) (8,481) (2,363)   180,630 
    Operating income  69,940   28,558  8,481  2,595 ^  109,574 
    Net income (loss)  (30,368)  28,558  8,481  91,668 ^  98,339 
                        
    ^   - See table below for additional details.
                        

     Other Non-GAAP Adjustments (FY 2023)
    (in thousands)
    (unaudited)

        
    For the year ended December 31, 2023
         
    Acquisition related
    $1,056 
    Changes in contingent consideration
     701 
    Transition expenses related to San Jose expansion project
     838 
    Subtotal
     2,595 
    Non-cash interest expense
     1,118 
    Other (income) expense, net
     97,091 
    Non-GAAP tax adjustment *
     (9,136)
    Total Other
    $91,668 
         
    *  - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.
         

    Net Income per Common Share (FY 2023)
    (in thousands, except per share amounts)
    (unaudited)

      Year ended December 31, 2023
      GAAP Non-GAAP
    Numerator:      
    Net income (loss)    $(30,368)    $98,339
    Interest expense associated with convertible notes     4,768
    Net income (loss) available to common shareholders $(30,368) $103,107
           
    Denominator:      
    Basic weighted average shares outstanding  53,769   53,769
    Effect of potentially dilutive share-based awards     850
    Dilutive effect of 2023 Convertible Senior Notes     21
    Dilutive effect of 2025 Convertible Senior Notes     2,786
    Dilutive effect of 2027 Convertible Senior Notes (1)     3,417
    Diluted weighted average shares outstanding  53,769   60,843
           
    Net income (loss) per common share:      
    Basic $(0.56) $1.83
    Diluted $(0.56) $1.69
            
    (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 (FY 2022)
    (in thousands)
    (unaudited)

          Non-GAAP Adjustments     
          Share-based        
    For the year ended December 31, 2022     GAAP     Compensation    Amortization    Other     Non-GAAP 
    Net sales $646,137         $646,137 
    Gross profit  263,148  4,551    3,300    270,999 
    Gross margin  40.7%           41.9%
    Operating expenses  202,852  (18,443) (10,018) (3,212)   171,179 
    Operating income  60,296  22,994  10,018  6,512 ^  99,820 
    Net income  166,942  22,994  10,018  (110,379)^  89,575 
                       
    ^  - See table below for additional details.
                       

    Other Non-GAAP Adjustments (FY 2022)
    (in thousands)
    (unaudited)

    For the year ended December 31, 2022  
    Transition expenses related to San Jose expansion project$6,202 
    Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 310 
    Subtotal 6,512 
    Non-cash interest expense 962 
    Other (income) expense, net (104,971)
    Non-GAAP tax adjustment * (12,882)
    Total Other$(110,379)
         
    *  - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.
         

     Net Income per Common Share (FY 2022)
    (in thousands, except per share amounts)
    (unaudited)

      Year ended December 31, 2022
      GAAP Non-GAAP
    Numerator:      
    Net income    $166,942    $89,575
    Interest expense associated with convertible notes  10,832  9,870
    Net income available to common shareholders $177,774 $99,445
           
    Denominator:      
    Basic weighted average shares outstanding  49,906  49,906
    Effect of potentially dilutive share-based awards  734  734
    Dilutive effect of 2023 Convertible Senior Notes  504  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  65,607  63,436
           
    Net income per common share:      
    Basic $3.35 $1.79
    Diluted $2.71 $1.57
           
    (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 (FY 2023 and 2022)
    (in thousands)
    (unaudited)

         Year ended     Year ended
      December 31, 2023 December 31, 2022
    GAAP Net income (loss) $(30,368) $166,942 
    Share-based compensation  28,558   22,994 
    Amortization  8,481   10,018 
    Acquisition related  1,056    
    Changes in contingent consideration  701    
    Transition expenses related to San Jose expansion project  838   6,202 
    Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting     310 
    Interest (income) expense, net  1,187   9,311 
    Other (income) expense, net  97,091    
    Income tax expense (benefit)  2,030   (115,957)
    Non-GAAP Operating income (loss) $109,574  $99,820 
             

    Reconciliation of GAAP to Non-GAAP Financial Data (Q1 2024)
    (in millions, except per share amounts)
    (unaudited)

              Non-GAAP Adjustments        
    Guidance for the three months ending         Share-based             
    March 31, 2024 GAAP Compensation Amortization    Other     Non-GAAP
    Net sales    $160     -    $180                    $160     -    $180 
    Gross profit  68  -  78  1       69  -  79 
    Gross margin  42% -  43%        43% -  44%
    Operating expenses  53  -  56  (6) (2)    46  -  48 
    Operating income  15  -  22  7  2     24  -  31 
    Net income $13  - $20  7  2  (1) $21  - $27 
                           
    Income per diluted common share $0.22  - $0.33           $0.36  - $0.46 
                               

    Income per Diluted Common Share (Q1 2024)
    (in millions, except per share amounts)
    (unaudited)

    Guidance for the three months ending March 31, 2024 GAAP Non-GAAP
    Numerator:                
    Net income    $13    -    $20    $21    -    $27
    Interest expense associated with convertible notes            
    Net income available to common shareholders $13 - $20 $21 - $27
                     
    Denominator:                
    Basic weighted average shares outstanding  56    56  56    56
    Effect of potentially dilutive share-based awards  1    1  1    1
    Dilutive effect of 2025 Convertible Senior Notes      1  1    1
    Dilutive effect of 2027 Convertible Senior Notes (1)  2    2  1    1
    Dilutive effect of 2029 Convertible Senior Notes  1    1  1    1
    Diluted weighted average shares outstanding  60    61  60    60
                     
    Net income per common share:                
    Income per diluted common share $0.22 - $0.33 $0.36 - $0.46
                     
    (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 (Q1 2024)
    (in millions)
    (unaudited)

             
    Guidance for the three months ending March 31, 2024                 
    GAAP Net income $13 - $20
    Share-based compensation  7 -  7
    Amortization  2 -  2
    Income tax expense (benefit)  2 -  2
    Non-GAAP Operating income $24 - $31

    Note: Amounts may not calculate precisely due to rounding.


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