Veeco Reports Second Quarter 2024 Financial Results

Source: GlobeNewswire
Veeco Reports Second Quarter 2024 Financial Results

Second Quarter 2024 Highlights:

  • Revenue of $175.9 million, compared with $161.6 million in the same period last year
  • GAAP net income of $14.9 million, or $0.25 per diluted share, compared with net loss of $85.3 million, or $1.61 loss per diluted share in the same period last year
  • Non-GAAP net income of $25.4 million, or $0.42 per diluted share, compared with $20.6 million, or $0.36 per diluted share in the same period last year

PLAINVIEW, N.Y., Aug. 06, 2024 (GLOBE NEWSWIRE) -- Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its second quarter ended June 30, 2024. 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 Q2 '24 Q2 '23
Revenue $175.9  $161.6 
Net income (loss) $14.9  $(85.3)
Diluted earnings (loss) per share $0.25  $(1.61)


Non-GAAP Results Q2 '24 Q2 '23
Operating income $28.3  $24.3 
Net income $25.4  $20.6 
Diluted earnings per share $0.42  $0.36 
         

“We delivered solid second quarter results in line with our guidance, led by our Semiconductor business,” commented Bill Miller, Ph.D., Veeco’s Chief Executive Officer. “Demand for our Laser Annealing systems remains strong, highlighted by record revenue during the quarter. We’re also pleased to have received follow-on LSA orders for a leading logic customer’s gate-all-around process, as well as follow-on business from our Tier 1 DRAM customer to support their planned expansion.”
Guidance and Outlook

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

  • Revenue is expected in the range of $170 million to $190 million
  • GAAP diluted earnings per share are expected in the range of $0.21 to $0.31
  • Non-GAAP diluted earnings per share are expected in the range of $0.39 to $0.49

Conference Call Information

A conference call reviewing these results has been scheduled for today, August 6, 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; 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) 500-8798apappone@veeco.com
Media:Kevin Long(516) 714-3978klong@veeco.com
    


Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
             
 Three months ended June 30,  Six months ended June 30,
 2024 2023 2024 2023
Net sales$175,879  $161,641  $350,363  $315,145 
Cost of sales 100,489   94,131   199,554   185,618 
Gross profit 75,390   67,510   150,809   129,527 
Operating expenses, net:            
Research and development 31,696   27,384   61,338   54,945 
Selling, general, and administrative 24,595   23,822   49,295   46,449 
Amortization of intangible assets 1,825   2,123   3,716   4,235 
Other operating expense (income), net 552   493   (2,307)  404 
Total operating expenses, net 58,668   53,822   112,042   106,033 
Operating income 16,722   13,688   38,767   23,494 
Interest income (expense), net 349   (632)  1,054   (1,434)
Other income (expense), net    (97,091)     (97,091)
Income (loss) before income taxes 17,071   (84,035)  39,821   (75,031)
Income tax expense 2,127   1,285   3,023   1,548 
Net income (loss)$14,944  $(85,320) $36,798  $(76,579)
             
Income (loss) per common share:            
Basic$0.27  $(1.61) $0.66  $(1.48)
Diluted$0.25  $(1.61) $0.61  $(1.48)
             
Weighted average number of shares:            
Basic 56,277   52,861   56,160   51,764 
Diluted 62,535   52,861   61,733   51,764 
                


Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
        
 June 30,  December 31,
 2024 2023
 (unaudited)    
Assets       
Current assets:       
Cash and cash equivalents$174,164  $158,781 
Restricted cash 289   339 
Short-term investments 130,696   146,664 
Accounts receivable, net 92,397   103,018 
Contract assets 39,436   24,370 
Inventories 245,108   237,635 
Prepaid expenses and other current assets 36,105   35,471 
Total current assets 718,195   706,278 
Property, plant and equipment, net 113,461   118,459 
Operating lease right-of-use assets 27,332   24,377 
Intangible assets, net 40,229   43,945 
Goodwill 214,964   214,964 
Deferred income taxes 117,901   117,901 
Other assets 3,033   3,117 
Total assets$1,235,115  $1,229,041 
        
Liabilities and stockholders’ equity       
Current liabilities:       
Accounts payable$46,850  $42,383 
Accrued expenses and other current liabilities 50,119   57,624 
Contract liabilities 80,556   118,026 
Current portion of long-term debt 26,448    
Total current liabilities 203,973   218,033 
Deferred income taxes 6,445   6,552 
Long-term debt 249,105   274,941 
Long-term operating lease liabilities 34,938   31,529 
Other liabilities 25,641   25,544 
Total liabilities 520,102   556,599 
        
Total stockholders’ equity 715,013   672,442 
Total liabilities and stockholders’ equity$1,235,115  $1,229,041 
        

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 (Q2 2024)
(in thousands)
(unaudited)
              
     Non-GAAP Adjustments    
     Share-Based        
Three months ended June 30, 2024 GAAP Compensation Amortization Other Non-GAAP 
Net sales $175,879       $175,879 
Gross profit  75,390 1,445       76,835 
Gross margin  42.9%       43.7%
Operating expenses  58,668 (7,788) (1,825) (494)  48,561 
Operating income  16,722 9,233  1,825  494 ^ 28,274 
Net income  14,944 9,233  1,825  (570)^ 25,432 

_______________________
^        - See table below for additional details.

 
Other Non-GAAP Adjustments (Q2 2024)
(in thousands)
(unaudited)
   
Three months ended June 30, 2024  
Changes in contingent consideration$494 
Subtotal 494 
Non-cash interest expense 316 
Non-GAAP tax adjustment * (1,380)
Total Other$(570)

_______________________
*        - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.

 
Net Income per Common Share (Q2 2024)
(in thousands, except per share amounts)
(unaudited)
        
 Three months ended June 30, 2024
 GAAP Non-GAAP
Numerator:       
Net income$14,944  $25,432 
Interest expense associated with 2025 and 2027 Convertible Senior Notes 512   466 
Net income available to common shareholders$15,456  $25,898 
        
Denominator:       
Basic weighted average shares outstanding 56,277   56,277 
Effect of potentially dilutive share-based awards 1,316   1,316 
Dilutive effect of 2025 Convertible Senior Notes 1,104   1,104 
Dilutive effect of 2027 Convertible Senior Notes (1) 1,788   1,354 
Dilutive effect of 2029 Convertible Senior Notes 2,050   2,050 
Diluted weighted average shares outstanding 62,535   62,101 
        
Net income per common share:       
Basic$0.27  $0.45 
Diluted$0.25  $0.42 

_______________________
(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 (Q2 2023)
(in thousands)
(unaudited)
               
     Non-GAAP Adjustments     
     Share-based       
Three months ended June 30, 2023  GAAP Compensation Amortization Other Non-GAAP 
Net sales $161,641        $161,641  
Gross profit  67,510  1,572       69,082  
Gross margin  41.8 %       42.7 %
Operating expenses  53,822  (6,360) (2,123) (549)  44,790  
Operating income  13,688  7,932  2,123  549 ^ 24,292  
Net income (loss)  (85,320) 7,932  2,123  95,868 ^ 20,603  

_______________________
^        - See table below for additional details.

 
Other Non-GAAP Adjustments (Q2 2023)
(in thousands)
(unaudited)
   
Three months ended June 30, 2023  
Changes in contingent consideration$350 
Acquisition related 199 
Subtotal 549 
Non-cash interest expense 288 
Other (income) expense, net 97,091 
Non-GAAP tax adjustment * (2,060)
Total Other$95,868 

_______________________
*        - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.

 
Net Income per Common Share (Q2 2023)
(in thousands, except per share amounts)
(unaudited)
       
 Three months ended June 30, 2023
 GAAP Non-GAAP
Numerator:      
Net income (loss)$(85,320) $20,603 
Interest expense associated with 2025 and 2027 Convertible Senior Notes    1,482 
Net income (loss) available to common shareholders$(85,320) $22,085 
       
Denominator:      
Basic weighted average shares outstanding 52,861   52,861 
Effect of potentially dilutive share-based awards    838 
Dilutive effect of 2025 Convertible Senior Notes (1)    3,385 
Dilutive effect of 2027 Convertible Senior Notes (1)(2)    4,152 
Diluted weighted average shares outstanding 52,861   61,236 
       
Net income (loss) per common share:      
Basic$(1.61) $0.39 
Diluted$(1.61) $0.36 

_______________________

(1)- Weighted average based on number of days outstanding during the period, considering the debt refinancing transaction on May 19, 2023.
(2)- 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 (Q2 2024 and 2023)
(in thousands)
(unaudited)
      
 Three months ended  Three months ended
 June 30, 2024 June 30, 2023
GAAP Net income (loss)$14,944  $(85,320)
Share-based compensation 9,233   7,932 
Amortization 1,825   2,123 
Changes in contingent consideration 494    
Transition expenses related to San Jose expansion project    350 
Acquisition related    199 
Interest (income) expense, net (349)  632 
Other (income) expense, net    97,091 
Income tax expense 2,127   1,285 
Non-GAAP Operating income$28,274  $24,292 
        


Reconciliation of GAAP to Non-GAAP Financial Data (Q3 2024)
(in millions, except per share amounts)
(unaudited)
                   
        Non-GAAP Adjustments      
Guidance for the three months ending       Share-based           
September 30, 2024 GAAP Compensation Amortization    Other     Non-GAAP
Net sales $170 -$190        $170 -$190 
Gross profit  72 - 82  2    74 - 84 
Gross margin  42% - 43%         43% - 44% 
Operating expenses  57 - 59  (8) (2)   48 - 50 
Operating income  15 - 23  10 2   26 - 34 
Net income $13 -$19  10 2 (1) $24 -$31 
                   
Income per diluted common share $0.21 -$0.31        $0.39 -$0.49 
                       


Income per Diluted Common Share (Q3 2024)
(in millions, except per share amounts)
(unaudited)
                 
Guidance for the three months ending September 30, 2024 GAAP Non-GAAP
Numerator:                
Net income $13 -$19  $24 -$31 
Interest expense associated with convertible notes     1       
Net income available to common shareholders $13 -$20  $24 -$31 
                 
Denominator:                
Basic weighted average shares outstanding  56   56   56   56 
Effect of potentially dilutive share-based awards  2   2   2   2 
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  3   3   3   3 
Diluted weighted average shares outstanding  62   63   63   63 
                 
Net income per common share:                
Income per diluted common share $0.21 -$0.31  $0.39 -$0.49 

_______________________
(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 2024)
(in millions)
(unaudited)
       
Guidance for the three months ending September 30, 2024      
GAAP Net income $13 -$19 
Share-based compensation  10 - 10 
Amortization  2 - 2 
Interest income, net  (1)- (1)
Income tax expense  2 - 4 
Non-GAAP Operating income $26 -$34 

Note: Amounts may not calculate precisely due to rounding.