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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 7, 2022
VEECO INSTRUMENTS INC.
(Exact name of registrant as specified in its charter)
Delaware |
0-16244 |
11-2989601 |
Terminal Drive, Plainview, New York 11803
(Address of principal executive offices)
(516) 677-0200
(Registrant’s telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Common Stock, par value $0.01 per share |
VECO |
The NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On November 7, 2022, Veeco Instruments Inc. issued a press release announcing its financial results for the quarter ended September 30, 2022. In connection with the release and the related conference call, Veeco posted a presentation relating to its third quarter 2022 financial results on its website (www.veeco.com). Copies of the press release and presentation are furnished as Exhibit 99.1 and Exhibit 99.2 to this report.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
EXHIBIT INDEX
Exhibit |
|
Description |
|
|
|
99.1 |
|
|
|
|
|
99.2 |
|
|
|
|
|
104 |
|
Cover Page Interactive Data File (formatted as inline XBRL). |
Limitation on Incorporation by Reference
In accordance with general instruction B.2 of Form 8-K, the information in this report, including exhibits, is furnished pursuant to Items 2.02 and 9.01 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall this information or exhibits be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
November 7, 2022 |
VEECO INSTRUMENTS INC. |
|
|
|
|
|
By: |
/s/ Kirk Mackey |
|
Name: Kirk Mackey |
|
|
Title: Vice President, General Counsel |
|
2
EXHIBIT 99.1
VEECO REPORTS THIRD QUARTER 2022 FINANCIAL RESULTS
Third Quarter 2022 Highlights:
| ● | Revenues of $171.9 million, compared with $150.2 million in the same period last year |
| ● | GAAP net income of $15.0 million, or $0.27 per diluted share, compared with $9.0 million, or $0.17 per diluted share in the same period last year |
| ● | Non-GAAP net income of $26.0 million, or $0.45 per diluted share, compared with $20.5 million, or $0.40 per diluted share in the same period last year |
Plainview, N.Y., November 7, 2022 -- Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its third quarter ended September 30, 2022. 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 '22 |
|
Q3 '21 |
||
Revenue |
|
$ |
171.9 |
|
$ |
150.2 |
Net income |
|
$ |
15.0 |
|
$ |
9.0 |
Diluted earnings per share |
|
$ |
0.27 |
|
$ |
0.17 |
Non-GAAP Results |
|
Q3 '22 |
|
Q3 '21 |
||
Operating income |
|
$ |
28.4 |
|
$ |
24.3 |
Net income |
|
$ |
26.0 |
|
$ |
20.5 |
Diluted earnings per share |
|
$ |
0.45 |
|
$ |
0.40 |
“With significant contributions from our laser annealing product line, as well as systems for advanced packaging and EUV mask blank production, we achieved another record revenue quarter in our semiconductor business which drove robust year-on-year revenue growth for the company,” commented Bill Miller, Veeco’s Chief Executive Officer. “Despite the challenging current macro environment, we continue to invest in executing our growth strategy, are well positioned with attractive technologies and we are optimistic about expanding our served available market.”
1
Guidance and Outlook
The following guidance is provided for Veeco’s fourth quarter 2022:
| ● | Revenue is expected in the range of $150 million to $170 million |
| ● | GAAP diluted earnings per share are expected in the range of $0.05 to $0.23 |
| ● | Non-GAAP diluted earnings per share are expected in the range of $0.24 to $0.40 |
Conference Call Information
A conference call reviewing these results has been scheduled for today, November 7, 2022 starting at 5:00pm ET. To join the call, dial 1-866-580-3963 (toll free) or 1-786-697-3501 and use password VECOQ32022. 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 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, 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 Company’s 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 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 Bencivenga (516) 252-1438abencivenga@veeco.com
Media:Kevin Long (516) 714-3978klong@veeco.com
2
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, |
|
||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
||||
Net sales |
|
$ |
171,913 |
|
$ |
150,246 |
|
$ |
492,338 |
|
$ |
430,305 |
|
Cost of sales |
|
|
101,962 |
|
|
87,077 |
|
|
292,109 |
|
|
252,055 |
|
Gross profit |
|
|
69,951 |
|
|
63,169 |
|
|
200,229 |
|
|
178,250 |
|
Operating expenses, net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
27,104 |
|
|
21,999 |
|
|
77,237 |
|
|
66,397 |
|
Selling, general, and administrative |
|
|
22,144 |
|
|
21,603 |
|
|
67,987 |
|
|
63,325 |
|
Amortization of intangible assets |
|
|
2,505 |
|
|
2,976 |
|
|
7,514 |
|
|
9,305 |
|
Other operating expense (income), net |
|
|
634 |
|
|
175 |
|
|
587 |
|
|
138 |
|
Total operating expenses, net |
|
|
52,387 |
|
|
46,753 |
|
|
153,325 |
|
|
139,165 |
|
Operating income |
|
|
17,564 |
|
|
16,416 |
|
|
46,904 |
|
|
39,085 |
|
Interest expense, net |
|
|
(2,315) |
|
|
(7,012) |
|
|
(7,753) |
|
|
(20,221) |
|
Income before income taxes |
|
|
15,249 |
|
|
9,404 |
|
|
39,151 |
|
|
18,864 |
|
Income tax expense (benefit) |
|
|
208 |
|
|
411 |
|
|
1,125 |
|
|
1,029 |
|
Net income |
|
$ |
15,041 |
|
$ |
8,993 |
|
$ |
38,026 |
|
$ |
17,835 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.30 |
|
$ |
0.18 |
|
$ |
0.76 |
|
$ |
0.36 |
|
Diluted |
|
$ |
0.27 |
|
$ |
0.17 |
|
$ |
0.70 |
|
$ |
0.33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
49,887 |
|
|
49,021 |
|
|
49,831 |
|
|
48,968 |
|
Diluted |
|
|
65,151 |
|
|
53,849 |
|
|
65,090 |
|
|
53,606 |
|
3
Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
|
|
September 30, |
|
December 31, |
||
|
|
2022 |
|
2021 |
||
|
|
(unaudited) |
|
|
|
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
169,111 |
|
$ |
119,747 |
Restricted cash |
|
|
557 |
|
|
725 |
Short-term investments |
|
|
101,862 |
|
|
104,181 |
Accounts receivable, net |
|
|
142,985 |
|
|
109,609 |
Contract assets |
|
|
29,865 |
|
|
18,293 |
Inventories |
|
|
187,737 |
|
|
170,858 |
Prepaid expenses and other current assets |
|
|
17,586 |
|
|
25,974 |
Total current assets |
|
|
649,703 |
|
|
549,387 |
Property, plant and equipment, net |
|
|
108,416 |
|
|
99,743 |
Operating lease right-of-use assets |
|
|
25,119 |
|
|
28,813 |
Intangible assets, net |
|
|
26,391 |
|
|
33,905 |
Goodwill |
|
|
181,943 |
|
|
181,943 |
Deferred income taxes |
|
|
1,639 |
|
|
1,639 |
Other assets |
|
|
3,406 |
|
|
3,546 |
Total assets |
|
$ |
996,617 |
|
$ |
898,976 |
|
|
|
|
|
|
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
51,129 |
|
$ |
44,456 |
Accrued expenses and other current liabilities |
|
|
65,062 |
|
|
79,752 |
Customer deposits and deferred revenue |
|
|
122,285 |
|
|
63,136 |
Income taxes payable |
|
|
1,565 |
|
|
1,860 |
Current portion of long-term debt |
|
|
20,144 |
|
|
— |
Total current liabilities |
|
|
260,185 |
|
|
189,204 |
Deferred income taxes |
|
|
4,748 |
|
|
4,792 |
Long-term debt |
|
|
254,272 |
|
|
229,438 |
Long-term operating lease liabilities |
|
|
31,266 |
|
|
32,834 |
Other liabilities |
|
|
5,031 |
|
|
5,080 |
Total liabilities |
|
|
555,502 |
|
|
461,348 |
|
|
|
|
|
|
|
Total stockholders’ equity |
|
|
441,115 |
|
|
437,628 |
Total liabilities and stockholders’ equity |
|
$ |
996,617 |
|
$ |
898,976 |
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.
4
Reconciliation of GAAP to Non-GAAP Financial Data (Q3 2022)
(in thousands)
(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-GAAP |
||
Numerator: |
|
|
|
|
|
|
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.
5
Reconciliation of GAAP to Non-GAAP Financial Data (Q3 2021)
(in thousands, except per share amounts)
(unaudited)
|
|
|
|
|
Non-GAAP Adjustments |
|
|
|
|
||||
|
|
|
|
|
Share-based |
|
|
|
|
|
|
|
|
Three months ended September 30, 2021 |
|
|
GAAP |
|
Compensation |
|
Amortization |
|
Other |
|
Non-GAAP |
|
|
Net sales |
|
$ |
150,246 |
|
|
|
|
|
|
|
$ |
150,246 |
|
Gross profit |
|
|
63,169 |
|
620 |
|
|
|
150 |
|
|
63,939 |
|
Gross margin |
|
|
42.0 |
% |
|
|
|
|
|
|
|
42.6 |
% |
Operating expenses |
|
|
46,753 |
|
(3,510) |
|
(2,976) |
|
(637) |
|
|
39,630 |
|
Operating income |
|
|
16,416 |
|
4,130 |
|
2,976 |
|
787 |
^ |
|
24,309 |
|
Net income |
|
|
8,993 |
|
4,130 |
|
2,976 |
|
4,375 |
^ |
|
20,474 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.18 |
|
|
|
|
|
|
|
$ |
0.42 |
|
Diluted |
|
|
0.17 |
|
|
|
|
|
|
|
|
0.40 |
|
Weighted average number of shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
49,021 |
|
|
|
|
|
|
|
|
49,021 |
|
Diluted (1) |
|
|
53,849 |
|
|
|
|
|
|
|
|
51,679 |
|
^ |
- See table below for additional details. |
(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 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. The average stock price for the three months ended September 30, 2021 was $22.24, and therefore 1.2 million shares were included in the non-GAAP diluted share count, and 3.3 million shares were included in the GAAP diluted share count related to the 2027 Notes.
Other Non-GAAP Adjustments (Q3 2021)
(in thousands)
(unaudited)
Three months ended September 30, 2021 |
|
|
Transition expenses related to San Jose expansion project |
$ |
705 |
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting |
|
82 |
Subtotal |
|
787 |
Non-cash interest expense |
|
3,663 |
Non-GAAP tax adjustment * |
|
(75) |
Total Other |
$ |
4,375 |
* |
- The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments. |
Reconciliation of GAAP Net Income to Non-GAAP Operating Income (Q3 2022 and 2021)
(in thousands)
(unaudited)
|
|
Three months ended |
|
Three months ended |
||
|
|
September 30, 2022 |
|
September 30, 2021 |
||
GAAP Net income |
|
$ |
15,041 |
|
$ |
8,993 |
Share-based compensation |
|
|
6,210 |
|
|
4,130 |
Amortization |
|
|
2,505 |
|
|
2,976 |
Transition expenses related to San Jose expansion project |
|
|
1,936 |
|
|
705 |
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting |
|
|
147 |
|
|
82 |
Interest (income) expense, net |
|
|
2,315 |
|
|
7,012 |
Income tax expense (benefit) |
|
|
208 |
|
|
411 |
Non-GAAP Operating income |
|
$ |
28,362 |
|
$ |
24,309 |
6
Reconciliation of GAAP to Non-GAAP Financial Data (Q4 2022)
(in millions, except per share amounts)
(unaudited)
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjustments |
|
|
|
|
|
|
|
|
|
||||
Guidance for the three months ending |
|
|
|
|
|
|
|
|
|
Share-based |
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2022 |
|
GAAP |
|
Compensation |
|
Amortization |
|
Other |
|
Non-GAAP |
|
||||||||||||
Net sales |
|
$ |
150 |
|
- |
|
$ |
170 |
|
|
|
|
|
|
|
$ |
150 |
|
- |
|
$ |
170 |
|
Gross profit |
|
|
56 |
|
- |
|
|
68 |
|
1 |
|
— |
|
1 |
|
|
58 |
|
- |
|
|
70 |
|
Gross margin |
|
|
37% |
|
- |
|
|
40% |
|
|
|
|
|
|
|
|
39% |
|
- |
|
|
41% |
|
Operating expenses |
|
|
51 |
|
- |
|
|
53 |
|
(5) |
|
(3) |
|
(1) |
|
|
43 |
|
- |
|
|
45 |
|
Operating income |
|
|
5 |
|
- |
|
|
15 |
|
6 |
|
3 |
|
1 |
|
|
15 |
|
- |
|
|
25 |
|
Net income |
|
$ |
2 |
|
- |
|
$ |
12 |
|
6 |
|
3 |
|
2 |
|
$ |
13 |
|
- |
|
$ |
23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per diluted common share |
|
$ |
0.05 |
|
- |
|
$ |
0.23 |
|
|
|
|
|
|
|
$ |
0.24 |
|
- |
|
$ |
0.40 |
|
Income per Diluted Common Share (Q4 2022)
(in millions, except per share amounts)
(unaudited)
Guidance for the three months ending December 31, 2022 |
|
GAAP |
|
Non-GAAP |
||||||||||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
2 |
|
- |
|
$ |
12 |
|
$ |
13 |
|
- |
|
$ |
23 |
Interest expense associated with convertible notes |
|
|
— |
|
|
|
|
3 |
|
|
2 |
|
|
|
|
2 |
Net income available to common shareholders |
|
$ |
2 |
|
- |
|
$ |
15 |
|
$ |
15 |
|
- |
|
$ |
25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding |
|
|
50 |
|
|
|
|
50 |
|
|
50 |
|
|
|
|
50 |
Effect of potentially dilutive share-based awards |
|
|
1 |
|
|
|
|
1 |
|
|
1 |
|
|
|
|
1 |
Dilutive effect of 2023 Convertible Senior Notes |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
|
|
— |
Dilutive effect of 2025 Convertible Senior Notes |
|
|
— |
|
|
|
|
6 |
|
|
6 |
|
|
|
|
6 |
Dilutive effect of 2027 Convertible Senior Notes (1) |
|
|
— |
|
|
|
|
9 |
|
|
7 |
|
|
|
|
7 |
Diluted weighted average shares outstanding |
|
|
51 |
|
|
|
|
66 |
|
|
64 |
|
|
|
|
64 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per diluted common share |
|
$ |
0.05 |
|
- |
|
$ |
0.23 |
|
$ |
0.24 |
|
- |
|
$ |
0.40 |
(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 2022)
(in millions)
(unaudited)
Guidance for the three months ending December 31, 2022 |
|
|
|
|
|
|
|
|
GAAP Net income |
|
$ |
2 |
|
- |
|
$ |
12 |
Share-based compensation |
|
|
6 |
|
- |
|
|
6 |
Amortization |
|
|
3 |
|
- |
|
|
3 |
Interest expense, net |
|
|
2 |
|
- |
|
|
2 |
Other |
|
|
2 |
|
- |
|
|
2 |
Non-GAAP Operating income |
|
$ |
15 |
|
- |
|
$ |
25 |
Note: Amounts may not calculate precisely due to rounding.
7
|
Q3 2022 Financial Results Conference Call Copyright © 2022 Veeco Instruments Inc. All Rights Reserved. 1 Veeco (Nasdaq: VECO) November 7, 2022 Q3 2022 Financial Results Conference Call |
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Q3 2022 Financial Results Conference Call Copyright © 2022 Veeco Instruments Inc. All Rights Reserved. 2 2 Safe Harbor This presentation 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, 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 Company’s 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 management’s expectations, estimates, projections and assumptions as of the date of this presentation . 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 presentation . |
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Q3 2022 Financial Results Conference Call Copyright © 2022 Veeco Instruments Inc. All Rights Reserved. 3 CEO Overview and Market Update Bill Miller |
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Q3 2022 Financial Results Conference Call Copyright © 2022 Veeco Instruments Inc. All Rights Reserved. 4 4 Q3 2022 Highlights $172M $28M 45¢ Revenue Non - GAAP Operating Income Diluted Non - GAAP EPS • Robust revenue growth – up 32% YoY • Another record quarter of semiconductor revenue – up 21% YoY • Strong cash generation • Mixed demand environment with pockets of strength • Supply chain challenges persist Great quarter in a challenging environment A reconciliation of GAAP to Non - GAAP financial measures can be found in the backup section of this presentation. |
|
Q3 2022 Financial Results Conference Call Copyright © 2022 Veeco Instruments Inc. All Rights Reserved. 5 5 Mobility and Immersive User Experience Connecting people on the move with technologies such as 5G, sensors, advanced displays The Cloud High speed communication and storage of enormous amounts of data Differentiated Technologies Aligned with Megatrends Compound Semiconductor Semiconductor Growth Markets Core Technologies Megatrends Laser Annealing AP Lithography Ion Beam Wet Processing MOCVD Transformation of the Automotive Industry Electrification and autonomous advancements High Performance Computing/AI Faster and more efficient computing to enable large scale data center applications and artificial intelligence Data Storage Ion Beam Deposition Ion Beam Etch AI – Artificial Intelligence 5G – Fifth generation wireless technology AP – Advanced Packaging MOCVD – Metal Organic Chemical Vapor Deposition |
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Q3 2022 Financial Results Conference Call Copyright © 2022 Veeco Instruments Inc. All Rights Reserved. 6 6 2022 Priorities – Executing Our Growth Plan Protect ▪ Capacity Expansion ▪ New technology evaluations ▪ Service capability ▪ Safety ▪ Culture ▪ 10% - 14% revenue growth ▪ Supply chain ▪ Quality ▪ Delivery ▪ Evaluations Growth & Profitability A transformed company committed to growth Execute Innovate & Invest Strategy Execution |
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Q3 2022 Financial Results Conference Call Copyright © 2022 Veeco Instruments Inc. All Rights Reserved. 7 CFO Financial Review John Kiernan |
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Q3 2022 Financial Results Conference Call Copyright © 2022 Veeco Instruments Inc. All Rights Reserved. 8 8 Q3 2022 Revenue by Market & Region 59% 16% 16% 9% Revenue by Market Revenue by Region Scientific & Other Semiconductor Compound Semiconductor Data Storage 38% 31% 21% 10% EMEA China United States Rest of APAC $172M Revenue Trend ($M) Q3 21 Q2 22 Q3 22 Semiconductor 76 98 100 Compound Semi 23 31 28 Data Storage 39 22 28 Scientific & Other 11 14 16 Total 150 164 172 Amounts may not calculate precisely due to rounding. ROW is negligible |
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Q3 2022 Financial Results Conference Call Copyright © 2022 Veeco Instruments Inc. All Rights Reserved. 9 9 Q3 Operating Results In millions (except per share amounts) GAAP Non - GAAP Q2 22 Q3 22 Q2 22 Q3 22 Revenue $164.0 $171.9 $164.0 $171.9 Gross Profit 64.3 70.0 66.2 72.2 Gross Margin 39.2% 40.7% 40.3% 42.0% Operating Expenses 51.4 52.4 43.2 43.9 Operating Income 12.8 17.6 23.0 28.4 Net Income 9.7 15.0 20.0 26.0 Diluted Earnings Per Share $0.18 $0.27 $0.35 $0.45 Diluted Shares 59.5 65.2 63.3 63.5 Amounts may not calculate precisely due to rounding. A reconciliation of GAAP to Non - GAAP financial measures can be found in the backup section of this presentation. |
|
Q3 2022 Financial Results Conference Call Copyright © 2022 Veeco Instruments Inc. All Rights Reserved. 10 10 Balance Sheet and Cash Flow Highlights $ millions Q2 22 Q3 22 Cash & Short - Term Investments 231 272 Accounts Receivable 127 143 Inventories 176 188 Accounts Payable 47 51 Long - Term Debt Including Current Portion 274 274 Cash Flow from Operations 3 47 DSO (days) 70 75 DIO 160 161 DPO 43 46 Capital Expenditures 5 6 Amounts may not calculate precisely due to rounding. A reconciliation of GAAP to Non - GAAP financial measures can be found in the backup section of this presentation. |
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Q3 2022 Financial Results Conference Call Copyright © 2022 Veeco Instruments Inc. All Rights Reserved. 11 11 Q4 2022 Guidance GAAP Non - GAAP Revenue $150M - $170M $150M - $170M Gross Margin 37% - 40% 39% - 41% Operating Expenses $51M - $53M $43M - $45M Net Income $2M - $12M $13M - $23M Diluted Earnings Per Share $0.05 – $0.23 $0.24 - $0.40 A reconciliation of GAAP to Non - GAAP financial measures can be found in the backup section of this presentation. |
|
Q3 2022 Financial Results Conference Call Copyright © 2022 Veeco Instruments Inc. All Rights Reserved. 12 Thank You Q&A |
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Q3 2022 Financial Results Conference Call Copyright © 2022 Veeco Instruments Inc. All Rights Reserved. 13 Backup and Financial Tables |
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Q3 2022 Financial Results Conference Call Copyright © 2022 Veeco Instruments Inc. All Rights Reserved. 14 14 Historical Revenue by End - Market $M 2019 2020 2021 2022 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Semiconductor 44.6 37.8 41.8 51.3 175.6 37.4 37.5 33.6 57.4 165.9 51.6 53.7 76.3 65.4 247.1 77.6 97.5 100.4 Compound Semi 15.0 16.4 26.3 28.1 85.9 18.4 17.8 26.6 45.2 107.9 24.8 24.2 23.3 34.7 107.0 37.1 31.1 28.1 Data Storage 19.6 22.7 24.1 17.6 84.1 38.9 28.3 36.9 19.2 123.3 41.0 52.0 39.3 36.5 168.8 21.6 21.5 27.7 Scientific & Other 20.2 20.8 16.6 16.2 73.8 9.8 15.1 15.0 17.1 57.0 16.4 16.4 11.4 16.3 60.5 20.1 13.8 15.7 Total 99.4 97.8 109.0 113.2 419.3 104.5 98.6 112.1 138.9 454.2 133.7 146.3 150.2 153.0 583.3 156.4 164.0 171.9 Amounts may not calculate precisely due to rounding. |
|
Q3 2022 Financial Results Conference Call Copyright © 2022 Veeco Instruments Inc. All Rights Reserved. 15 15 Convertible Notes as of September 30, 2022 (1) Conversion price for 2027 Convertible Notes includes the effect of the Capped Call transaction (2) Weighted average (3) Reflects the adoption of ASU 2020 - 06, effective January 1, 2022 Amounts may not calculate precisely due to rounding. Convertible Debt Principal Amount Carrying Value Coupon Annual Cash Interest Annual Non - Cash Interest 3 Initial Conversion Price Convertible Notes Due Jan 2023 $20M $20M 2.7% $0.5M $0.1M $40.03 Convertible Notes Due Jan 2025 $133M $131M 3.5% $4.7M $0.5M $24.00 Convertible Notes Due June 2027 $125M $123M 3.75% $4.6M $0.4M $18.46 1 Total Convertible Debt $278M $274M 3.6% 2 $9.8M $1.0M |
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Q3 2022 Financial Results Conference Call Copyright © 2022 Veeco Instruments Inc. All Rights Reserved. 16 16 Effect of New Accounting Standard for Convertible Notes on Diluted EPS (Effective Q1 2022) Based upon current Notes outstanding. The above calculations are intended to be estimates only, and reflect the use of the if - co nverted method for diluted EPS purposes, which the Company is now required to use upon adoption of ASU 2020 - 06, effective Q1 2022. The EPS thresholds mentioned above represent various ranges at which some of our Notes may become di lutive. No shares are added for dilution purposes if the addition of such shares (and reduced interest expense) would be anti - dilutive. * The non - GAAP incremental dilutive shares includes the impact of the Company’s capped call transactions issued concurrently wit h our 2027 Notes, and assumes an average per share stock price above $18.46. Quarterly GAAP Non - GAAP* EPS threshold before effect of Notes Reduction to Interest expense for EPS calculation (in thousands) Incremental Dilutive Shares** (in thousands) EPS threshold before effect of Notes Reduction to Interest expense for EPS calculation (in thousands) Incremental Dilutive Shares** (in thousands) ≥ $0.14 < $0.23 $1,272 8,942 ≥ $0.17 < $0.21 $1,172 6,771 ≥ $0.23 < $0.32 $2,544 14,463 ≥ $0.21 < $0.27 $2,331 12,292 ≥ $0.32 $2,704 14,967 ≥ $0.27 $2,467 12,796 Annual GAAP Non - GAAP* EPS threshold before effect of Notes Reduction to Interest expense for EPS calculation (in thousands) Incremental Dilutive Shares** (in thousands) EPS threshold before effect of Notes Reduction to Interest expense for EPS calculation (in thousands) Incremental Dilutive Shares** (in thousands) ≥ $0.57 < $0.92 $5,096 8,942 ≥ $0.69 < $0.84 $4,688 6,771 ≥ $0.92 < $1.27 $10,190 14,463 ≥ $0.84 < $1.08 $9,325 12,292 ≥ $1.27 $10,832 14,967 ≥ $1.08 $9,870 12,796 |
|
Q3 2022 Financial Results Conference Call Copyright © 2022 Veeco Instruments Inc. All Rights Reserved. 17 17 Note on Reconciliation Tables 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, incremental transaction - related compensation, 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, 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 . |
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Q3 2022 Financial Results Conference Call Copyright © 2022 Veeco Instruments Inc. All Rights Reserved. 18 18 Supplemental Information — GAAP to Non - GAAP Reconciliation Amounts may not calculate precisely due to rounding. In millions Q2 22 Q3 22 Net sales $164.0 $171.9 GAAP gross profit 64.3 70.0 GAAP gross margin 39.2% 40.7% Add: Share - based comp 1.3 1.2 Add: Other 0.7 1.1 Non - GAAP gross profit $66.2 $72.2 Non - GAAP gross margin 40.3% 42.0% In millions Q2 22 Q3 22 GAAP Net income $9.7 $15.0 Add: Share - b ased comp 6.3 6.2 Add: Amortization 2.5 2.5 Add: Transition expenses related to San Jose expansion project 1.3 1.9 Add: Depreciation of PP&E fair value step - up for purchase accounting 0.1 0.1 Add: Interest expense 2.6 2.3 Add: Tax expense (benefit) 0.5 0.2 Non - GAAP operating income $23.0 $28.4 In millions, except per share amounts Q2 22 Q3 22 GAAP Basic weighted average shares 49.7 49.9 GAAP Diluted weighted average shares 59.5 65.2 GAAP Basic EPS $0.19 $0.30 GAAP Diluted EPS $0.18 $0.27 GAAP Net income $9.7 $15.0 Add: Share - based comp 6.3 6.2 Add: Amortization 2.5 2.5 Add: Transition expenses related to San Jose expansion project 1.3 1.9 Add: Depreciation of PP&E fair value step - up for purchase accounting 0.1 0.1 Add: Non - cash interest expense 0.2 0.2 Add: Tax adjustment from GAAP to Non - GAAP (0.1) (0.1) Non - GAAP net income $20.0 $26.0 Non - GAAP basic EPS $0.40 $0.52 Non - GAAP diluted EPS $0.35 $0.45 Non - GAAP basic weighted average shares 49.7 49.9 Non - GAAP diluted weighted average shares 63.3 63.5 |
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Q3 2022 Financial Results Conference Call Copyright © 2022 Veeco Instruments Inc. All Rights Reserved. 19 19 Reconciliation of GAAP to non - GAAP Financial Data Non - GAAP Adjustments GAAP Share - Based Compensation Amortization Other Non - GAAP Net Sales $171.9 $171.9 Gross Profit 70.0 1.2 — 1.1 72.2 Gross Margin 40.7% 42.0% Operating Expenses $52.4 (5.0) (2.5) (1.0) $43.9 Operating Income $17.6 6.2 2.5 2.1 $28.4 Net Income $15.0 6.2 2.5 2.3 $26.0 Q3 2022 Actual: GAAP to Non - GAAP Reconciliation (in millions, except per share amounts) Amounts may not calculate precisely due to rounding. Income per Diluted Common Share GAAP Non - GAAP Net Income $15.0 $26.0 Add: Interest on Convertible Senior Notes 2.5 2.5 Net income available to common shareholders 17.6 28.5 Basic weighted average common shares 49.9 49.9 Add: Dilutive effect of share - based awards 0.8 0.8 Add: Dilutive effect of 2023 Convertible Senior Notes - 0.5 Add: Dilutive effect of 2025 Convertible Senior Notes 5.5 5.5 Add: Dilutive effect of 2027 Convertible Senior Notes 8.9 6.8 Diluted weighted average common shares 65.2 63.5 Basic income per common share $0.30 $0.52 Diluted income per common share $0.27 $0.45 Other Non - GAAP Adjustments Transition expenses related to San Jose expansion project $1.9 Depreciation of PPE fair value step - up associated with the Ultratech purchase accounting 0.1 Subtotal 2.1 Non - cash Interest Expense 0.2 Non - GAAP tax adjustment (0.1) Total Other $2.3 |
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Q3 2022 Financial Results Conference Call Copyright © 2022 Veeco Instruments Inc. All Rights Reserved. 20 20 Reconciliation of GAAP to non - GAAP Financial Data Non - GAAP Adjustments GAAP Share - Based Compensation Amortization Other Non - GAAP Net Sales $150 – $170 $150 – $170 Gross Profit 56 – 68 1 — 1 58 – 70 Gross Margin 37% – 40% 39% – 41% Operating Expenses $51 – $53 (5) (3) (1) $43 – $45 Operating Income $5 – $15 6 3 1 $15 – $25 Net Income $2 – $12 6 3 2 $13 – $23 Income per Diluted Share $0.05 – $0.23 $0.24 – $0.40 Q4 2022 Guidance (in millions, except per share amounts) Amounts may not calculate precisely due to rounding. Income per Diluted Common Share GAAP Non - GAAP Net Income $2 – $12 $13 – $23 Add: Interest on Convertible Senior Notes 0 - 3 2 Net income available to common shareholders 2 - 15 15 - 25 Basic weighted average common shares 50 50 Add: Dilutive effect of share - based awards 1 1 Add: Dilutive effect of 2023 Convertible Senior Notes - - Add: Dilutive effect of 2025 Convertible Senior Notes 0 - 6 6 Add: Dilutive effect of 2027 Convertible Senior Notes 0 - 9 7 Diluted weighted average common shares 51 - 66 64 Income per diluted common share $0.05 - $0.23 $0.24 - $0.40 Reconciliation of GAAP Net Income to non - GAAP Operating Income GAAP Net Income $2 – $12 Share - Based Compensation 6 Amortization 3 Interest Expense, Net 2 Other 2 Non - GAAP Operating Income $15 – $25 |
