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Veeco Reports Fourth Quarter and Fiscal Year 2015 Financial Results


/EINPresswire.com/ -- PLAINVIEW, NY--(Marketwired - February 22, 2016) -

Fourth Quarter 2015 Highlights

  • Revenues of $106.5 million, down 6% compared with the same period last year
  • GAAP net loss per share of $0.25 and Non-GAAP earnings per share of $0.01
  • Non-GAAP adjusted EBITDA of $4.4 million 

Full Year 2015 Highlights

  • Revenues of $477.0 million, an increase of 21% compared to 2014
  • GAAP net loss per share of $0.80 and Non-GAAP earnings per share of $0.54
  • Non-GAAP adjusted EBITDA of $41.7 million 

Veeco Instruments Inc. (NASDAQ: VECO) announced financial results for its fourth quarter and fiscal year ended December 31, 2015. 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 '15    Q4 '14     2015      2014    
--------------------------------------------------------------------------- 
Revenue                              $106.5    $113.6    $477.0    $392.9   
--------------------------------------------------------------------------- 
Net income (loss)                    ($9.8)    ($56.9)   ($32.0)   ($66.9)  
--------------------------------------------------------------------------- 
Diluted earnings (loss) per share    ($0.25)   ($1.44)   ($0.80)   ($1.70)  
--------------------------------------------------------------------------- 
                                                                            
                                        4th Quarter          Full Year      
                                   ---------------------------------------- 
Non-GAAP Results                     Q4 '15    Q4 '14     2015      2014    
--------------------------------------------------------------------------- 
Adjusted EBITDA                       $4.4      $8.3      $41.7     $2.6    
--------------------------------------------------------------------------- 
Net income (loss)                     $0.6      $5.1      $22.1    ($4.1)   
--------------------------------------------------------------------------- 
Diluted earnings (loss) per share     $0.01     $0.13     $0.54    ($0.10)  
--------------------------------------------------------------------------- 
                                                                            

"We ended 2015 on a positive note, delivering solid Q4 revenue and adjusted EBITDA and exceeding the high end of our guidance range for gross margin. Q4 bookings doubled sequentially to $107 million, bolstered by record-level orders for our Precision Surface Processing ("PSP") products. PSP has enabled us to significantly expand our footprint in the RF and MEMS markets and also gain entry into the high growth Advanced Packaging space. With focus and execution, we exceeded our 2015 revenue plans for PSP which contributed to annual revenue growth of 21 percent for the company," commented John R. Peeler, Chairman and Chief Executive Officer.

"Entering 2016, we continue to face a weak macro-economic environment and challenging LED industry conditions. As a result, we expect investments for Metal Organic Chemical Vapor Deposition ("MOCVD") equipment will remain soft through the first half of this year. During this time, we continue to strengthen our product portfolio and recently introduced the TurboDisc® K475i™ MOCVD reactor to complement our industry leading EPIK™ 700 MOCVD product. We remain focused on positioning the Company for long term growth and are encouraged by our prospects," Mr. Peeler concluded.

Guidance and Outlook

The following guidance is provided for Veeco's first quarter 2016:

  • Revenue is expected to be in the range of $70 million to $80 million
  • Adjusted EBITDA (loss) is expected to be in the range of ($9) million to ($5) million
  • GAAP earnings (loss) per share are expected to be in the range of ($0.62) to ($0.52)
  • Non-GAAP earnings (loss) per share are expected to be in the range of ($0.35) to ($0.25)

Please refer to the tables at the end of this press release for further details.

Conference Call Information

A conference call reviewing these results has been scheduled for today, February 22, 2016 starting at 5:00pm ET. To join the call, dial 1-888-438-5491 (toll free) or 1-719-785-1765 and use passcode 4400150. The call will also be webcast live on the Veeco website at ir.veeco.com. A replay of the webcast will be made available on the Veeco website beginning at 8:00pm ET this evening. We will post an accompanying slide presentation to our website prior to the beginning of the call.

About Veeco

Veeco's process equipment solutions enable the manufacture of LEDs, displays, power electronics, compound semiconductors, hard disk drives, semiconductors, MEMS and wireless chips. We are the leader in MOCVD, MBE, Ion Beam, Wet Etch single wafer processing and other advanced thin film process technologies. Our high performance systems drive innovation in energy efficiency, consumer electronics and network storage and allow our customers to maximize productivity and achieve lower cost of ownership. For information on our company, products and worldwide service and support, please visit www.veeco.com.

To the extent that this news release discusses expectations or otherwise makes statements about the future, such statements are forward-looking and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These factors include the risks discussed in the Business Description and Management's Discussion and Analysis sections of Veeco's Annual Report on Form 10-K for the year ended December 31, 2014 and in our subsequent quarterly reports on Form 10-Q, current reports on Form 8-K and press releases. Veeco does not undertake any obligation to update any forward-looking statements to reflect future events or circumstances after the date of such statements.

                                                                            
                                                                            
                  Veeco Instruments Inc. and Subsidiaries                   
              Condensed Consolidated Statements of Operations               
                  (In thousands, except per share amounts)                  
                                                                            
                              Three months ended       For the year ended   
                                 December 31,             December 31,      
                                                                            
                                                                            
                              2015         2014        2015        2014     
                           ------------ ------------ ---------- ------------
Net sales                  $   106,543  $   113,569  $ 477,038  $   392,873 
Cost of sales                   67,757       75,695    299,797      257,991 
                           ------------ ------------ ---------- ------------
Gross profit                    38,786       37,874    177,241      134,882 
                           ------------ ------------ ---------- ------------
Operating expenses, net:                                                    
 Selling, general, and                                                      
  administrative                21,036       24,490     90,188       89,760 
 Research and development       20,639       20,424     78,543       81,171 
 Amortization                    5,802        4,195     27,634       13,146 
 Restructuring                   1,170          884      4,679        4,394 
 Asset impairment                    —       55,306        126       58,170 
 Changes in contingent                                                      
  consideration                      —            —          —      (29,368)
 Other, net                         98       (2,848)      (697)      (3,182)
                           ------------ ------------ ---------- ------------
Total operating expenses,                                                   
 net                            48,745      102,451    200,473      214,091 
                           ------------ ------------ ---------- ------------
Operating income (loss)         (9,959)     (64,577)   (23,232)     (79,209)
 Interest income, net              145          314        586          855 
                           ------------ ------------ ---------- ------------
Income (loss) before income                                                 
 taxes                          (9,814)     (64,263)   (22,646)     (78,354)
Income tax expense                                                          
 (benefit)                         (26)      (7,351)     9,332      (11,414)
                           ------------ ------------ ---------- ------------
Net income (loss)          $    (9,788) $   (56,912) $ (31,978) $   (66,940)
                           ============ ============ ========== ============
                                                                            
Income (loss) per common                                                    
 share:                                                                     
 Basic                     $     (0.25) $     (1.44) $   (0.80) $     (1.70)
 Diluted                   $     (0.25) $     (1.44) $   (0.80) $     (1.70)
                                                                            
Weighted average number of                                                  
 shares:                                                                    
 Basic                                                                      
                                39,794       39,446     39,742       39,350 
 Diluted                                                                    
                                39,794       39,446     39,742       39,350 
                                                                            
                                                                            
                                                                            
                  Veeco Instruments Inc. and Subsidiaries                   
                   Condensed Consolidated Balance Sheets                    
                               (In thousands)                               
                                                                            
                                                                            
                                             December 31,     December 31,  
                                                 2015             2014      
                                           ---------------- ----------------
Assets                                                                      
Current assets:                                                             
 Cash and cash equivalents                 $        269,232 $        270,811
 Short-term investments                             116,050          120,572
 Restricted cash                                          —              539
 Accounts receivable, net                            49,524           60,085
 Inventories                                         77,469           61,471
 Deferred cost of sales                               2,100            5,076
 Prepaid expenses and other current assets           22,760           23,132
 Assets held for sale                                 5,000            6,000
 Deferred income taxes                                    —            7,976
                                           ---------------- ----------------
  Total current assets                              542,135          555,662
Property, plant and equipment, net                   79,590           78,752
Intangible assets, net                              131,674          159,308
Goodwill                                            114,908          114,959
Deferred income taxes                                 1,384            1,180
Other assets                                         21,098           19,594
                                           ---------------- ----------------
  Total assets                             $        890,789 $        929,455
                                           ================ ================
                                                                            
Liabilities and stockholders' equity                                        
Current liabilities:                                                        
 Accounts payable                          $         30,074 $         18,111
 Accrued expenses and other current                                         
  liabilities                                        49,393           48,418
 Customer deposits and deferred revenue              76,216           96,004
 Income taxes payable                                 6,208            5,441
 Deferred income taxes                                    —              120
 Current portion of long-term debt                      340              314
                                           ---------------- ----------------
  Total current liabilities                         162,231          168,408
Deferred income taxes                                11,211           16,397
Long-term debt                                        1,193            1,533
Other liabilities                                     1,539            4,185
                                           ---------------- ----------------
  Total liabilities                                 176,174          190,523
                                                                            
  Total stockholders' equity                        714,615          738,932
                                           ---------------- ----------------
                                                                            
   Total liabilities and stockholders'                                      
    equity                                 $        890,789 $        929,455
                                           ================ ================
                                                                            
                                                                            
                                                                            
                  Veeco Instruments Inc. and Subsidiaries                   
             Reconciliation of GAAP to Non-GAAP Financial Data              
                   (In thousands, except per share data)                    
                                (Unaudited)                                 
                                                                            
                                   Non-GAAP Adjustments                     
                           -------------------------------------            
  Three months                                                              
      ended                                                                 
  December 31,              Share-based  Acquisition                        
      2015         GAAP    Compensation    Related      Other      Non-GAAP 
---------------- --------- ------------- ------------ ----------   ---------
Net sales        $106,543  $          —  $         —  $       —    $106,543 
Cost of sales      67,757          (393)           —          —      67,364 
                 --------- ------------- ------------ ----------   ---------
Gross profit       38,786           393            —          —      39,179 
 Gross margin        36.4%                                             36.8%
Operating                                                                   
 expenses, net:                                                             
 Selling,                                                                   
  general, and                                                              
  administrative   21,036        (2,277)        (188)         —      18,571 
 Research and                                                               
  development      20,639        (1,292)           —          —      19,347 
 Amortization       5,802             —       (5,802)         —           — 
 Restructuring      1,170             —            —     (1,170)          — 
 Other, net            98             —            —          —          98 
                 --------- ------------- ------------ ----------   ---------
Total operating                                                             
 expenses, net     48,745        (3,569)      (5,990)    (1,170)     38,016 
                 --------- ------------- ------------ ----------   ---------
Operating income                                                            
 (loss)            (9,959)        3,962        5,990      1,170       1,163 
 Interest                                                                   
  income, net         145             —            —          —         145 
                 --------- ------------- ------------ ----------   ---------
Income (loss)                                                               
 before income                                                              
 taxes             (9,814)        3,962        5,990      1,170       1,308 
Income tax                                                                  
 expense                                                                    
 (benefit)            (26)            —            —       760  (a)     734 
                 --------- ------------- ------------ ----------   ---------
Net income                                                                  
 (loss)          $ (9,788) $      3,962  $     5,990  $     410    $    574 
                 ========= ============= ============ ==========   =========
                                                                            
Income (loss)                                                               
 per common                                                                 
 share:                                                                     
 Basic earnings                                                             
  per share      $  (0.25)                                         $   0.01 
                                                     =                      
 Diluted                                                                    
  earnings per                                                              
  share          $  (0.25)                                         $   0.01 
                                                                            
Weighted average                                                            
 number of                                                                  
 shares:                                                                    
 Basic shares      39,794                                            40,644 
 Diluted shares    39,794                                            40,731 
                                                                            
Non-GAAP                                                                    
 operating                                                                  
 income                                                            $  1,163 
 Depreciation                                                         3,282 
                                                                   ---------
  Adjusted                                                                  
   EBITDA                                                          $  4,445 
                                                                   =========
                                                                            
Note:  Amounts may not calculate precisely due to rounding.                 
                                                                            
(a) Primarily due to a change in deferred tax liabilities related to the PSP
acquisition.                                                                
                                                                            
This table includes financial measures adjusted for the impact of certain   
items; these financial measures are therefore not calculated in accordance  
with U.S. generally accepted accounting principles ("GAAP"). These Non-GAAP 
financial measures exclude items such as: share-based compensation expense; 
nonrecurring charges relating to restructuring initiatives, non-cash asset  
impairments, certain other non-operating gains and losses, and acquisition- 
related items such as one-time transaction costs, non-cash amortization of  
acquired intangible assets, incremental nonrecurring compensation, and the  
stepped-up cost of sales associated with the purchase accounting of acquired
inventory.                                                                  
                                                                            
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 as a substitute for, or superior to, measures of financial       
performance prepared in accordance with GAAP. By excluding these items, Non-
GAAP financial measures are intended to facilitate meaningful comparisons to
historical operating results, competitors' operating results, and estimates 
made by securities analysts. Management is evaluated on key performance     
metrics including adjusted EBITDA, which is used to determine management    
incentive compensation as well as forecast future periods. These Non-GAAP   
financial measures may be useful to investors in allowing for greater       
transparency of supplemental information used by management in its financial
and operational decision-making. In addition, similar Non-GAAP financial    
measures have historically been reported to investors; the inclusion of     
comparable numbers provides consistency in financial reporting. Investors   
are encouraged to review the reconciliation of the Non-GAAP financial       
measures used in this news release to their most directly comparable GAAP   
financial measures.                                                         
                                                                            
                                                                            
                                                                            
                  Veeco Instruments Inc. and Subsidiaries                   
             Reconciliation of GAAP to Non-GAAP Financial Data              
                   (In thousands, except per share data)                    
                                (Unaudited)                                 
                                                                            
                                  Non-GAAP Adjustments                      
                          -------------------------------------             
  Three months                                                              
     ended                                                                  
  December 31,             Share-based  Acquisition                         
      2014        GAAP    Compensation    Related       Other      Non-GAAP 
--------------- --------- ------------- ------------   ---------   ---------
Net sales       $113,569  $          —  $         —    $      —    $113,569 
Cost of sales     75,695          (657)      (5,175)(a)       —      69,863 
                --------- ------------- ------------   ---------   ---------
Gross profit      37,874           657        5,175           —      43,706 
 Gross margin       33.3%                                              38.5%
Operating                                                                   
 expenses:                                                                  
 Selling,                                                                   
  general, and                                                              
  administrativ                                                             
  e               24,490        (2,667)      (3,242)(b)       —      18,581 
 Research and                                                               
  development     20,424        (1,185)           —           —      19,239 
 Amortization      4,195             —       (4,195)          —           — 
 Restructuring       884             —            —        (884)          — 
 Asset                                                                      
  impairment      55,306             —            —     (55,306)          — 
 Other, net       (2,848)            —            —       3,142 (c)     294 
                --------- ------------- ------------   ---------   ---------
Total operating                                                             
 expenses, net   102,451        (3,852)      (7,437)    (53,048)     38,114 
                --------- ------------- ------------   ---------   ---------
Operating                                                                   
 income (loss)   (64,577)        4,509       12,612      53,048       5,592 
 Interest                                                                   
  income, net        314             —            —           —         314 
                --------- ------------- ------------   ---------   ---------
Income (loss)                                                               
 before income                                                              
 taxes           (64,263)        4,509       12,612      53,048       5,906 
Income tax                                                                  
 expense                                                                    
 (benefit)        (7,351)            —        2,705 (d)   5,428 (e)     782 
                --------- ------------- ------------   ---------   ---------
Net income                                                                  
 (loss)         $(56,912) $      4,509  $     9,907    $ 47,620    $  5,124 
                ========= ============= ============   ========    =========
                                                                            
Income (loss)                                                               
 per common                                                                 
 share:                                                                     
 Basic earnings                                                             
  per share     $  (1.44)                                          $   0.13 
 Diluted                                                                    
  earnings per                                                              
  share         $  (1.44)                                          $   0.13 
                                                                            
Weighted                                                                    
 average number                                                             
 of shares:                                                                 
 Basic shares     39,446                                             39,446 
 Diluted shares   39,446                                             40,072 
                                                                            
Non-GAAP                                                                    
 operating                                                                  
 income                                                            $  5,592 
 Depreciation                                                         2,728 
                                                                   ---------
  Adjusted                                                                  
   EBITDA                                                          $  8,320 
                                                                   =========
                                                                            
Note:  Amounts may not calculate precisely due to rounding.                 
                                                                            
(a) The inventory fair value step-up associated with the PSP acquisition's  
purchase accounting.                                                        
(b) One-time PSP acquisition related transaction costs.                     
(c) One-time cumulative translation gain related to the liquidation of our  
Japanese subsidiary.                                                        
(d) Valuation allowance reversal associated with the recognition of deferred
tax liabilities related to the PSP acquisition.                             
(e) $4.9 million tax liability reversal related to an incentive tax rate in 
a foreign subsidiary as well as utilization of the 'with or without' method.
                                                                            
This table includes financial measures adjusted for the impact of certain   
items; these financial measures are therefore not calculated in accordance  
with U.S. generally accepted accounting principles ("GAAP"). These Non-GAAP 
financial measures exclude items such as: share-based compensation expense; 
nonrecurring charges relating to restructuring initiatives, non-cash asset  
impairments, certain other non-operating gains and losses, and acquisition- 
related items such as one-time transaction costs, non-cash amortization of  
acquired intangible assets, incremental nonrecurring compensation, and the  
stepped-up cost of sales associated with the purchase accounting of acquired
inventory.                                                                  
                                                                            
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 as a substitute for, or superior to, measures of financial       
performance prepared in accordance with GAAP. By excluding these items, Non-
GAAP financial measures are intended to facilitate meaningful comparisons to
historical operating results, competitors' operating results, and estimates 
made by securities analysts. Management is evaluated on key performance     
metrics including adjusted EBITDA, which is used to determine management    
incentive compensation as well as forecast future periods. These Non-GAAP   
financial measures may be useful to investors in allowing for greater       
transparency of supplemental information used by management in its financial
and operational decision-making. In addition, similar Non-GAAP financial    
measures have historically been reported to investors; the inclusion of     
comparable numbers provides consistency in financial reporting. Investors   
are encouraged to review the reconciliation of the Non-GAAP financial       
measures used in this news release to their most directly comparable GAAP   
financial measures.                                                         
                                                                            
                                                                            
                                                                            
                  Veeco Instruments Inc. and Subsidiaries                   
             Reconciliation of GAAP to Non-GAAP Financial Data              
                   (In thousands, except per share data)                    
                                (Unaudited)                                 
                                                                            
                                  Non-GAAP Adjustments                      
  For the year                                                              
     ended                                                                  
  December 31,             Share-based  Acquisition                         
      2015        GAAP    Compensation    Related       Other      Non-GAAP 
--------------- --------- ------------- ------------   ---------   ---------
Net sales       $477,038  $          —  $         —    $      —    $477,038 
Cost of sales    299,797        (2,495)      (1,311)(a)       —     295,991 
                --------- ------------- ------------   ---------   ---------
Gross profit     177,241         2,495        1,311           —     181,047 
 Gross margin       37.2%                                              38.0%
Operating                                                                   
 expenses, net:                                                             
 Selling,                                                                   
  general, and                                                              
  administrativ                                                             
  e               90,188       (11,474)        (563)          —      78,151 
 Research and                                                               
  development     78,543        (4,031)           —           —      74,512 
 Amortization     27,634             —      (27,634)          —           — 
 Restructuring     4,679             —            —      (4,679)          — 
 Asset                                                                      
  impairment         126             —            —        (126)          — 
 Other, net         (697)            —            —        (395)(b)  (1,092)
Total operating                                                             
 expenses, net   200,473       (15,505)     (28,197)     (5,200)    151,571 
                --------- ------------- ------------   ---------   ---------
Operating                                                                   
 income (loss)   (23,232)       18,000       29,508       5,200      29,476 
 Interest                                                                   
  income, net        586             —            —           —         586 
                --------- ------------- ------------   ---------   ---------
Income (loss)                                                               
 before income                                                              
 taxes           (22,646)       18,000       29,508       5,200      30,062 
Income tax                                                                  
 expense                                                                    
 (benefit)         9,332             —            —      (1,334)(c)   7,998 
                --------- ------------- ------------   ---------   ---------
Net income                                                                  
 (loss)         $(31,978) $     18,000  $    29,508    $  6,534    $ 22,064 
                ========= ============= ============   =========   =========
                                                                            
Income (loss)                                                               
 per common                                                                 
 share:                                                                     
 Basic earnings                                                             
  per share     $  (0.80)                                          $   0.54 
 Diluted                                                                    
  earnings per                                                              
  share         $  (0.80)                                          $   0.54 
                                                                            
Weighted                                                                    
 average number                                                             
 of shares:                                                                 
 Basic shares     39,742                                             40,759 
 Diluted shares   39,742                                             40,905 
                                                                            
Non-GAAP                                                                    
 operating                                                                  
 income                                                            $ 29,476 
 Depreciation                                                        12,216 
  Adjusted                                                                  
   EBITDA                                                          $ 41,692 
                                                                   =========
                                                                            
Note:  Amounts may not calculate precisely due to rounding.                 
                                                                            
(a) The inventory fair value step-up associated with the PSP acquisition's  
purchase accounting.                                                        
(b) The non-GAAP adjustment relates to a nonrecurring legal settlement.     
(c) Primarily due to a change in deferred tax liabilities related to the PSP
acquisition.                                                                
                                                                            
This table includes financial measures adjusted for the impact of certain   
items; these financial measures are therefore not calculated in accordance  
with U.S. generally accepted accounting principles ("GAAP"). These Non-GAAP 
financial measures exclude items such as: share-based compensation expense; 
nonrecurring charges relating to restructuring initiatives, non-cash asset  
impairments, certain other non-operating gains and losses, and acquisition- 
related items such as one-time transaction costs, non-cash amortization of  
acquired intangible assets, incremental nonrecurring compensation, and the  
stepped-up cost of sales associated with the purchase accounting of acquired
inventory.                                                                  
                                                                            
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 as a substitute for, or superior to, measures of financial       
performance prepared in accordance with GAAP. By excluding these items, Non-
GAAP financial measures are intended to facilitate meaningful comparisons to
historical operating results, competitors' operating results, and estimates 
made by securities analysts. Management is evaluated on key performance     
metrics including adjusted EBITDA, which is used to determine management    
incentive compensation as well as forecast future periods. These Non-GAAP   
financial measures may be useful to investors in allowing for greater       
transparency of supplemental information used by management in its financial
and operational decision-making. In addition, similar Non-GAAP financial    
measures have historically been reported to investors; the inclusion of     
comparable numbers provides consistency in financial reporting. Investors   
are encouraged to review the reconciliation of the Non-GAAP financial       
measures used in this news release to their most directly comparable GAAP   
financial measures.                                                         
                                                                            
                                                                            
                                                                            
                  Veeco Instruments Inc. and Subsidiaries                   
             Reconciliation of GAAP to Non-GAAP Financial Data              
                   (In thousands, except per share data)                    
                                (Unaudited)                                 
                                                                            
                                  Non-GAAP Adjustments                      
                          --------------------------------------            
  For the year                                                              
     ended                                                                  
  December 31,             Share-based  Acquisition                         
      2014        GAAP    Compensation    Related       Other      Non-GAAP 
--------------- --------- ------------- ------------   ---------   ---------
Net sales       $392,873  $          —  $         —    $      —    $392,873 
Cost of sales    257,991        (2,456)      (5,175)(a)       —     250,360 
Gross profit     134,882         2,456        5,175           —     142,513 
 Gross margin       34.3%                                              36.3%
Operating                                                                   
 expenses, net:                                                             
 Selling,                                                                   
  general, and                                                              
  administrativ                                                             
  e               89,760       (11,859)      (3,242)(b)       —      74,659 
 Research and                                                               
  development     81,171        (4,498)           —           —      76,673 
 Amortization     13,146             —      (13,146)          —           — 
 Restructuring     4,394             —            —      (4,394)          — 
 Asset                                                                      
  impairment      58,170             —            —     (58,170)          — 
 Changes in                                                                 
  contingent                                                                
  consideration  (29,368)            —            —      29,368           — 
 Other, net       (3,182)            —            —       3,142 (c)     (40)
                --------- ------------- ------------   ---------   ---------
Total operating                                                             
 expenses, net   214,091       (16,357)     (16,388)    (30,054)    151,292 
                --------- ------------- ------------   ---------   ---------
Operating                                                                   
 income (loss)   (79,209)       18,813       21,563      30,054      (8,779)
 Interest                                                                   
  income, net        855             —            —           —         855 
                --------- ------------- ------------   ---------   ---------
Income (loss)                                                               
 before income                                                              
 taxes           (78,354)       18,813       21,563      30,054      (7,924)
Income tax                                                                  
 expense                                                                    
 (benefit)       (11,414)            —        2,705 (d)   4,908 (e)  (3,801)
                --------- ------------- ------------   ---------   ---------
Net income                                                                  
 (loss)         $(66,940) $     18,813  $    18,858    $ 25,146    $ (4,123)
                --------- ------------- ------------   ---------   ---------
                                                                            
Income (loss)                                                               
 per common                                                                 
 share:                                                                     
 Basic earnings                                                             
  per share     $  (1.70)                                          $  (0.10)
 Diluted                                                                    
  earnings per                                                              
  share         $  (1.70)                                          $  (0.10)
                                                                            
Weighted                                                                    
 average number                                                             
 of shares:                                                                 
 Basic shares     39,350                                             39,350 
 Diluted shares   39,350                                             39,350 
                                                                            
Non-GAAP                                                                    
 operating                                                                  
 income (loss)                                                     $ (8,779)
 Depreciation                                                        11,426 
                                                                   ---------
  Adjusted                                                                  
   EBITDA                                                          $  2,647 
                                                                   ---------
                                                                            
Note:  Amounts may not calculate precisely due to rounding.                 
                                                                            
(a) The inventory fair value step-up associated with the PSP acquisition's  
purchase accounting.                                                        
(b) One-time PSP acquisition related transaction costs.                     
(c) One-time cumulative translation gain related to the liquidation of our  
Japanese subsidiary.                                                        
(d) Valuation allowance reversal associated with the recognition of deferred
tax liabilities related to the PSP acquisition.                             
(e) $4.9 million tax liability reversal related to an incentive tax rate in 
a foreign subsidiary as well as utilization of the 'with or without' method.
                                                                            
This table includes financial measures adjusted for the impact of certain   
items; these financial measures are therefore not calculated in accordance  
with U.S. generally accepted accounting principles ("GAAP"). These Non-GAAP 
financial measures exclude items such as: share-based compensation expense; 
nonrecurring charges relating to restructuring initiatives, non-cash asset  
impairments, certain other non-operating gains and losses, and acquisition- 
related items such as one-time transaction costs, non-cash amortization of  
acquired intangible assets, incremental nonrecurring compensation, and the  
stepped-up cost of sales associated with the purchase accounting of acquired
inventory.                                                                  
                                                                            
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 as a substitute for, or superior to, measures of financial       
performance prepared in accordance with GAAP. By excluding these items, Non-
GAAP financial measures are intended to facilitate meaningful comparisons to
historical operating results, competitors' operating results, and estimates 
made by securities analysts. Management is evaluated on key performance     
metrics including adjusted EBITDA, which is used to determine management    
incentive compensation as well as forecast future periods. These Non-GAAP   
financial measures may be useful to investors in allowing for greater       
transparency of supplemental information used by management in its financial
and operational decision-making. In addition, similar Non-GAAP financial    
measures have historically been reported to investors; the inclusion of     
comparable numbers provides consistency in financial reporting. Investors   
are encouraged to review the reconciliation of the Non-GAAP financial       
measures used in this news release to their most directly comparable GAAP   
financial measures.                                                         
                                                                            
                                                                            
                                                                            
                  Veeco Instruments Inc. and Subsidiaries                   
             Reconciliation of GAAP to Non-GAAP Financial Data              
                    (In millions, except per share data)                    
                                (Unaudited)                                 
                                                                            
                                    Non-GAAP Adjustments                    
Guidance for the                                                            
   three months                                                             
 ended March 31,                   Share-based Acquisition                  
      2016            GAAP        Compensation   Related       Non-GAAP     
                ----------------  ------------ ----------- ---------------- 
Net sales       $   70  - $   80  $          - $         - $   70  - $   80 
                                                                            
Gross profit        25  -     30             1           -     26  -     31 
 Gross margin       36% -     38%                              37% -     39%
                                                                            
                                                                            
Operating income   (23) -    (19)            5           5    (13) -     (9)
 Depreciation                                                   4         4 
  Adjusted                                                                  
   EBITDA                                                  $   (9) - $   (5)
                                                           =======   =======
                                                                            
                                                                            
Net income                                                                  
 (loss)            (24) -    (20)            5           5    (14) -    (10)
                                                                            
Income (loss)                                                               
 per diluted                                                                
 common share   $(0.62) - $(0.52)                          $(0.35) - $(0.25)
                =======   =======                          =======   =======
 Weighted                                                                   
  average number                                                            
  of shares         39        39                               39        39 
                                                                            
Note:  Amounts may not calculate precisely due to rounding.                 
                                                                            
This table includes financial measures adjusted for the impact of certain   
items; these financial measures are therefore not calculated in accordance  
with U.S. generally accepted accounting principles ("GAAP"). These Non-GAAP 
financial measures exclude items such as: share-based compensation expense; 
nonrecurring charges relating to restructuring initiatives, non-cash asset  
impairments, certain other non-operating gains and losses, and acquisition- 
related items such as one-time transaction costs, non-cash amortization of  
acquired intangible assets, incremental nonrecurring compensation, and the  
stepped-up cost of sales associated with the purchase accounting of acquired
inventory.                                                                  
                                                                            
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 as a substitute for, or superior to, measures of financial       
performance prepared in accordance with GAAP. By excluding these items, Non-
GAAP financial measures are intended to facilitate meaningful comparisons to
historical operating results, competitors' operating results, and estimates 
made by securities analysts. Management is evaluated on key performance     
metrics including adjusted EBITDA, which is used to determine management    
incentive compensation as well as forecast future periods. These Non-GAAP   
financial measures may be useful to investors in allowing for greater       
transparency of supplemental information used by management in its financial
and operational decision-making. In addition, similar Non-GAAP financial    
measures have historically been reported to investors; the inclusion of     
comparable numbers provides consistency in financial reporting. Investors   
are encouraged to review the reconciliation of the Non-GAAP financial       
measures used in this news release to their most directly comparable GAAP   
financial measures.                                                         

Veeco Contacts:

Investors:
Shanye Hudson
516-677-0200 x1272 
shudson@veeco.com

Media:
Jeffrey Pina
516-677-0200 x1222
jpina@veeco.com


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