Veeco Reports Second Quarter 2016 Financial Results
/EINPresswire.com/ -- PLAINVIEW, NY--(Marketwired - August 01, 2016) -
Second Quarter 2016 Results Summary:
- Revenues of $75.3 million
- GAAP net loss per share of $0.82, includes a pre-tax charge of ~$16 million associated with the restructuring plans
- Non-GAAP net loss per share of $0.19
- Non-GAAP adjusted EBITDA of negative $2.8 million
Veeco Instruments Inc. (NASDAQ: VECO) today announced financial results for its second fiscal quarter ended June 30, 2016. 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.
Veeco Instruments Inc. and Subsidiaries
Press Release Summary - Financial Results
U.S. dollars in millions, except per share data
----------------
GAAP Results Q2 '16 Q2 '15
---------------------------------------------------------
Revenue $ 75.3 $ 131.4
---------------------------------------------------------
Net income (loss) $(32.1) $ (8.4)
---------------------------------------------------------
Diluted earnings (loss) per share $(0.82) $(0.21)
---------------------------------------------------------
----------------
Non-GAAP Results Q2 '16 Q2 '15
---------------------------------------------------------
Net income (loss) $ (7.6) $ 8.4
---------------------------------------------------------
Adjusted EBITDA $ (2.8) $ 12.8
---------------------------------------------------------
Diluted earnings (loss) per share $(0.19) $ 0.20
---------------------------------------------------------
"Veeco closed out a difficult first half of 2016 delivering second quarter results which were in line with our expectations and underscore our focus on operational execution," commented John R. Peeler, Chairman and Chief Executive Officer.
"As previously communicated, we have taken decisive steps aimed at improving our through-cycle profitability by reducing fixed costs and streamlining our operations. This plan will enable us to lower our quarterly adjusted EBITDA breakeven level to between $75 and $80 million in revenue, without compromising our ability to capitalize on growth opportunities. Looking ahead, we see positive indications that should lead to a pick-up in demand for our Metal Organic Chemical Vapor Deposition ("MOCVD") equipment over the near term," Mr. Peeler concluded.
The restructuring plan involves the consolidation of three manufacturing operations and streamlining of field and administrative functions. The plan is expected to be substantially completed by the end of 2016 and to result in annualized savings of approximately $20 million starting in the first quarter of 2017. As a result of these actions, the company recorded a pre-tax charge of approximately $16 million in the second quarter.
Guidance and Outlook
The following guidance is provided for Veeco's third quarter 2016:
- Revenue is expected to be in the range of $70 million to $85 million
- GAAP Net Income (loss) is expected to be in the range of ($24) million to ($18) million and earnings (loss) per share is expected to be in the range of ($0.62) to ($0.46)
- Non-GAAP Net Income (loss) is expected to be in the range of ($10) million to ($4) million and earnings (loss) per share is expected to be in the range of ($0.26) to ($0.10)
- Adjusted EBITDA (loss) is expected to be in the range of ($6) million to breakeven
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, August 1, 2016 starting at 5:00pm ET. To join the call, dial 1-888-455-2296 (toll free) or 1-719-325-2454 and use passcode 7244577. 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, 2015 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)
(unaudited)
Three months ended June 30, Six months ended June 30,
2016 2015 2016 2015
------------- ------------- ------------- -------------
Net sales $ 75,348 $ 131,410 $ 153,359 $ 229,751
Cost of sales 43,909 82,341 89,964 145,545
------------- ------------- ------------- -------------
Gross profit 31,439 49,069 63,395 84,206
------------- ------------- ------------- -------------
Operating expenses,
net:
Selling, general,
and
administrative 19,995 24,365 39,834 47,247
Research and
development 21,543 20,119 43,653 38,704
Amortization 5,273 7,979 10,524 15,941
Restructuring 2,095 683 2,195 3,040
Asset impairment 13,627 - 13,627 126
Other, net 159 (51) 88 (1,002)
------------- ------------- ------------- -------------
Total operating
expenses, net 62,692 53,095 109,921 104,056
------------- ------------- ------------- -------------
Operating income
(loss) (31,253) (4,026) (46,526) (19,850)
Interest income,
net 185 119 453 280
------------- ------------- ------------- -------------
Income (loss) before
income taxes (31,068) (3,907) (46,073) (19,570)
Income tax expense
(benefit) 1,014 4,479 1,542 7,926
------------- ------------- ------------- -------------
Net income (loss) $ (32,082)$ (8,386)$ (47,615)$ (27,496)
============= ============= ============= =============
Income (loss) per
common share:
Basic $ (0.82)$ (0.21)$ (1.22)$ (0.69)
Diluted $ (0.82)$ (0.21)$ (1.22)$ (0.69)
Weighted average
number of shares:
Basic 38,965 39,693 39,035 39,666
Diluted 38,965 39,693 39,035 39,666
Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
June 30, 2016 December 31, 2015
----------------- -----------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 257,641 $ 269,232
Short-term investments 73,211 116,050
Accounts receivable, net 41,695 49,524
Inventories 90,771 77,469
Deferred cost of sales 2,590 2,100
Prepaid expenses and other current
assets 20,356 22,760
Assets held for sale 11,177 5,000
----------------- -----------------
Total current assets 497,441 542,135
Property, plant and equipment, net 62,981 79,590
Intangible assets, net 121,380 131,674
Goodwill 114,908 114,908
Deferred income taxes 1,384 1,384
Other assets 21,056 21,098
----------------- -----------------
Total assets $ 819,150 $ 890,789
================= =================
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 34,883 $ 30,074
Accrued expenses and other current
liabilities 35,113 49,393
Customer deposits and deferred revenue 65,753 76,216
Income taxes payable 654 6,208
Current portion of long-term debt 354 340
----------------- -----------------
Total current liabilities 136,757 162,231
Deferred income taxes 13,014 11,211
Long-term debt 1,013 1,193
Other liabilities 6,141 1,539
----------------- -----------------
Total liabilities 156,925 176,174
Total stockholders' equity 662,225 714,615
----------------- -----------------
Total liabilities and
stockholders' equity $ 819,150 $ 890,789
================= =================
Veeco Instruments Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Data
(in thousands, except per share amounts)
(unaudited)
Non-GAAP Adjustments
----------------------------------
Three months ended Share-based Non-
June 30, 2016 GAAP Compensation Amortization Other GAAP
---------------------- -------- ------------ ------------- ------ --------
Net sales $ 75,348 $ 75,348
Gross profit 31,439 486 31,925
Gross margin 41.7% 42.4%
Selling, general, and
administrative and
Other 20,154 (2,576) (62) 17,516
Research and
development 21,543 (940) 20,603
Net income (loss) (32,082) 4,002 5,273 15,222 (7,585)
Income (loss) per
common share:
Basic $ (0.82) $ (0.19)
Diluted (0.82) (0.19)
Weighted average
number of shares:
Basic 38,965 38,965
Diluted 38,965 38,965
Veeco Instruments Inc. and Subsidiaries
Other Non-GAAP Adjustments
(in thousands)
(unaudited)
Three months ended
June 30, 2016
----------------------
Asset impairment 13,627
Restructuring 2,095
Acquisition
related 62
Non-GAAP tax
adjustment * (562)
--------
Total Other 15,222
* - The 'with or without' method is utilized to determine the income tax
effect of all non-GAAP adjustments.
These 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; 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 incremental transaction-related
compensation.
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 adjusted EBITDA, 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.
Veeco Instruments Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Data
(in thousands, except per share amounts)
(unaudited)
Non-GAAP Adjustments
------------------------------
Three months ended June Share-based
30, 2015 GAAP Compensation Amortization Other Non-GAAP
----------------------- -------- ------------ ------------ ----- ---------
Net sales $131,410 $ 131,410
Gross profit 49,069 713 49,782
Gross margin 37.3% 37.9%
Selling, general, and
administrative and
Other 24,314 (3,112) (188) 21,014
Research and
development 20,119 (1,096) 19,023
Net income (loss) (8,386) 4,921 7,979 3,867 8,381
Income (loss) per
common share:
Basic $ (0.21) $ 0.21
Diluted (0.21) 0.20
Weighted average number
of shares:
Basic 39,693 40,790
Diluted 39,693 40,960
Veeco Instruments Inc. and Subsidiaries
Other Non-GAAP Adjustments
(in thousands)
(unaudited)
Three months ended June
30, 2015
-----------------------
Restructuring 683
Acquisition related 188
Non-GAAP tax
adjustment * 2,996
---------
Total Other 3,867
* - The 'with or without' method is utilized to determine the
income tax effect of all non-GAAP adjustments.
These 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; 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 incremental transaction-related
compensation.
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 adjusted EBITDA, 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.
Veeco Instruments Inc. and Subsidiaries
Reconciliation of GAAP Net Income (loss) to Adjusted EBITDA
(in thousands)
(unaudited)
Three months ended Three months ended
June 30, 2016 June 30, 2015
------------------- -------------------
GAAP Net income (loss) $ (32,082) $ (8,386)
Share-based compensation 4,002 4,921
Amortization 5,273 7,979
Asset impairment 13,627 -
Restructuring 2,095 683
Acquisition related 62 188
Interest (income) expense (185) (119)
Depreciation 3,424 3,022
Income tax expense (benefit) 1,014 4,479
------------------- -------------------
Adjusted EBITDA $ (2,770) $ 12,767
=================== ===================
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; 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 incremental transaction-related
compensation.
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 adjusted EBITDA, 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.
Veeco Instruments Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Data
(in millions, except per share amounts)
(unaudited)
Non-GAAP Adjustments
-------------------------------
Guidance for
the three
months ended
September Share-based
30, 2016 GAAP Compensation Amortization Other Non-GAAP
------------- -------------- ------------------------- ----- --------------
Net sales $ 70 -$ 85 $ 70 -$ 85
Gross profit 27 - 34 1 - - 28 - 35
Gross
margin 38%- 40% 39%- 41%
Net income
(loss) $ (24)-$ (18) 5 6 3 (10)- (4)
Income (loss)
per diluted
common share $(0.62)-$(0.46) $(0.26)-$(0.10)
Weighted
average
number
of
shares 39 39 39 39
Veeco Instruments Inc. and Subsidiaries
Reconciliation of GAAP Net Income (loss) to Adjusted EBITDA
(in millions)
(unaudited)
Guidance for
the three
months ended
September
30, 2016
-------------
GAAP Net
income
(loss) $ (24)-$ (18)
Share-based
compensation 5 - 5
Amortization 6 - 6
Other * 3 - 3
Interest
(income)
expense 0 - 0
Depreciation 3 - 3
Income tax
expense
(benefit) ** 1 - 1
------ -------
Adjusted
EBITDA $ (6)-$ -
====== =======
Note: Amounts may not calculate precisely due to rounding.
* - Other includes expenses associated with the termination of a defined
benefit plan and the restructuring plan.
** - The 'with or without' method is utilized to determine the income tax
effect of all non-GAAP adjustments.
These 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; 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 incremental transaction-related
compensation.
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 adjusted EBITDA, 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.
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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