AP NEWS

Veeco Reports Fourth Quarter and Fiscal Year 2018 Financial Results

February 11, 2019

Fourth Quarter 2018 Highlights:

-- Revenues of $99.0 million, compared with $139.7 million in the same period last year -- GAAP net loss of $144.7 million, or $3.11 loss per diluted share -- Non-GAAP net loss of $7.5 million, or $0.16 loss per diluted share

PLAINVIEW, N.Y., Feb. 11, 2019 (GLOBE NEWSWIRE) -- Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its fourth quarter and fiscal year ended December 31, 2018. 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 ’18 Q4 ’17 2018 2017 --------------------------------- ---------- --------- -------- - ------- - Revenue $ 99.0 $ 139.7 $ 542.1 $ 475.7 Net income (loss) $ (144.7 ) $ (8.5 ) $ (407.1 ) $ (51.4 ) Diluted earnings (loss) per share $ (3.11 ) $ (0.18 ) $ (8.63 ) $ (1.16 )

4th Quarter Full Year ----------------- -------------- Non-GAAP Results Q4 ’18 Q4 ’17 2018 2017 --------------------------------- --------- ------ ------ ------ Net income (loss) $ (7.5 ) $ 6.0 $ 14.2 $ 16.8 Operating income (loss) $ (6.9 ) $ 7.3 $ 23.2 $ 23.2 Diluted earnings (loss) per share $ (0.16 ) $ 0.13 $ 0.30 $ 0.38

Based on a reduction in Veeco’s stock price during the fourth quarter, the Company recorded a goodwill impairment charge of $123 million for GAAP results. This is a non-cash charge and does not affect liquidity, day to day operations or Non-GAAP results of the company.

“Commoditization of the MOCVD market for LEDs in China has reduced our revenue significantly, and is reflected in our fourth quarter results,” commented William J. Miller, Ph.D., Chief Executive Officer. “However, we are excited about our future as we see order activity in leading edge, Front-End Semiconductor and exciting growth opportunities in Compound Semiconductor and Advanced Packaging.”

Guidance and Outlook

The following guidance is provided for Veeco’s first quarter 2019:

-- Revenue is expected in the range of $85 million to $105 million -- Non-GAAP operating income (loss) is expected in the range of ($12) million to ($3) million -- GAAP earnings (loss) per share are expected in the range of ($0.59) to ($0.39) -- Non-GAAP earnings (loss) per share are expected in the range of ($0.30) to ($0.10)

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 11, 2019 starting at 5:00pm ET. To join the call, dial 1-800-239-9838 (toll free) or 1-929-477-0448 and use passcode 8815152. 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 beginning at 8:00pm ET this evening. We will post an accompanying slide presentation to our website prior to the beginning of the call.

New Accounting Standard

The Company adopted the new accounting standard, ASC 606, related to revenue recognition, effective January 1, 2018. The prior periods presented here have been recast to reflect the adoption of this new standard.

About Veeco

Veeco (NASDAQ: VECO) is a leading manufacturer of innovative semiconductor process equipment. Our proven MOCVD, lithography, laser annealing, ion beam and single wafer etch & clean technologies play an integral role in producing LEDs for solid-state lighting and displays, and in the fabrication of advanced semiconductor devices. With equipment designed to maximize performance, yield and cost of ownership, Veeco holds technology leadership positions in all these served markets. To learn more about Veeco’s innovative equipment and services, visit www.veeco.com.

Forward-looking Statements

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, 2017 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.

-financial tables attached-

Veeco Contacts:

Investors: Anthony Bencivenga 516-677-0200 x1272 abencivenga@veeco.com

Media:David Pinto 408-325-6157 dpinto@veeco.com

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

Three months ended Year ended December 31, December 31, ------------------------- ------------------------- 2018 2017 2018 2017 ---------- - --------- - ---------- - --------- - Net sales $ 98,972 $ 139,661 $ 542,082 $ 475,686 Cost of sales 63,713 84,309 348,363 299,458 - -------- - - ------- - - -------- - - ------- - Gross profit 35,259 55,352 193,719 176,228 - -------- - - ------- - - -------- - - ------- - Operating expenses, net: Research and development 24,962 24,318 97,755 81,987 Selling, general, and administrative 21,218 28,675 92,060 100,250 Amortization of intangible assets 4,249 13,753 32,351 35,475 Restructuring 887 2,246 8,556 11,851 Acquisition costs 53 1,510 2,959 17,786 Asset impairment 122,829 — 375,172 1,139 Other, net 42 (165 ) 368 (392 ) - -------- - - ------- - - -------- - - ------- - Total operating expenses, net 174,240 70,337 609,221 248,096 - -------- - - ------- - - -------- - - ------- - Operating income (loss) (138,981 ) (14,985 ) (415,502 ) (71,868 ) Interest expense, net (4,485 ) (4,753 ) (18,332 ) (17,122 ) - -------- - - ------- - - -------- - - ------- - Income (loss) before income taxes (143,466 ) (19,738 ) (433,834 ) (88,990 ) Income tax expense (benefit) 1,208 (11,259 ) (26,746 ) (37,594 ) - -------- - - ------- - - -------- - - ------- - Net income (loss) $ (144,674 ) $ (8,479 ) $ (407,088 ) $ (51,396 ) - -------- - - ------- - - -------- - - ------- - Income (loss) per common share: Basic $ (3.11 ) $ (0.18 ) $ (8.63 ) $ (1.16 ) Diluted $ (3.11 ) $ (0.18 ) $ (8.63 ) $ (1.16 ) Weighted average number of shares: Basic 46,551 47,037 47,151 44,174 Diluted 46,551 47,037 47,151 44,174

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

December December 31, 31, 2018 2017 --------- ----------- Assets Current assets: Cash and cash equivalents $ 212,273 $ 279,736 Restricted cash 809 847 Short-term investments 48,189 47,780 Accounts receivable, net 66,808 98,866 Contract assets 10,397 160 Inventories 156,311 120,266 Deferred cost of sales 3,072 15,994 Prepaid expenses and other current assets 22,221 33,437 - ------- - --------- Total current assets 520,080 597,086 Property, plant and equipment, net 80,284 85,058 Intangible assets, net 85,149 369,843 Goodwill 184,302 307,131 Deferred income taxes 1,869 3,047 Other assets 29,132 25,310 - ------- - --------- Total assets $ 900,816 $ 1,387,475 - ------- - --------- Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 39,611 $ 50,318 Accrued expenses and other current liabilities 46,450 58,068 Customer deposits and deferred revenue 72,736 112,032 Income taxes payable 1,256 3,846 - ------- - --------- Total current liabilities 160,053 224,264 Deferred income taxes 5,690 36,845 Long-term debt 287,392 275,630 Other liabilities 9,906 10,643 - ------- - --------- Total liabilities 463,041 547,382 Total stockholders’ equity 437,775 840,093 - ------- - --------- Total liabilities and stockholders’ equity $ 900,816 $ 1,387,475 - ------- - ---------

Veeco Instruments Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Financial Data(in thousands, except per share amounts) (unaudited)

Non-GAAP Adjustments --------------------------------- Share-Bas ed Three months ended December 31, 2018 GAAP Compensat Amortization Other Non-GAAP ion ----------------------------------------------- ------------ -------- ------------ --------- ---------- Net sales $ 98,972 $ 98,972 Gross profit 35,259 282 134 35,675 Gross margin 35.6 % 36.0 % Research and development 24,962 (883 ) 24,079 Selling, general, and administrative and Other, 21,260 (2,024 ) (723 ) 18,513 net Net income (loss) (144,674 ) 3,353 4,249 129,532 (7,540 ) Income (loss) per common share: Basic $ (3.11 ) $ (0.16 ) Diluted (3.11 ) (0.16 ) Weighted average number of shares: Basic 46,551 46,551 Diluted 46,551 46,551

Veeco Instruments Inc. and SubsidiariesOther Non-GAAP Adjustments(in thousands) (unaudited)

Three months ended December 31, 2018 ----------------------------------------------------------------------------------------------- Restructuring 722 Acquisition related 53 Release of inventory fair value step-up associated with the Ultratech purchase accounting 70 Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 190 Accelerated depreciation 597 Asset impairment 122,829 Non-cash interest expense 3,023 Non-GAAP tax adjustment * 2,048 ------- Total Other 129,532 ___________________________ * - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.

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 (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.

Veeco Instruments Inc. and SubsidiariesReconciliation of GAAP to Non-GAAP Financial Data(in thousands, except per share amounts)(unaudited)

Non-GAAP Adjustments -------------------------------- Share-bas ed Three months ended December 31, 2017 GAAP Compensat Amortization Other Non-GAAP ion ----------------------------------------------- --------- -------- ------------ -------- --------- Net sales $ 139,661 $ 139,661 Gross profit 55,352 607 537 56,496 Gross margin 39.6 % 40.5 % Research and development 24,318 (971 ) 23,347 Selling, general, and administrative and Other, 28,510 (2,668 ) (196 ) 25,646 net Net income (loss) (8,479 ) 4,220 13,753 (3,460 ) 6,034 Income (loss) per common share: Basic $ (0.18 ) $ 0.13 Diluted (0.18 ) 0.13 Weighted average number of shares: Basic 47,037 47,109 Diluted 47,037 47,208

Veeco Instruments Inc. and SubsidiariesOther Non-GAAP Adjustments(in thousands) (unaudited)

Three months ended December 31, 2017 ----------------------------------------------------------------------------------------- Restructuring 2,073 Acquisition related 1,510 Release of inventory fair value step-up associated with the Ultratech purchase accounting 440 Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 293 Non-cash interest expense 2,805 Non-GAAP tax adjustment * (10,581 ) ------- - Total Other (3,460 ) ___________________________ * - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments, as well as the exclusion of certain tax benefits attributed to the change in U.S. tax laws.

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 (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.

Veeco Instruments Inc. and SubsidiariesReconciliation of GAAP Net Income (loss) to Non-GAAP Operating Income (loss)(in thousands) (unaudited)

Three months Three ended months ended December 31, December 2018 31, 2017 ------------ ----------- GAAP Net income (loss) $ (144,674 ) $ (8,479 ) Share-based compensation 3,353 4,220 Amortization 4,249 13,753 Restructuring 722 2,073 Acquisition related 53 1,510 Release of inventory fair value step-up associated with the Ultratech purchase 70 440 accounting Depreciation of PP&E fair value step-up associated with the Ultratech purchase 190 293 accounting Accelerated depreciation 597 — Asset impairment 122,829 — Interest (income) expense 4,485 4,753 Income tax expense (benefit) 1,208 (11,259 ) - -------- - - ------- - Non-GAAP Operating income (loss) $ (6,918 ) $ 7,304 - -------- - - ------- -

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, 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 (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.

Veeco Instruments Inc. and SubsidiariesReconciliation of GAAP to Non-GAAP Financial Data(in thousands, except per share amounts)(unaudited)

Non-GAAP Adjustments --------------------------------- Share-bas ed For the year ended December 31, 2018 GAAP Compensat Amortization Other Non-GAAP ion ---------------------------------------------- ---------- -------- ------------ --------- --------- Net sales $ 542,082 $ 542,082 Gross profit 193,719 1,885 2,849 198,453 Gross margin 35.7 % 36.6 % Research and development 97,755 (3,611 ) 94,144 Selling, general, and administrative and Other 92,428 (9,417 ) (1,863 ) 81,148 Net income (loss) (407,088 ) 16,074 32,351 372,862 14,199 Income (loss) per common share: Basic $ (8.63 ) $ 0.30 Diluted (8.63 ) 0.30 Weighted average number of shares: Basic 47,151 47,171 Diluted 47,151 47,199

Veeco Instruments Inc. and SubsidiariesOther Non-GAAP Adjustments(in thousands)(unaudited)

For the year ended December 31, 2018 ----------------------------------------------------------------------------------------------- Restructuring 7,395 Acquisition related 2,959 Release of inventory fair value step-up associated with the Ultratech purchase accounting 2,516 Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 1,011 Accelerated depreciation 1,184 Asset impairment 375,172 Non-cash interest expense 11,762 Non-GAAP tax adjustment * (29,137 ) ------- - Total Other 372,862 ___________________________ * - The ‘with or without’ method is utilized to determine the income tax effect of all non-GAAP adjustments.

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, 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 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.

Veeco Instruments Inc. and SubsidiariesReconciliation of GAAP to Non-GAAP Financial Data(in thousands, except per share amounts)(unaudited)

Non-GAAP Adjustments --------------------------------- Share-base d For the year ended December 31, 2017 GAAP Compensati Amortization Other Non-GAAP on ---------------------------------------------- --------- --------- ------------ -------- --------- Net sales $ 475,686 $ 475,686 Gross profit 176,228 2,505 10,075 188,808 Gross margin 37.0 % 39.7 % Research and development 81,987 (2,957 ) 79,030 Selling, general, and administrative and Other 99,858 (12,851 ) (466 ) 86,541 Net income (loss) (51,396 ) 24,396 35,475 8,368 16,843 Income (loss) per common share: Basic $ (1.16 ) $ 0.38 Diluted (1.16 ) 0.38 Weighted average number of shares: Basic 44,174 44,247 Diluted 44,174 44,486

Veeco Instruments Inc. and SubsidiariesOther Non-GAAP Adjustments(in thousands)(unaudited)

For the year ended December 31, 2017 -------------------------------------------------------------------------------------------------- Restructuring 9,971 Acquisition related 13,583 Release of inventory fair value step-up associated with the Ultratech purchase accounting 9,664 Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 695 Accelerated depreciation 180 Asset impairment 1,139 Non-cash interest expense 10,446 Non-GAAP tax adjustment * (37,310 ) ------- - Total Other 8,368 __________________________ * The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments, as well as the exclusion of certain tax benefits attributed to the change in U.S. tax laws and the release of FIN48 reserves.

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, 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 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.

Veeco Instruments Inc. and SubsidiariesReconciliation of GAAP Net Income (loss) to Non-GAAP Operating Income (loss)(in thousands)(unaudited)

Year ended Year ended December 31, December 2018 31, 2017 ------------ ----------- GAAP Net income (loss) $ (407,088 ) $ (51,396 ) Share-based compensation 16,074 24,396 Amortization 32,351 35,475 Restructuring 7,395 9,971 Acquisition related 2,959 13,583 Release of inventory fair value step-up associated with the Ultratech purchase 2,516 9,664 accounting Depreciation of PP&E fair value step-up associated with the Ultratech purchase 1,011 695 accounting Accelerated depreciation 1,184 180 Asset impairment 375,172 1,139 Interest (income) expense 18,332 17,122 Income tax expense (benefit) (26,746 ) (37,594 ) - -------- - - ------- - Non-GAAP Operating income (loss) $ 23,160 $ 23,235 - -------- - - ------- -

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 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.

Veeco Instruments Inc. and SubsidiariesReconciliation of GAAP to Non-GAAP Financial Data(in millions, except per share amounts)(unaudited)

Non-GAAP Adjustments --------------------------------- Share-based Guidance for the three months ending March 31, GAAP Compensation Amortization Other Non-GAAP 2019 ------------------------- ----------------------- ------------ ------------ ----- ----------------------- Net sales $ 85 - $ 105 $ 85 - $ 105 Gross profit 28 - 37 1 — — 29 - 38 Gross margin 33 % - 35 % 34 % - 36 % Net income (loss) $ (28 ) - $ (19 ) 4 4 6 $ (14 ) - $ (5 ) Income (loss) per diluted $ (0.59 ) - $ (0.39 ) $ (0.30 ) - $ (0.10 ) common share Weighted average number 47 47 47 47 of shares

Veeco Instruments Inc. and SubsidiariesReconciliation of GAAP Net Income (loss) to Non-GAAP Operating Income (Loss)(in millions) (unaudited)

Guidance for the three months ending March 31, 2019 --------------------------------------------------- GAAP Net income (loss) $ (28 ) - $ (19 ) Share-based compensation 4 - 4 Amortization 4 - 4 Restructuring 2 - 2 Interest expense, net 4 - 4 Income tax expense (benefit) 1 - 1 Other 1 - 1 - --- - - --- - Non-GAAP Operating income (loss) $ (12 ) - $ (3 ) - --- - - --- -

Note: Amounts may not calculate precisely due to rounding.

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 (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.

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