AP NEWS
Press release content from Globe Newswire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

Veeco Reports First Quarter 2019 Financial Results

May 6, 2019

First Quarter 2019 Highlights:

-- Revenues of $99.4 million, compared with $158.6 million in the same period last year -- GAAP net loss of $18.5 million, or $0.40 loss per diluted share -- Non-GAAP net loss of $6.4 million, or $0.14 loss per diluted share

PLAINVIEW, N.Y., May 06, 2019 (GLOBE NEWSWIRE) -- Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its first quarter ended March 31, 2019. Results are reported in accordance with U.S. generally accepted accounting principles (“GAAP”) and are also reported adjusting for certain items (“Non-GAAP”). A reconciliation between GAAP and Non-GAAP operating results is provided at the end of this press release.

----------------------------------------------- U.S. Dollars in millions, except per share data -----------------------------------------------

GAAP Results Q1 ’19 Q1 ’18 --------------------------------- --------- --------- Revenue $ 99.4 $ 158.6 Net income (loss) $ (18.5 ) $ (15.8 ) Diluted earnings (loss) per share $ (0.40 ) $ (0.34 )

Non-GAAP Results Q1 ’19 Q1 ’18 --------------------------------- --------- ------- Net income (loss) $ (6.4 ) $ 9.2 Operating income (loss) $ (4.8 ) $ 11.3 Diluted earnings (loss) per share $ (0.14 ) $ 0.20

“We are executing according to our plan with Q1 revenue and EPS results above the midpoint of our guided range. Our transition away from the commodity LED business is largely complete and our revenue has stabilized. In addition, we are seeing strength in our Data Storage and EUV products driven by technology advancements,” commented William J. Miller, Ph.D., Chief Executive Officer.

“We also shipped the first ion beam deposition system for EUV mask-blank volume production in April. Looking ahead, we remain confident about growing our top line and returning to profitability,” concluded Dr. Miller.

Guidance and Outlook

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

-- Revenue is expected in the range of $90 million to $110 million -- GAAP earnings (loss) per share are expected in the range of ($0.47) to ($0.27) -- Non-GAAP earnings (loss) per share are expected in the range of ($0.18) to $0.02

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, May 6, 2019 starting at 5:30pm ET. To join the call, dial 1-888-204-4368 (toll free) or 1-929-477-0402 and use passcode 6759738. 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.

About Veeco

Veeco (NASDAQ: VECO) is an innovative manufacturer of semiconductor process equipment. Our proven MOCVD, lithography, laser annealing, ion beam, and single wafer etch & clean technologies play an integral role in the fabrication and packaging of advanced semiconductor devices. With equipment designed to maximize performance, yield and cost of ownership, Veeco holds leading technology positions in the markets we serve. To learn more about Veeco’s systems and service offerings, visit www.veeco.com.

Forward-looking Statements

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, 2018 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 Contacts: Investors: Media: Anthony Bencivenga (516) 252-1438 David Pinto (408) 325-6157 abencivenga@veeco.com dpinto@veeco.com

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

Three months ended March 31, ------------------------ 2019 2018 ----------- ----------- Net sales $ 99,371 $ 158,574 Cost of sales 64,655 101,894 - ------- - - ------- - Gross profit 34,716 56,680 - ------- - - ------- - Operating expenses, net: Research and development 23,340 24,320 Selling, general, and administrative 19,902 26,383 Amortization of intangible assets 4,218 13,532 Restructuring 1,430 2,695 Acquisition costs — 1,342 Other, net (34 ) (157 ) - ------- - - ------- - Total operating expenses, net 48,856 68,115 - ------- - - ------- - Operating income (loss) (14,140 ) (11,435 ) Interest expense, net (4,200 ) (4,622 ) - ------- - - ------- - Income (loss) before income taxes (18,340 ) (16,057 ) Income tax expense (benefit) 190 (230 ) - ------- - - ------- - Net income (loss) $ (18,530 ) $ (15,827 ) - ------- - - ------- - Income (loss) per common share: Basic $ (0.40 ) $ (0.34 ) Diluted $ (0.40 ) $ (0.34 ) Weighted average number of shares: Basic 46,848 46,963 Diluted 46,848 46,963

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

March 31, December 31, 2019 2018 --------- --------- Assets Current assets: Cash and cash equivalents $ 169,439 $ 212,273 Restricted cash 804 809 Short-term investments 67,215 48,189 Accounts receivable, net 74,860 66,808 Contract assets 10,479 10,397 Inventories 148,103 156,311 Deferred cost of sales 2,921 3,072 Prepaid expenses and other current assets 24,943 22,221 - ------- - ------- Total current assets 498,764 520,080 Property, plant and equipment, net 77,737 80,284 Operating lease right-of-use assets 12,874 — Intangible assets, net 80,931 85,149 Goodwill 184,302 184,302 Deferred income taxes 1,869 1,869 Other assets 29,117 29,132 - ------- - ------- Total assets $ 885,594 $ 900,816 - ------- - ------- Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 36,315 $ 39,611 Accrued expenses and other current liabilities 44,040 46,450 Customer deposits and deferred revenue 68,881 72,736 Income taxes payable 792 1,256 - ------- - ------- Total current liabilities 150,028 160,053 Deferred income taxes 5,675 5,690 Long-term debt 290,473 287,392 Operating lease long-term liabilities 8,382 — Other liabilities 9,238 9,906 - ------- - ------- Total liabilities 463,796 463,041 Total stockholders’ equity 421,798 437,775 - ------- - ------- Total liabilities and stockholders’ equity $ 885,594 $ 900,816 - ------- - -------

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 March 31, 2019 GAAP Compensat Amortizat Other Non-GAAP ion ion ---------------------------------- ----------- -------- -------- -------- ---------- Net sales $ 99,371 $ 99,371 Gross profit 34,716 470 47 35,233 Gross margin 34.9 % 35.5 % Operating expenses 48,856 (2,687 ) (4,218 ) (1,967 ) 39,984 ------- - ------ - ------ - ------ - ------ - Operating income (loss) (14,140 ) 3,157 4,218 2,014 ^ (4,751 ) Net income (loss) (18,530 ) 3,157 4,218 4,787 ^ (6,368 ) Income (loss) per common share: Basic $ (0.40 ) $ (0.14 ) Diluted (0.40 ) (0.14 ) Weighted average number of shares: Basic 46,848 46,848 Diluted 46,848 46,848

______________________________^ - See table below for additional details.

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

Three months ended March 31, 2019 ----------------------------------------------------------------------------------------- Restructuring 1,430 Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 142 Accelerated depreciation 397 Other 45 ----- - Subtotal 2,014 Non-cash interest expense 3,081 Non-GAAP tax adjustment * (308 ) ----- - Total Other 4,787

______________________________* - 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 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 March 31, 2018 GAAP Compensat Amortizati Other Non-GAAP ion on ---------------------------------- --------- -------- --------- -------- --------- Net sales $ 158,574 $ 158,574 Gross profit 56,680 554 611 57,845 Gross margin 35.7 % 36.5 % Operating expenses 68,115 (3,983 ) (13,532 ) (4,053 ) 46,547 ------- - ------ - ------- - ------ - ------- Operating income (loss) (11,435 ) 4,537 13,532 4,664 ^ 11,298 Net income (loss) (15,827 ) 4,537 13,532 6,985 ^ 9,227 Income (loss) per common share: Basic $ (0.34 ) $ 0.20 Diluted (0.34 ) 0.20 Weighted average number of shares: Basic 46,963 47,022 Diluted 46,963 47,191

_______________________________^ - See table below for additional details.

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

Three months ended March 31, 2018 ----------------------------------------------------------------------------------------- Restructuring 2,523 Acquisition related 1,342 Release of inventory fair value step-up associated with the Ultratech purchase accounting 514 Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 293 Other (8 ) ----- - Subtotal 4,664 Non-cash interest expense 2,859 Non-GAAP tax adjustment * (538 ) ----- - Total Other 6,985

___________________________* - 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. taxlaws.

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 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 Three months months ended ended March 31, March 31, 2019 2018 ----------- ----------- GAAP Net income (loss) $ (18,530 ) $ (15,827 ) Share-based compensation 3,157 4,537 Amortization 4,218 13,532 Restructuring 1,430 2,523 Acquisition related — 1,342 Release of inventory fair value step-up associated with the Ultratech purchase — 514 accounting Depreciation of PP&E fair value step-up associated with the Ultratech purchase 142 293 accounting Accelerated depreciation 397 — Interest (income) expense, net 4,200 4,622 Other 45 (8 ) Income tax expense (benefit) 190 (230 ) - ------- - - ------- - Non-GAAP Operating income (loss) $ (4,751 ) $ 11,298 - ------- - - ------- -

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 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 --------------------------------- Guidance for the three Share-based months ending June 30, 2019 GAAP Compensation Amortization Other Non-GAAP ------------------------- ----------------------- ------------ ------------ ----- ---------------------- Net sales $ 90 - $ 110 $ 90 - $ 110 Gross profit 32 - 42 1 — — 33 - 43 Gross margin 36 % - 38 % 37 % - 39 % Operating expenses ~$50 3 4 3 ~$40 --------------------- ------------ ------------ ----- -------------------- Operating income (loss) (18 ) - (8 ) 4 4 3 (7 ) - 3 Net income (loss) $ (22 ) - $ (12 ) 4 4 5 $ (9 ) - $ 1 Income (loss) per diluted $ (0.47 ) - $ (0.27 ) $ (0.18 ) - $ 0.02 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 June 30, 2019 -------------------------------------------------- GAAP Net income (loss) $ (22 ) - $ (12 ) Share-based compensation 4 - 4 Amortization 4 - 4 Restructuring 2 - 2 Interest expense, net 4 - 4 Income tax expense (benefit) 1 - 1 - --- - - --- - Non-GAAP Operating income (loss) $ (7 ) - $ 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, 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.