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Veeco Reports Fourth Quarter and Fiscal Year 2023 Financial Results
Source: Nasdaq GlobeNewswire / 14 Feb 2024 16:05:00 America/New_York
Fourth Quarter 2023 Highlights:
- Revenue of $173.9 million, compared with $153.8 million in the same period last year
- GAAP net income of $21.6 million, or $0.37 per diluted share, compared with $128.9 million, or $2.00 per diluted share in the same period last year
- Non-GAAP net income of $29.8 million, or $0.51 per diluted share, compared with $21.9 million, or $0.38 per diluted share in the same period last year
Fiscal Year 2023 Highlights:
- Revenue of $666.4 million, compared with $646.1 million in the same period last year
- GAAP net loss of $30.4 million, or $0.56 loss per diluted share, included a $97.1 million loss related to debt refinancing, compared with net income of $166.9 million, or $2.71 earnings per diluted share in the same period last year
- Non-GAAP net income of $98.3 million, or $1.69 per diluted share, compared with $89.6 million, or $1.57 per diluted share in the same period last year
PLAINVIEW, N.Y., Feb. 14, 2024 (GLOBE NEWSWIRE) -- Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its fourth quarter and fiscal year ended December 31, 2023. 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 '23 Q4 '22 2023 2022 Revenue $ 173.9 $ 153.8 $ 666.4 $ 646.1 Net income (loss) $ 21.6 $ 128.9 $ (30.4 ) $ 166.9 Diluted earnings (loss) per share $ 0.37 $ 2.00 $ (0.56 ) $ 2.71 4th Quarter Full Year Non-GAAP Results Q4 '23 Q4 '22 2023 2022 Operating income $ 32.1 $ 23.8 $ 109.6 $ 99.8 Net income $ 29.8 $ 21.9 $ 98.3 $ 89.6 Diluted earnings per share $ 0.51 $ 0.38 $ 1.69 $ 1.57 “2023 was a critical year for Veeco, highlighted by our Semiconductor business outperforming WFE growth for the 3rd consecutive year,” commented Bill Miller, Ph.D., Veeco’s Chief Executive Officer. “I’m proud to say we successfully grew the business, improved profitability, and most importantly, laid the groundwork for future growth. We achieved a significant milestone by shipping evaluation systems for two important core technologies in Nanosecond Annealing and Ion Beam Deposition. These technologies enable our customers to fabricate devices that enable higher performance and reduced power consumption.”
Guidance and Outlook
The following guidance is provided for Veeco’s first quarter 2024:
- Revenue is expected in the range of $160 million to $180 million
- GAAP diluted earnings per share are expected in the range of $0.22 to $0.33
- Non-GAAP diluted earnings per share are expected in the range of $0.36 to $0.46
Conference Call Information
A conference call reviewing these results has been scheduled for today, February 14, 2024 starting at 5:00pm ET. To join the call, dial 1-877-407-8029 (toll-free) or 1-201-689-8029. Participants may also access a live webcast of the call by visiting the investor relations section of Veeco's website at ir.veeco.com. A replay of the webcast will be made available on the Veeco website that evening. We will post an accompanying slide presentation to our website prior to the beginning of the call.
About Veeco
Veeco (NASDAQ: VECO) is an innovative manufacturer of semiconductor process equipment. Our laser annealing, ion beam, chemical vapor deposition (CVD), metal organic chemical vapor deposition (MOCVD), single wafer etch & clean and lithography technologies play an integral role in the fabrication and packaging of advanced semiconductor devices. With equipment designed to optimize performance, yield and cost of ownership, Veeco holds leading technology positions in the markets we serve. To learn more about Veeco’s systems and service offerings, visit www.veeco.com.
Forward-looking Statements
This press release contains “forward-looking statements”, within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, as amended, that are based on management’s expectations, estimates, projections and assumptions. Words such as “expects,” “anticipates,” “plans,” “believes,” “scheduled,” “estimates” and variations of these words and similar expressions are intended to identify forward-looking statements. Forward-looking statements include, but are not limited to, those regarding anticipated growth and trends in our businesses and markets, industry outlooks and demand drivers, our investment and growth strategies, our development of new products and technologies, our business outlook for current and future periods, our ongoing transformation initiative and the effects thereof on our operations and financial results; and other statements that are not historical facts. These statements and their underlying assumptions are subject to risks and uncertainties and are not guarantees of future performance. Factors that could cause actual results to differ materially from those expressed or implied by such statements include, without limitation: the level of demand for our products; global economic and industry conditions; global trade issues, including the ongoing trade disputes between the U.S. and China, and changes in trade and export license policies; our dependency on third-party suppliers and outsourcing partners; the timing of customer orders; our ability to develop, deliver and support new products and technologies; our ability to expand our current markets, increase market share and develop new markets; the concentrated nature of our customer base; our ability to obtain and protect intellectual property rights in key technologies; the effects of regional or global health epidemics, including the effects of the COVID-19 pandemic on the Company’s operations and on those of our customers and suppliers; our ability to achieve the objectives of operational and strategic initiatives and attract, motivate and retain key employees; the variability of results among products and end-markets, and our ability to accurately forecast future results, market conditions, and customer requirements; the impact of our indebtedness, including our convertible senior notes and our capped call transactions; and other risks and uncertainties described in our SEC filings on Forms 10-K, 10-Q and 8-K, and from time-to-time in our other SEC reports. All forward-looking statements speak only to management’s expectations, estimates, projections and assumptions as of the date of this press release or, in the case of any document referenced herein or incorporated by reference, the date of that document. The Company does not undertake any obligation to update or publicly revise any forward-looking statements to reflect events, circumstances or changes in expectations after the date of this press release.
-financial tables attached-
Veeco Contacts:
Investors: Anthony Pappone (516) 500-8798 apappone@veeco.com Media: Kevin Long (516) 714-3978 klong@veeco.com Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)Three months ended December 31, Year ended December 31, 2023 2022 2023 2022 Net sales $ 173,924 $ 153,799 $ 666,435 $ 646,137 Cost of sales 95,269 90,881 381,376 382,989 Gross profit 78,655 62,918 285,059 263,148 Operating expenses, net: Research and development 29,091 26,327 112,853 103,565 Selling, general, and administrative 23,493 20,965 92,756 88,952 Amortization of intangible assets 2,123 2,505 8,481 10,018 Other operating expense (income), net (235 ) (271 ) 1,029 317 Total operating expenses, net 54,472 49,526 215,119 202,852 Operating income 24,183 13,392 69,940 60,296 Interest expense, net — (1,558 ) (1,187 ) (9,311 ) Other income (expense), net — — (97,091 ) — Income (loss) before income taxes 24,183 11,834 (28,338 ) 50,985 Income tax expense (benefit) 2,546 (117,081 ) 2,030 (115,957 ) Net income (loss) $ 21,637 $ 128,915 $ (30,368 ) $ 166,942 Income (loss) per common share: Basic $ 0.39 $ 2.58 $ (0.56 ) $ 3.35 Diluted $ 0.37 $ 2.00 $ (0.56 ) $ 2.71 Weighted average number of shares: Basic 55,537 49,912 53,769 49,906 Diluted 59,821 65,684 53,769 65,607 Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)December 31, December 31, 2023 2022 (unaudited) Assets Current assets: Cash and cash equivalents $ 158,781 $ 154,925 Restricted cash 339 547 Short-term investments 146,664 147,488 Accounts receivable, net 103,018 124,221 Contract assets 24,370 16,507 Inventories 237,635 206,908 Prepaid expenses and other current assets 35,471 18,305 Total current assets 706,278 668,901 Property, plant and equipment, net 118,459 107,281 Operating lease right-of-use assets 24,377 26,467 Intangible assets, net 43,945 23,887 Goodwill 214,964 181,943 Deferred income taxes 117,901 116,349 Other assets 3,117 3,355 Total assets $ 1,229,041 $ 1,128,183 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 42,383 $ 52,049 Accrued expenses and other current liabilities 57,624 56,031 Contract liabilities 118,026 127,223 Income taxes payable — 2,432 Current portion of long-term debt — 20,169 Total current liabilities 218,033 257,904 Deferred income taxes 6,552 1,285 Long-term debt 274,941 254,491 Long-term operating lease liabilities 31,529 33,581 Other liabilities 25,544 3,098 Total liabilities 556,599 550,359 Total stockholders’ equity 672,442 577,824 Total liabilities and stockholders’ equity $ 1,229,041 $ 1,128,183 Note on Reconciliation Tables
The below tables include financial measures adjusted for the impact of certain items; these financial measures are therefore not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These Non-GAAP financial measures exclude items such as: share-based compensation expense; charges relating to restructuring initiatives; non-cash asset impairments; certain other non-operating gains and losses; and acquisition-related items such as transaction costs, non-cash amortization of acquired intangible assets, and certain integration costs.
These Non-GAAP financial measures may be different from Non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. By excluding these items, Non-GAAP financial measures are intended to facilitate meaningful comparisons to historical operating results, competitors’ operating results, and estimates made by securities analysts. Management is evaluated on key performance metrics including Non-GAAP Operating income (loss), which is used to determine management incentive compensation as well as to forecast future periods. These Non-GAAP financial measures may be useful to investors in allowing for greater transparency of supplemental information used by management in its financial and operational decision-making. In addition, similar Non-GAAP financial measures have historically been reported to investors; the inclusion of comparable numbers provides consistency in financial reporting. Investors are encouraged to review the reconciliation of the Non-GAAP financial measures used in this news release to their most directly comparable GAAP financial measures.
Reconciliation of GAAP to Non-GAAP Financial Data (Q4 2023)
(in thousands)
(unaudited)Non-GAAP Adjustments Share-Based Three months ended December 31, 2023 GAAP Compensation Amortization Other Non-GAAP Net sales $ 173,924 $ 173,924 Gross profit 78,655 334 78,989 Gross margin 45.2 % 45.4 % Operating expenses 54,472 (5,845 ) (2,123 ) 363 46,867 Operating income 24,183 6,179 2,123 (363 ) ^ 32,122 Net income 21,637 6,179 2,123 (116 ) ^ 29,823 ^ - See table below for additional details. Other Non-GAAP Adjustments (Q4 2023)
(in thousands)
(unaudited)Three months ended December 31, 2023 Changes in contingent consideration $ (465 ) Other 102 Subtotal (363 ) Non-cash interest expense 294 Non-GAAP tax adjustment * (47 ) Total Other $ (116 ) * - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments. Net Income per Common Share (Q4 2023)
(in thousands, except per share amounts)
(unaudited)Three months ended December 31, 2023 GAAP Non-GAAP Numerator: Net income $ 21,637 $ 29,823 Interest expense associated with 2025 and 2027 Convertible Senior Notes 511 466 Net income available to common shareholders $ 22,148 $ 30,289 Denominator: Basic weighted average shares outstanding 55,537 55,537 Effect of potentially dilutive share-based awards 1,391 1,391 Dilutive effect of 2025 Convertible Senior Notes 1,104 1,104 Dilutive effect of 2027 Convertible Senior Notes (1) 1,789 1,355 Diluted weighted average shares outstanding 59,821 59,387 Net income per common share: Basic $ 0.39 $ 0.54 Diluted $ 0.37 $ 0.51 (1) - The non-GAAP incremental dilutive shares includes the impact of the Company’s capped call transaction issued concurrently with our 2027 Notes, and as such, an effective conversion price of $18.46 is used when determining incremental shares to add to the dilutive share count. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, an effective conversion price of $13.98 is used when determining incremental shares to add to the dilutive share count. Reconciliation of GAAP to Non-GAAP Financial Data (Q4 2022)
(in thousands, except per share amounts)
(unaudited)Non-GAAP Adjustments Share-based Three months ended December 31, 2022 GAAP Compensation Amortization Other Non-GAAP Net sales $ 153,799 $ 153,799 Gross profit 62,918 1,167 1,011 65,096 Gross margin 40.9 % 42.3 % Operating expenses 49,526 (4,858 ) (2,505 ) (821 ) 41,342 Operating income 13,392 6,025 2,505 1,832 ^ 23,754 Net income 128,915 6,025 2,505 (115,554 ) ^ 21,891 ^ - See table below for additional details. Other Non-GAAP Adjustments (Q4 2022)
(in thousands)
(unaudited)Three months ended December 31, 2022 Transition expenses related to San Jose expansion project $ 1,788 Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 44 Subtotal 1,832 Non-cash interest expense 244 Release of valuation allowance on deferred tax assets (104,971 ) Non-GAAP tax adjustment * (12,659 ) Total Other $ (115,554 ) * - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments. Net Income per Common Share (Q4 2022)
(in thousands, except per share amounts)
(unaudited)Three months ended December 31, 2022 GAAP Non-GAAP Numerator: Net income $ 128,915 $ 21,891 Interest expense associated with convertible notes 2,712 2,467 Net income available to common shareholders $ 131,627 $ 24,358 Denominator: Basic weighted average shares outstanding 49,912 49,912 Effect of potentially dilutive share-based awards 805 805 Dilutive effect of 2023 Convertible Senior Notes 504 504 Dilutive effect of 2025 Convertible Senior Notes 5,521 5,521 Dilutive effect of 2027 Convertible Senior Notes (1) 8,942 6,771 Diluted weighted average shares outstanding 65,684 63,513 Net income per common share: Basic $ 2.58 $ 0.44 Diluted $ 2.00 $ 0.38 (1) - The non-GAAP incremental dilutive shares includes the impact of the Company’s capped call transaction issued concurrently with our 2027 Notes, and as such, an effective conversion price of $18.46 is used when determining incremental shares to add to the dilutive share count. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, an effective conversion price of $13.98 is used when determining incremental shares to add to the dilutive share count. Reconciliation of GAAP Net Income to Non-GAAP Operating Income (Q4 2023 and 2022)
(in thousands)
(unaudited)Three months ended Three months ended December 31, 2023 December 31, 2022 GAAP Net income $ 21,637 $ 128,915 Share-based compensation 6,179 6,025 Amortization 2,123 2,505 Transition expenses related to San Jose expansion project 57 1,788 Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting — 44 Changes in contingent consideration (465 ) — Acquisition related 45 — Interest (income) expense, net — 1,558 Income tax expense (benefit) 2,546 (117,081 ) Non-GAAP Operating income $ 32,122 $ 23,754 Reconciliation of GAAP to Non-GAAP Financial Data (FY 2023)
(in thousands)
(unaudited)Non-GAAP Adjustments Share-based For the year ended December 31, 2023 GAAP Compensation Amortization Other Non-GAAP Net sales $ 666,435 $ 666,435 Gross profit 285,059 4,913 232 290,204 Gross margin 42.8 % 43.5 % Operating expenses 215,119 (23,645 ) (8,481 ) (2,363 ) 180,630 Operating income 69,940 28,558 8,481 2,595 ^ 109,574 Net income (loss) (30,368 ) 28,558 8,481 91,668 ^ 98,339 ^ - See table below for additional details. Other Non-GAAP Adjustments (FY 2023)
(in thousands)
(unaudited)For the year ended December 31, 2023 Acquisition related $ 1,056 Changes in contingent consideration 701 Transition expenses related to San Jose expansion project 838 Subtotal 2,595 Non-cash interest expense 1,118 Other (income) expense, net 97,091 Non-GAAP tax adjustment * (9,136 ) Total Other $ 91,668 * - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments. Net Income per Common Share (FY 2023)
(in thousands, except per share amounts)
(unaudited)Year ended December 31, 2023 GAAP Non-GAAP Numerator: Net income (loss) $ (30,368 ) $ 98,339 Interest expense associated with convertible notes — 4,768 Net income (loss) available to common shareholders $ (30,368 ) $ 103,107 Denominator: Basic weighted average shares outstanding 53,769 53,769 Effect of potentially dilutive share-based awards — 850 Dilutive effect of 2023 Convertible Senior Notes — 21 Dilutive effect of 2025 Convertible Senior Notes — 2,786 Dilutive effect of 2027 Convertible Senior Notes (1) — 3,417 Diluted weighted average shares outstanding 53,769 60,843 Net income (loss) per common share: Basic $ (0.56 ) $ 1.83 Diluted $ (0.56 ) $ 1.69 (1) - The non-GAAP incremental dilutive shares includes the impact of the Company’s capped call transaction issued concurrently with our 2027 Notes, and as such, an effective conversion price of $18.46 is used when determining incremental shares to add to the dilutive share count. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, an effective conversion price of $13.98 is used when determining incremental shares to add to the dilutive share count. Reconciliation of GAAP to Non-GAAP Financial Data (FY 2022)
(in thousands)
(unaudited)Non-GAAP Adjustments Share-based For the year ended December 31, 2022 GAAP Compensation Amortization Other Non-GAAP Net sales $ 646,137 $ 646,137 Gross profit 263,148 4,551 3,300 270,999 Gross margin 40.7 % 41.9 % Operating expenses 202,852 (18,443 ) (10,018 ) (3,212 ) 171,179 Operating income 60,296 22,994 10,018 6,512 ^ 99,820 Net income 166,942 22,994 10,018 (110,379 ) ^ 89,575 ^ - See table below for additional details. Other Non-GAAP Adjustments (FY 2022)
(in thousands)
(unaudited)For the year ended December 31, 2022 Transition expenses related to San Jose expansion project $ 6,202 Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 310 Subtotal 6,512 Non-cash interest expense 962 Other (income) expense, net (104,971 ) Non-GAAP tax adjustment * (12,882 ) Total Other $ (110,379 ) * - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments. Net Income per Common Share (FY 2022)
(in thousands, except per share amounts)
(unaudited)Year ended December 31, 2022 GAAP Non-GAAP Numerator: Net income $ 166,942 $ 89,575 Interest expense associated with convertible notes 10,832 9,870 Net income available to common shareholders $ 177,774 $ 99,445 Denominator: Basic weighted average shares outstanding 49,906 49,906 Effect of potentially dilutive share-based awards 734 734 Dilutive effect of 2023 Convertible Senior Notes 504 504 Dilutive effect of 2025 Convertible Senior Notes 5,521 5,521 Dilutive effect of 2027 Convertible Senior Notes (1) 8,942 6,771 Diluted weighted average shares outstanding 65,607 63,436 Net income per common share: Basic $ 3.35 $ 1.79 Diluted $ 2.71 $ 1.57 (1) - The non-GAAP incremental dilutive shares includes the impact of the Company’s capped call transaction issued concurrently with our 2027 Notes, and as such, an effective conversion price of $18.46 is used when determining incremental shares to add to the dilutive share count. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, an effective conversion price of $13.98 is used when determining incremental shares to add to the dilutive share count. Reconciliation of GAAP Net Income to Non-GAAP Operating Income (FY 2023 and 2022)
(in thousands)
(unaudited)Year ended Year ended December 31, 2023 December 31, 2022 GAAP Net income (loss) $ (30,368 ) $ 166,942 Share-based compensation 28,558 22,994 Amortization 8,481 10,018 Acquisition related 1,056 — Changes in contingent consideration 701 — Transition expenses related to San Jose expansion project 838 6,202 Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting — 310 Interest (income) expense, net 1,187 9,311 Other (income) expense, net 97,091 — Income tax expense (benefit) 2,030 (115,957 ) Non-GAAP Operating income (loss) $ 109,574 $ 99,820 Reconciliation of GAAP to Non-GAAP Financial Data (Q1 2024)
(in millions, except per share amounts)
(unaudited)Non-GAAP Adjustments Guidance for the three months ending Share-based March 31, 2024 GAAP Compensation Amortization Other Non-GAAP Net sales $ 160 - $ 180 $ 160 - $ 180 Gross profit 68 - 78 1 — — 69 - 79 Gross margin 42 % - 43 % 43 % - 44 % Operating expenses 53 - 56 (6 ) (2 ) — 46 - 48 Operating income 15 - 22 7 2 — 24 - 31 Net income $ 13 - $ 20 7 2 (1 ) $ 21 - $ 27 Income per diluted common share $ 0.22 - $ 0.33 $ 0.36 - $ 0.46 Income per Diluted Common Share (Q1 2024)
(in millions, except per share amounts)
(unaudited)Guidance for the three months ending March 31, 2024 GAAP Non-GAAP Numerator: Net income $ 13 - $ 20 $ 21 - $ 27 Interest expense associated with convertible notes — — — — Net income available to common shareholders $ 13 - $ 20 $ 21 - $ 27 Denominator: Basic weighted average shares outstanding 56 56 56 56 Effect of potentially dilutive share-based awards 1 1 1 1 Dilutive effect of 2025 Convertible Senior Notes — 1 1 1 Dilutive effect of 2027 Convertible Senior Notes (1) 2 2 1 1 Dilutive effect of 2029 Convertible Senior Notes 1 1 1 1 Diluted weighted average shares outstanding 60 61 60 60 Net income per common share: Income per diluted common share $ 0.22 - $ 0.33 $ 0.36 - $ 0.46 (1) - The non-GAAP incremental dilutive shares includes the impact of the Company’s capped call transaction issued concurrently with our 2027 Notes, and as such, an effective conversion price of $18.46 is used when determining incremental shares to add to the dilutive share count. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, an effective conversion price of $13.98 is used when determining incremental shares to add to the dilutive share count. Reconciliation of GAAP Net Income to Non-GAAP Operating Income (Q1 2024)
(in millions)
(unaudited)Guidance for the three months ending March 31, 2024 GAAP Net income $ 13 - $ 20 Share-based compensation 7 - 7 Amortization 2 - 2 Income tax expense (benefit) 2 - 2 Non-GAAP Operating income $ 24 - $ 31 Note: Amounts may not calculate precisely due to rounding.
