Veeco Reports Third Quarter 2024 Financial Results

Source: Nasdaq GlobeNewswire / 06 Nov 2024 15:05:01 America/Chicago

Third Quarter 2024 Highlights:

Revenue of $184.8 million, compared with $177.4 million in the same period last year
GAAP net income of $22.0 million, or $0.36 per diluted share, compared with $24.6 million, or $0.42 per diluted share in the same period last year
Non-GAAP net income of $28.3 million, or $0.46 per diluted share, compared with $31.0 million, or $0.53 per diluted share in the same period last year

PLAINVIEW, N.Y., Nov. 06, 2024 (GLOBE NEWSWIRE) -- Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its third quarter ended September 30, 2024. 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	Q3 '24		Q3 '23
Revenue	$	184.8	$	177.4
Net income	$	22.0	$	24.6
Diluted earnings per share	$	0.36	$	0.42

Non-GAAP Results	Q3 '24		Q3 '23
Operating income	$	31.0	$	32.7
Net income	$	28.3	$	31.0
Diluted earnings per share	$	0.46	$	0.53

“Veeco reported solid third quarter results above the mid-point of our guidance, led by record Semiconductor revenue,” commented Bill Miller, Ph.D., Veeco’s Chief Executive Officer. “Our Semiconductor business grew 26% year-over-year and 13% sequentially, highlighted by an increase in shipments to leading-edge customers across several product lines. Our portfolio of enabling technologies is gaining traction for several industry inflections, contributing to our expectations for our Semiconductor business to outperform WFE growth for the 4th consecutive year.”

Guidance and Outlook

The following guidance is provided for Veeco’s fourth quarter 2024:

Revenue is expected in the range of $165 million to $185 million
GAAP diluted earnings per share are expected in the range of $0.18 to $0.27
Non-GAAP diluted earnings per share are expected in the range of $0.35 to $0.45

Conference Call Information

A conference call reviewing these results has been scheduled for today, November 6, 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; 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:	Brenden Wright	(410) 984-2610	bwright@veeco.com

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

	Three months ended September 30,						Nine months ended September 30,
	2024			2023			2024			2023
Net sales	$	184,807		$	177,366		$	535,170		$	492,511
Cost of sales		105,596			100,489			305,150			286,107
Gross profit		79,211			76,877			230,020			206,404
Operating expenses, net:
Research and development		32,216			28,817			93,554			83,762
Selling, general, and administrative		25,291			22,814			74,586			69,263
Amortization of intangible assets		1,687			2,123			5,403			6,358
Other operating expense (income), net		(4,318	)		860			(6,625	)		1,264
Total operating expenses, net		54,876			54,614			166,918			160,647
Operating income		24,335			22,263			63,102			45,757
Interest income (expense), net		323			247			1,377			(1,187	)
Other income (expense), net		—			—			—			(97,091	)
Income (loss) before income taxes		24,658			22,510			64,479			(52,521	)
Income tax expense (benefit)		2,707			(2,064	)		5,730			(516	)
Net income (loss)	$	21,951		$	24,574		$	58,749		$	(52,005	)

Income (loss) per common share:
Basic	$	0.39		$	0.44		$	1.04		$	(0.98	)
Diluted	$	0.36		$	0.42		$	0.97		$	(0.98	)

Weighted average number of shares:
Basic		56,410			55,352			56,256			52,978
Diluted		62,654			59,636			62,103			52,978

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

	September 30,		December 31,
	2024		2023
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	163,228	$	158,781
Restricted cash		258		339
Short-term investments		157,534		146,664
Accounts receivable, net		132,347		103,018
Contract assets		30,795		24,370
Inventories		242,123		237,635
Prepaid expenses and other current assets		34,692		35,471
Total current assets		760,977		706,278
Property, plant and equipment, net		112,677		118,459
Operating lease right-of-use assets		26,695		24,377
Intangible assets, net		38,542		43,945
Goodwill		214,964		214,964
Deferred income taxes		115,777		117,901
Other assets		3,240		3,117
Total assets	$	1,272,872	$	1,229,041

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	50,049	$	42,383
Accrued expenses and other current liabilities		57,117		57,624
Contract liabilities		80,468		118,026
Income taxes payable		1,060		—
Current portion of long-term debt		26,473		—
Total current liabilities		215,167		218,033
Deferred income taxes		6,383		6,552
Long-term debt		249,402		274,941
Long-term operating lease liabilities		34,421		31,529
Other liabilities		20,980		25,544
Total liabilities		526,353		556,599

Total stockholders’ equity		746,519		672,442
Total liabilities and stockholders’ equity	$	1,272,872	$	1,229,041

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 (Q3 2024) (in thousands) (unaudited)

				Non-GAAP Adjustments
Three months ended September 30, 2024	GAAP			Share-Based Compensation			Amortization			Other				Non-GAAP
Net sales	$	184,807												$	184,807
Gross profit		79,211			1,565						162				80,938
Gross margin		42.9	%												43.8	%
Operating expenses		54,876			(7,894	)		(1,687	)		4,644				49,939
Operating income		24,335			9,459			1,687			(4,482	)	^		30,999
Net income		21,951			9,459			1,687			(4,836	)	^		28,261

_________________
^ - See table below for additional details.

Other Non-GAAP Adjustments (Q3 2024) (in thousands) (unaudited)

Three months ended September 30, 2024
Changes in contingent consideration	$	(4,644	)
Release of inventory fair value step-up associated with the Epiluvac purchase accounting		162
Subtotal		(4,482	)
Non-cash interest expense		323
Non-GAAP tax adjustment *		(677	)
Total Other	$	(4,836	)

_________________
* The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.

Net Income per Common Share (Q3 2024) (in thousands, except per share amounts) (unaudited)

	Three months ended September 30, 2024
	GAAP		Non-GAAP
Numerator:
Net income	$	21,951	$	28,261
Interest expense associated with 2025 and 2027 Convertible Senior Notes		515		466
Net income available to common shareholders	$	22,466	$	28,727

Denominator:
Basic weighted average shares outstanding		56,410		56,410
Effect of potentially dilutive share-based awards		1,606		1,606
Dilutive effect of 2025 Convertible Senior Notes		1,104		1,104
Dilutive effect of 2027 Convertible Senior Notes ⁽¹⁾		1,788		1,354
Dilutive effect of 2029 Convertible Senior Notes		1,746		1,746
Diluted weighted average shares outstanding		62,654		62,220

Net income per common share:
Basic	$	0.39	$	0.50
Diluted	$	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 to Non-GAAP Financial Data (Q3 2023) (in thousands) (unaudited)

				Non-GAAP Adjustments
Three months ended September 30, 2023	GAAP			Share-based Compensation			Amortization			Other				Non-GAAP
Net sales	$	177,366												$	177,366
Gross profit		76,877			1,556										78,433
Gross margin		43.3	%												44.2	%
Operating expenses		54,614			(5,864	)		(2,123	)		(911	)			45,716
Operating income		22,263			7,420			2,123			911		^		32,717
Net income		24,574			7,420			2,123			(3,077	)	^		31,040

_________________
^ See table below for additional details.

Other Non-GAAP Adjustments (Q3 2023) (in thousands) (unaudited)

Three months ended September 30, 2023
Changes in contingent consideration	$	818
Acquisition related		93
Subtotal		911
Non-cash interest expense		311
Non-GAAP tax adjustment *		(4,299	)
Total Other	$	(3,077	)

_________________
* - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.

Net Income per Common Share (Q3 2023) (in thousands, except per share amounts) (unaudited)

	Three months ended September 30, 2023
	GAAP		Non-GAAP
Numerator:
Net income	$	24,574	$	31,040
Interest expense associated with 2025 and 2027 Convertible Senior Notes		513		466
Net income available to common shareholders	$	25,087	$	31,506

Denominator:
Basic weighted average shares outstanding		55,352		55,352
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		59,636		59,202

Net income per common share:
Basic	$	0.44	$	0.56
Diluted	$	0.42	$	0.53

_________________
⁽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 (Q3 2024 and 2023) (in thousands) (unaudited)

	Three months ended			Three months ended
	September 30, 2024			September 30, 2023
GAAP Net income	$	21,951		$	24,574
Share-based compensation		9,459			7,420
Amortization		1,687			2,123
Changes in contingent consideration		(4,644	)		818
Release of inventory fair value step-up associated with the Epiluvac purchase accounting		162			—
Acquisition related		—			93
Interest (income) expense, net		(323	)		(247	)
Income tax expense		2,707			(2,064	)
Non-GAAP Operating income	$	30,999		$	32,717

Reconciliation of GAAP to Non-GAAP Financial Data (Q4 2024) (in millions, except per share amounts) (unaudited)

						Non-GAAP Adjustments
Guidance for the three months ending December 31, 2024	GAAP					Share-based Compensation			Amortization			Other			Non-GAAP
Net sales	$	165	-	$	185										$	165	-	$	185
Gross profit		70	-		79		2			—			—			72	-		81
Gross margin		42%	-		43%											43%	-		44%
Operating expenses		58	-		60		(8	)		(2	)		—			48	-		51
Operating income		12	-		19		10			2			—			23	-		30
Net income	$	10	-	$	16		10			2			(1	)	$	21	-	$	27

Income per diluted common share	$	0.18	-	$	0.27										$	0.35	-	$	0.45

Income per Diluted Common Share (Q4 2024) (in millions, except per share amounts) (unaudited)

Guidance for the three months ending December 31, 2024	GAAP					Non-GAAP
Numerator:
Net income	$	10	-	$	16	$	21	-	$	27
Interest expense associated with convertible notes		—			1		—			—
Net income available to common shareholders	$	10	-	$	17	$	21	-	$	27

Denominator:
Basic weighted average shares outstanding		56			56		56			56
Effect of potentially dilutive share-based awards		2			2		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		61			61

Net income per common share:
Income per diluted common share	$	0.18	-	$	0.27	$	0.35	-	$	0.45

Reconciliation of GAAP Net Income to Non-GAAP Operating Income (Q4 2024) (in millions) (unaudited)

Guidance for the three months ending December 31, 2024
GAAP Net income	$	10		-	$	16
Share-based compensation		10		-		10
Amortization		2		-		2
Interest income, net		(1	)	-		(1	)
Income tax expense		3		-		4
Non-GAAP Operating income	$	23		-	$	30

Note: Amounts may not calculate precisely due to rounding.

Veeco Reports Third Quarter 2024 Financial Results

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