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QuickLinks-- Click here to rapidly navigate through this documentSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-----------------FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30,20012002Commission file number 0-16244
------------------VEECO INSTRUMENTS INC.
(Exact
(Exact name of registrant as specified in its charter)Delaware 11-2989601 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 100 Sunnyside Blvd. 11797 Woodbury, NY (zip code)
Delaware
(State or other jurisdiction of
incorporation or organization)11-2989601
(I.R.S. Employer
Identification Number)
100 Sunnyside Blvd.
Woodbury, NY
(Address of principal executive offices)
11797
(zip code)Registrant's telephone number, including area code:(516) 677-0200
-------------------Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:
Yes
|X|/x/ No|_| 24,805,839/ /29,134,679 shares of common stock, $0.01 par value per share, were outstanding as of the close of business on July 30,
2001.SAFE HARBOR STATEMENT2002.SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (the "Report") contains certain forward-looking statements about Veeco within the meaning of the Private Securities Litigation Reform Act of 1995.
Discussions containing suchThese forward-looking statementsmay be foundinvolve risks and uncertainties. Forward-looking statements include expectations about market conditions or about market acceptance, expectations of future sales or gross profits, possible or assumed future results of operations of Veeco and the statements included in Items 2 and 3 hereof, as well as within this Report generally.In addition, when used in this Report, the words "believes,Forward-looking statements relate to expectations concerning matters that are not historical facts. Words or phrases such as "will likely result,""anticipates,"expect,""expects,"will continue,""estimates,"anticipate,""plans,"believe,""intends,"estimate," "intend," "plan," "project" and similar expressions are intended to identify forward-looking statements.AllActual results may vary materially from those expressed in such forward-looking statements as a result of various factors, including:
Although Veeco believes that these forward-looking statements are reasonable, Veeco cannot assure you that these expectations will prove to be correct.
Veeco cautions you not to put undue reliance on any forward-looking statement contained in this Report. The risk factors and cautionary statements contained or referred to in this section should be regarded solelyconsidered in connection with any subsequent written or oral forward-looking statements that Veeco or persons acting on its behalf may issue. Except as the
Company's current plans, estimates and beliefs. The Company does not undertake
anyotherwise required by federal securities laws, Veeco has no intention or obligation to update or revise any forward-looking statementsstatement after this document is filed to reflect futurethe occurrence of unanticipated events or to reflect events or circumstances after the date ofon which such statements.
statement is made.
2
VEECO INSTRUMENTS INC.
INDEX
PART 1. FINANCIAL INFORMATION
PAGE
----
Page | ||||
---|---|---|---|---|
Part I. | Financial Information | |||
Item 1. | Financial Statements (Unaudited): | |||
Condensed Consolidated Statements of Operations—Three Months Ended June 30, 2002 and 2001 | 4 | |||
Condensed Consolidated Statements of Operations—Six Months Ended June 30, 2002 and 2001 | 5 | |||
Condensed Consolidated Balance Sheets—June 30, 2002 and December 31, 2001 | 6 | |||
Condensed Consolidated Statements of Cash Flows—Six Months Ended June 30, 2002 and 2001 | 7 | |||
Notes to Condensed Consolidated Financial Statements | 8 | |||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 12 | ||
Item 3. | Quantitative and Qualitative Disclosure About Market Risk | 17 | ||
Part II. | Other Information | |||
Item 4. | Submission of Matters to a Vote of Security Holders | 18 | ||
Item 5. | Other Information | 18 | ||
Item 6. | Exhibits and Reports on Form 8-K | 20 | ||
SIGNATURES | 22 |
3
Item 1. Financial Statements (Unaudited):
Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Statements of Operations -
Three Months Ended June 30, 2001
(In thousands, except per share data)
(Unaudited)
| Three Months Ended June 30, | |||||||
---|---|---|---|---|---|---|---|---|
| 2002 | 2001 | ||||||
Net sales | $ | 77,339 | $ | 112,095 | ||||
Cost of sales | 42,137 | 58,956 | ||||||
Gross profit | 35,202 | 53,139 | ||||||
Costs and expenses: | ||||||||
Selling, general and administrative expense | 19,335 | 20,714 | ||||||
Research and development expense | 13,928 | 14,805 | ||||||
Amortization expense | 3,172 | 881 | ||||||
Other (income) expense, net | (285 | ) | 226 | |||||
Restructuring expense | 1,050 | 1,000 | ||||||
Operating (loss) income from continuing operations | (1,998 | ) | 15,513 | |||||
Interest expense (income), net | 1,477 | (397 | ) | |||||
(Loss) income from continuing operations before income taxes | (3,475 | ) | 15,910 | |||||
Income tax (benefit) provision | (1,856 | ) | 5,435 | |||||
(Loss) income from continuing operations | (1,619 | ) | 10,475 | |||||
Loss from discontinued operations, net of taxes | — | (475 | ) | |||||
Net (loss) income | $ | (1,619 | ) | $ | 10,000 | |||
(Loss) earnings per common share: | ||||||||
(Loss) income per common share from continuing operations | $ | (0.06 | ) | $ | 0.42 | |||
Loss from discontinued operations | — | (0.02 | ) | |||||
Net (loss) income per common share | $ | (0.06 | ) | $ | 0.40 | |||
Diluted (loss) income per common share from continuing operations | $ | (0.06 | ) | $ | 0.42 | |||
Loss from discontinued operations | — | (0.02 | ) | |||||
Diluted net (loss) income per common share | $ | (0.06 | ) | $ | 0.40 | |||
Weighted average shares outstanding | 29,083 | 24,767 | ||||||
Diluted weighted average shares outstanding | 29,083 | 25,215 |
See Accompanying Notes.
4
Veeco Instruments Inc. and 2000 4
Subsidiaries
Condensed Consolidated Statements of Operations -
Six Months Ended June 30, 2001
(In thousands, except per share data)
(Unaudited)
| Six Months Ended June 30, | |||||||
---|---|---|---|---|---|---|---|---|
| 2002 | 2001 | ||||||
Net sales | $ | 157,488 | $ | 237,481 | ||||
Cost of sales | 88,551 | 125,652 | ||||||
Gross profit | 68,937 | 111,829 | ||||||
Costs and expenses: | ||||||||
Selling, general and administrative expense | 38,372 | 41,848 | ||||||
Research and development expense | 27,257 | 29,912 | ||||||
Amortization expense | 6,919 | 2,317 | ||||||
Other (income) expense, net | (236 | ) | 1,632 | |||||
Restructuring expense | 1,887 | 1,000 | ||||||
Operating (loss) income from continuing operations | (5,262 | ) | 35,120 | |||||
Interest expense (income), net | 2,963 | (1,164 | ) | |||||
(Loss) income from continuing operations before income taxes | (8,225 | ) | 36,284 | |||||
Income tax (benefit) provision | (3,454 | ) | 12,593 | |||||
(Loss) income from continuing operations | (4,771 | ) | 23,691 | |||||
Discontinued operations: | ||||||||
Loss from discontinued operations, net of taxes | — | (818 | ) | |||||
Loss on disposal of discontinued operations, net of taxes | (346 | ) | — | |||||
Net (loss) income | $ | (5,117 | ) | $ | 22,873 | |||
(Loss) earnings per common share: | ||||||||
(Loss) income per common share from continuing operations | $ | (0.16 | ) | $ | 0.96 | |||
Loss from discontinued operations | (0.02 | ) | (0.03 | ) | ||||
Net (loss) income per common share | $ | (0.18 | ) | $ | 0.93 | |||
Diluted (loss) income per common share from continuing operations | $ | (0.16 | ) | $ | 0.94 | |||
Loss from discontinued operations | (0.02 | ) | (0.03 | ) | ||||
Diluted net (loss) income per common share | $ | (0.18 | ) | $ | 0.91 | |||
Weighted average shares outstanding | 29,052 | 24,722 | ||||||
Diluted weighted average shares outstanding | 29,052 | 25,222 |
See Accompanying Notes.
5
Veeco Instruments Inc. and 2000 5
Subsidiaries
Condensed Consolidated Balance Sheets -
June 30, 2001
(In thousands)
| June 30, 2002 | December 31, 2001 | ||||
---|---|---|---|---|---|---|
| (Unaudited) | | ||||
Assets | ||||||
Current Assets: | ||||||
Cash and cash equivalents | $ | 221,343 | $ | 203,154 | ||
Accounts receivable, net | 73,026 | 88,449 | ||||
Inventories | 104,163 | 102,103 | ||||
Prepaid expenses and other current assets | 7,715 | 21,952 | ||||
Deferred income taxes | 54,167 | 46,832 | ||||
Total current assets | 460,414 | 462,490 | ||||
Property, plant and equipment at cost, net | 74,711 | 78,547 | ||||
Goodwill | 125,585 | 125,585 | ||||
Long-term investments | 30,453 | 23,519 | ||||
Other assets, net | 61,402 | 65,378 | ||||
Total assets | $ | 752,565 | $ | 755,519 | ||
Liabilities and Shareholders' Equity | ||||||
Current Liabilities: | ||||||
Accounts payable | $ | 21,105 | $ | 19,657 | ||
Accrued expenses | 44,605 | 58,070 | ||||
Deferred gross profit | 6,757 | 14,566 | ||||
Other current liabilities | 9,597 | 12,174 | ||||
Total current liabilities | 82,064 | 104,467 | ||||
Long-term debt, net of current portion | 234,729 | 215,519 | ||||
Other non-current liabilities | 11,924 | 11,562 | ||||
Shareholders' equity | 423,848 | 423,971 | ||||
Total liabilities and shareholders' equity | $ | 752,565 | $ | 755,519 | ||
See Accompanying Notes.
6
Veeco Instruments Inc. and December 31, 2000 6
Subsidiaries
Condensed Consolidated Statements of Cash Flows -
Six Months Ended June 30, 2001
(In thousands)
(Unaudited)
| Six Months Ended June 30, | ||||||
---|---|---|---|---|---|---|---|
| 2002 | 2001 | |||||
Net cash (used in) provided by operating activities | $ | (2,659 | ) | $ | 8,400 | ||
Investing Activities | |||||||
Capital expenditures | (4,242 | ) | (9,074 | ) | |||
Proceeds from sale of industrial measurement business | 3,750 | — | |||||
Proceeds from sale of property, plant and equipment | 1,790 | 11 | |||||
Payment for net assets of businesses acquired | — | (7,529 | ) | ||||
Net purchases of short-term investments | — | (733 | ) | ||||
Net maturities of long-term investments | 1,779 | — | |||||
Net cash provided by (used in) investing activities | 3,077 | (17,325 | ) | ||||
Financing Activities | |||||||
Proceeds from stock issuance | 983 | 2,358 | |||||
Repayment of long-term debt, net | (815 | ) | (809 | ) | |||
Proceeds from issuance of long-term debt | 20,000 | — | |||||
Payment for debt issuance costs | (1,260 | ) | — | ||||
Net cash provided by financing activities | 18,908 | 1,549 | |||||
Effect of exchange rates on cash and cash equivalents | (1,137 | ) | 4,197 | ||||
Net change in cash and cash equivalents | 18,189 | (3,179 | ) | ||||
Cash and cash equivalents at beginning of period | 203,154 | 63,419 | |||||
Cash and cash equivalents at end of period | $ | 221,343 | $ | 60,240 | |||
See Accompanying Notes.
7
Veeco Instruments Inc. and 2000 7
Subsidiaries
Notes to Condensed Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis(Unaudited)
Note 1 — Basis of Financial
Condition and Results of Operations 13
Item 3. Quantitative and Qualitative Disclosure About Market Risk 18
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 19
Item 5. Other Information 19
Item 6. Exhibits and Reports on Form 8-K 20
SIGNATURES 21
3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended
June 30,
--------
2001 2000
---- ----
Net sales $ 113,455 $ 102,324
Cost of sales 59,951 73,329
--------- ---------
Gross profit 53,504 28,995
Costs and expenses:
Research and development expense 15,400 14,063
Selling, general and administrative expense 21,289 19,158
Amortization expense 881 976
Other expense, net 226 61
Merger and restructuring expenses 1,000 13,956
Asset impairment charge -- 3,722
--------- ---------
Operating income (loss) 14,708 (22,941)
Interest income, net (397) (136)
--------- ---------
Income (loss) before income taxes 15,105 (22,805)
Income tax provision (benefit) 5,105 (8,779)
--------- ---------
Net income (loss) $ 10,000 $ (14,026)
========= =========
Net income (loss) per common share $ 0.40 ($0.60)
Diluted net income (loss) per common share $ 0.40 ($0.60)
Weighted average shares outstanding 24,767 23,463
Diluted weighted average shares outstanding 25,215 23,463
SEE ACCOMPANYING NOTES.
4
Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Six Months Ended
June 30,
--------
2001 2000
---- ----
Net sales $ 240,723 $ 189,155
Cost of sales 127,935 119,792
--------- ---------
Gross profit 112,788 69,363
Costs and expenses:
Research and development expense 31,116 27,408
Selling, general and administrative expense 42,979 36,286
Amortization expense 2,317 1,485
Other expense, net 1,632 41
Merger and restructuring expenses 1,000 14,206
Asset impairment charge -- 3,722
--------- ---------
Operating income (loss) 33,744 (13,785)
Interest income, net (1,163) (521)
--------- ---------
Income (loss) before income taxes 34,907 (13,264)
Income tax provision (benefit) 12,034 (5,186)
--------- ---------
Net income (loss) before cumulative effect of change in
accounting principle 22,873 (8,078)
Cumulative effect of change in accounting principle, net
of taxes -- (18,382)
--------- ---------
Net income (loss) $ 22,873 $ (26,460)
========= =========
Net income (loss) per common share before cumulative
effect of change in accounting principle $ 0.93 $ (0.35)
Cumulative effect of change in accounting principle -- (0.79)
--------- ---------
Net income (loss) per common share $ 0.93 $ (1.14)
========= =========
Diluted net income (loss) per common share before cumulative
effect of change in accounting principle $ 0.91 $ (0.35)
Cumulative effect of change in accounting principle -- (0.79)
--------- ---------
Diluted net income (loss) per common share $ 0.91 $ (1.14)
========= =========
Weighted average shares outstanding 24,722 23,253
Diluted weighted average shares outstanding 25,222 23,253
SEE ACCOMPANYING NOTES.
5
Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
June 30, December 31,
2001 2000
---- ----
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 60,241 $ 63,420
Short-term investments 27,629 26,895
Accounts receivable, net 86,191 98,248
Inventories 134,958 100,062
Prepaid expenses and other current assets 9,467 8,307
Deferred income taxes 36,769 45,303
-------- --------
Total current assets 355,255 342,235
Property, plant and equipment at cost, net 62,981 60,094
Excess of cost over net assets acquired, net 13,437 9,481
Other assets, net 10,639 11,473
-------- --------
Total assets $442,312 $423,283
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable 33,325 33,134
Accrued expenses 58,990 56,093
Deferred gross profit 19,954 28,771
Other current liabilities 3,399 3,774
-------- --------
Total current liabilities 115,668 121,772
Long-term debt, net of current portion 13,960 14,631
Other non-current liabilities 3,845 3,972
Shareholders' equity 308,839 282,908
-------- --------
Total liabilities and shareholders' equity $442,312 $423,283
======== ========
SEE ACCOMPANYING NOTES.
6
Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Six Months Ended
June 30,
--------
OPERATING ACTIVITIES 2001 2000
---- ----
Net income (loss) $ 22,873 $(26,460)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 8,501 7,493
Deferred income taxes 8,316 1,193
Stock option income tax benefit 1,812 5,576
Other, net 2 (21)
Asset impairment charge -- 3,722
Write-off of CVC inventory -- 15,322
Cumulative effect of change in accounting principle, net of taxes -- 18,382
Changes in operating assets and liabilities:
Accounts receivable 8,935 (20,316)
Inventories (35,798) (9,136)
Accounts payable 353 6,720
Accrued expenses, deferred gross profit and other current
liabilities (4,555) (18,019)
Other, net (2,030) 1,472
Recoverable income taxes -- (9,487)
Operating activities three months ended 12/31/99 - CVC -- 638
-------- --------
Net cash provided by (used in) operating activities 8,409 (22,921)
INVESTING ACTIVITIES
Capital expenditures (9,083) (11,923)
Proceeds from sale of property, plant and equipment 11 230
Payment of net assets of businesses acquired (7,529) (7,177)
Net purchases of short-term investments (733) (1,295)
Proceeds from sale of business -- 3,000
Investing activities three months ended 12/31/99- CVC -- (528)
-------- --------
Net cash used in investing activities (17,334) (17,693)
FINANCING ACTIVITIES
Proceeds from stock issuance 2,358 11,886
Repayment of long-term debt, net (809) (8,570)
Net proceeds from borrowings under line of credit -- 17,005
Financing activities three months ended 12/31/99- CVC -- 3,627
-------- --------
Net cash provided by financing activities 1,549 23,948
Effect of exchange rates on cash and cash equivalents 4,197 672
-------- --------
Net change in cash and cash equivalents (3,179) (15,994)
Cash and cash equivalents at beginning of period 63,420 29,852
-------- --------
Cash and cash equivalents at end of period $ 60,241 $ 13,858
======== ========
SEE ACCOMPANYING NOTES.
7
VEECO INSTRUMENTS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 - BASIS OF PRESENTATIONPresentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation (consisting of normal recurring accruals) have been included. Operating results for the six months ended June 30, 20012002 are not necessarily indicative of the results that may be expected for the year ending December 31, 2001.2002. For further information, refer to the financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2000.2001.
Earnings per share are computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share are computed using the weighted average number of common and common equivalent shares outstanding during the period. The effect of common equivalent shares for the three months and six months ended June 30, 20002002 was antidilutive, and therefore were excluded from the diluted weighted average shares outstanding.earnings per share is not presented for such periods.
The following table sets forth the reconciliation of diluted weighted average shares outstanding:
| Three Months Ended June 30, | Three Months Ended June 30, | ||||||
---|---|---|---|---|---|---|---|---|
| 2002 | 2001 | 2002 | 2001 | ||||
| (In thousands) | (In thousands) | ||||||
Weighted average shares outstanding | 29,083 | 24,767 | 29,052 | 24,722 | ||||
Dilutive effect of stock options and warrants | — | 448 | - | 500 | ||||
Diluted weighted average shares outstanding | 29,083 | 25,215 | 29,052 | 25,222 | ||||
The carrying amountsassumed conversion of available-for-sale securities approximate fair value.
The followingsubordinated convertible notes is a summary of available-for-sale securities:
Note 2—Balance Sheet Information
Inventories
Interim inventories have been determined by lower of cost (principally first-in, first-out) or market. Inventories consist of:
| June 30, 2002 | December 31, 2001 | ||||
---|---|---|---|---|---|---|
| (In thousands) | |||||
Raw materials | $ | 58,885 | $ | 59,065 | ||
Work-in-progress | 26,012 | 26,068 | ||||
Finished goods | 19,266 | 16,970 | ||||
$ | 104,163 | $ | 102,103 | |||
8
Other Balance Sheet Information
| June 30, 2002 | December 31, 2001 | ||||
---|---|---|---|---|---|---|
| (In thousands) | |||||
Allowance for doubtful accounts | $ | 3,149 | $ | 3,350 | ||
Accumulated depreciation and amortization of property, plant and equipment | $ | 61,110 | $ | 54,826 | ||
Accumulated amortization of intangible assets | $ | 20,098 | $ | 13,179 |
Reclassifications
Certain amounts in the 2001 condensed consolidated financial statements have been reclassified to conform to the 2002 presentation.
Note 3—Segment Information
The following represents the reportable product segments of the Company, in thousands:
| Process Equipment | Metrology | Unallocated Corporate Amount | Restructuring Charges | Total | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Three Months Ended June 30, 2002 | |||||||||||||||
Net sales | $ | 36,923 | $ | 40,416 | $ | — | $ | — | $ | 77,339 | |||||
Income (loss) from continuing operations before interest, taxes and amortization | (2,396 | ) | 6,695 | (2,075 | ) | (1,050 | ) | 1,174 | |||||||
Three Months Ended June 30, 2001 | |||||||||||||||
Net sales | 73,245 | 38,850 | — | — | 112,095 | ||||||||||
Income (loss) from continuing operations before interest, taxes and amortization | 12,014 | 6,144 | (764 | ) | (1,000 | ) | 16,394 | ||||||||
Six Months Ended June 30, 2002 | |||||||||||||||
Net sales | 81,775 | 75,713 | — | — | 157,488 | ||||||||||
Income (loss) from continuing operations before interest, taxes and amortization | (4,252 | ) | 11,816 | (4,020 | ) | (1,887 | ) | 1,657 | |||||||
Total assets | 309,312 | 130,906 | 312,347 | — | 752,565 | ||||||||||
Six Months Ended June 30, 2001 | |||||||||||||||
Net sales | 153,542 | 83,939 | — | — | 237,481 | ||||||||||
Income (loss) from continuing operations before interest, taxes and amortization | 28,316 | 13,493 | (3,372 | ) | (1,000 | ) | 37,437 | ||||||||
Total assets | $ | 183,599 | $ | 102,962 | $ | 154,260 | $ | — | $ | 440,821 |
Note 4—Comprehensive Income (Loss)
Total comprehensive income (loss) was $1.9 million and ($2.1) million for the three and six months ended June 30, 2002, respectively, and $9.7 million and $21.7 million for the three and six months ended June 30, 2001, and ($14.5) million and ($27.3)
million for the three and six months ended June 30, 2000, respectively. Other comprehensive income (loss) is comprised of foreign currency translation adjustments, minimum pension liability and net unrealized holding gains and losses on available-for-sale securities.
10
VEECO INSTRUMENTS INC. AND SUBSIDIARIES
NOTE 5 - RECENT EVENTS
On July 16, 2001,
Note 5—Recent Accounting Pronouncements
Effective January 1, 2002, the Company acquired ThermoMicroscopes Corp. ("TM"), a
manufacturer of atomic force microscopes, scanning probe microscopes, near field
optical microscopesadopted SFAS No. 142,Goodwill and probes. TM, formerly a subsidiary of Thermo Electron
Corporation, is based in Sunnyvale, California.Other Intangible Assets. The acquisition was accounted
for using the purchase method of accounting. Results of operations prior to the
acquisitionintangible assets that are not material to the Condensed Consolidated Statements of
Operations for the threeclassified as goodwill and six months ended June 30, 2001.
On April 19, 2001, the Company entered into a new revolving credit facility (the
"Facility"), which replaces the Company's prior $40 million revolving credit
facility. The Facility provides the Companythose with up to $100 million of
availability. The Facility's interest rate is the prime rate of the lending
banks and is adjustable to a maximum rate of 1/4% above the prime rate in the
event the Company's ratio of debt to cash flow exceeds a defined ratio. A LIBOR
based interest rate option is also provided. The Facility has a term of four
years and borrowingsindefinite lives are no longer amortized under the Facility may be used for general corporate
purposes, including working capital and acquisitions. The Facility contains
certain restrictive covenants, which among other things, impose limitationsprovisions of this standard. Intangible assets with respect to incurrence of indebtedness, limitation on the payment of dividends,
long-term leases, investments, mergers, consolidations and sales of assets. The
Company is also required to satisfy certain financial tests. As of June 30,
2001, no borrowings were outstanding under the Facility.
NOTE 6 - RECENT ACCOUNTING PRONOUNCEMENTS
In June 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 141, BUSINESS COMBINATIONS, and No. 142,
GOODWILL AND OTHER INTANGIBLE ASSETS, effective for fiscal years beginning after
December 15, 2001. Under the new rules, goodwill and other intangible assets
deemed to have indefinitedefinite lives will no longer be amortized but will be subject
to annual impairment tests in accordance with the Statements. Other intangible
assets will continue to be
9
amortized over their estimated useful lives. In addition,
Statement 141 eliminateslife. The standard also requires that an impairment test be performed to support the pooling-of-interests methodcarrying value of accounting for
business combinations, except for qualifying business combinations that were
initiated prior to July 1, 2001.goodwill and indefinite lived intangible assets at least annually.
The Company will apply the new rules on accounting for goodwill and other
intangible assets beginning in the first quarter of 2002. Application of the
nonamortization provisions of the Statement is expected to result in a decrease
in amortization expense in 2002 of approximately $1.6 million. In addition, any
goodwill recorded as a result of the acquisition of TM will not be amortized in
2001 in accordance with Statement 142. During 2002, the Company will performcompleted the first of the required impairment tests of goodwill and indefinite lived intangible assets in the first quarter of 2002. The Company utilized an independent appraisal as part of its evaluation process. The Company has reviewed its business and determined that four reporting units be reviewed for impairment in accordance with the standard. The four reporting units are New York Equipment and Telecommunications Equipment, which comprise the process equipment operating segment, and Atomic Force Microscope ("AFM") and Optical, which comprise the metrology operating segment. Based upon the independent appraisal and the judgment of management, it was determined that there is no impairment to goodwill or intangibles with definite lives as of January 1, 2002.
The Company has not yet determined whatfollowing table outlines the effectcomponents of these tests will be on earningsgoodwill and intangible assets by business segment at June 30, 2002 after the financial positionadoption of the Company.
Onstandard, in thousands:
| Process Equipment Segment | Metrology Segment | Unallocated Corporate | Total | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Goodwill | $ | 102,808 | $ | 22,777 | $ | — | $ | 125,585 | ||||
Intangible assets | 40,285 | 11,913 | 7,113 | 59,311 | ||||||||
Total | $ | 143,093 | $ | 34,690 | $ | 7,113 | $ | 184,896 | ||||
Net income for the three and six months ended June 30, 2001, includes approximately $0.4 million and $0.8 million of goodwill amortization expense, respectively. Excluding these amounts would have resulted in net income per common share and diluted net income per common share of $0.42 and $0.41, and $0.96 and $0.94, respectively for the three and six months ended June 30, 2001.
In January 1, 2001,2002, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended
11
by SFAS No. 138, "Accounting144,Certain Derivative Instrumentsthe Impairment or Disposal of Long Lived Assets (FAS 144), which addresses financial accounting and Hedging
Activities -- An Amendmentreporting for the impairment or disposal of FASB Statement No. 133."long-lived assets and supersedes SFAS No. 133 requires
that all derivatives, including foreign currency exchange contracts,121,Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be recognizedDisposed Of, and the accounting and reporting provisions of APB Opinion No. 30,Reporting the Results of Operations for a Disposal of a Segment of a Business. Adoption of this Statement did not have an impact on the balance sheet at fair value, which is recorded through
earnings. If a derivative is a qualifying hedge, depending on the natureCompany's consolidated financial position or results of the
hedge, changes in the fair value of the derivative are either offset against the
change in fair value of the underlying assets or liabilities through earnings or
recognized in accumulated comprehensive income until the underlying hedged item
is recognized in earnings. The ineffective portion of a derivative's change in
fair value is to be immediately recognized in earnings.operations.
Note 6—Recent Events
Restructuring
During the six months ended June 30, 2002, the Company incurred a restructuring charge of approximately $1.9 million related to the reduction in work force announced in both the fourth quarter of 2001 and the first quarter of 2002. Of this amount, approximately $1.1 million was recorded in the second quarter of 2002. The $1.9 million charge includes severance related costs for approximately 90 employees which included both management and manufacturing employees located at each of the Company's process equipment operations, as well as at the Company's Minnesota metrology facility. As of June 30, 2002, approximately $0.7 million has been expended and approximately $1.2 million remains accrued, which is expected to be paid during the next six months.
During the year ended December 31, 2001, the Company recorded restructuring charges of approximately $20.0 million in response to the significant downturn in the telecommunications industry and the overall weak business environment. These charges consisted of a $13.6 million write-off of inventory related to order cancellations and the rationalization of certain product lines, $3.0 million
10
related to personnel and business relocation costs and $3.4 million related to the write-down of long-lived assets. The $3.0 million charge for personnel and business relocation costs principally related to plant consolidations and a workforce reduction of approximately 230 employees, which included both management and manufacturing employees located in all operations of the Company. As of June 30, 2002, approximately $2.2 million of the $3.0 million charge for relocation and termination benefits has been paid and approximately $0.8 million remains accrued. Of the $0.8 million, $0.3 million relates to rental payments on a lease agreement for space that the Company has vacated and will be paid over the next four years.
Discontinued Operations
In May 2002, the Company sold the remainder of its industrial measurement business. During the six months ended June 30, 2002, the Company recorded an additional loss on the disposal of the discontinued operations of $0.3 million, net of taxes of approximately $0.2 million.
Note 7—Subsequent Events
On July 11, 2002, the Company signed a definitive merger agreement with FEI Company ("FEI"), of Hillsboro, Oregon. Under the terms of the agreement, FEI shareholders will receive 1.355 shares of Veeco common stock for each share of FEI common stock outstanding. Based upon FEI's approximately 32 million shares outstanding, the FEI shareholders will receive approximately 44 million Veeco shares. The merger, which will be accounted for under the purchase method, is expected to close in the fourth quarter of 2002, subject to the approval of shareholders of both companies, certain regulatory approvals and other customary closing conditions. Upon consummation of the merger, FEI will become a wholly-owned subsidiary of Veeco, and Veeco will be renamed Veeco FEI Inc. FEI designs, manufactures, markets and services products based on focused charged particle beam technology. FEI's products include transmission electron microscopes (TEM), scanning electron microscopes (SEM), focused ion-beam systems (FIBs) and DualBeam systems that combine a FIB column and a SEM column on a single platform. FEI also designs, manufactures and sells certain components of electron microscopes and FIBs to other manufacturers.
11
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Results of Operations.
Three Months Ended June 30, 2002 and 2001
Net sales of $77.3 million for the three months ended June 30, 2002, represent a decrease of $34.8 million, or 31%, from the 2001 comparable period sales of $112.1 million, resulting principally from a decrease in sales of process equipment products. Sales in the U.S., Europe, Japan and Asia Pacific, accounted for 36%, 21%, 18% and 25%, respectively, of the Company's net sales for the three months ended June 30, 2002. Sales in the U.S. decreased 56% from the comparable 2001 period due to a 67% decline in U.S. process equipment sales, particularly for sales of optical filter deposition products to the telecommunications industry, as well as a 27% decrease in U.S. metrology sales. Sales in Europe and Asia Pacific increased 32% and 81%, respectively. The increase in Europe is principally a result of $3.7 million of sales of molecular beam epitaxy (MBE) equipment produced by Veeco's Applied Epi subsidiary, which was acquired by the Company in September 2001. The increase in Asia Pacific is principally a result of an increase in etch and deposition equipment sales to the data storage industry, as well as an increase of $6.5 million in sales of optical metrology products. Sales in Japan decreased 49% from the 2001 comparable period, due primarily to declines in sales in both etch and deposition and optical filter deposition products. The Company believes that there will continue to be quarter-to-quarter variations in the geographic concentration of sales.
Process equipment sales of $36.9 million for the three months ended June 30, 2002, decreased by $36.3 million, or 50%, from the comparable 2001 period. The decrease in process equipment sales has resulted from a decline in sales of optical filter deposition equipment to the telecommunications industry, as well as a decrease in sales to the data storage industry. Metrology sales of $40.4 million for the three months ended June 30, 2002, increased slightly (4%) from the comparable prior period sales of $38.9 million.
Veeco received $78.2 million of orders during the three months ended June 30, 2002, a 3% decrease compared to $80.3 million of orders for the comparable 2001 period. Process equipment orders decreased 8% to $37.1 million, due to a decline in orders from optical telecommunications and data storage customers. Veeco's Ion Tech subsidiary had a decrease of $2.3 million, or 25%, in orders from the comparable 2001 period. Etch and deposition equipment orders decreased 19% to $25.2 million from $31.2 million for the comparable 2001 period. Metrology orders increased slightly (2%) to $41.1 million. The Company's book/bill ratio for the second quarter of 2002 was 1.01.
The order and sales declines are a result of the general economic slowdown that has had a very significant impact on the telecommunications, data storage and semiconductor markets that the Company serves.
The Company's backlog generally consists of product orders for which a purchase order has been received and which are scheduled for shipment within twelve months. Veeco schedules production of its systems based on order backlog and customer commitments. Because certain of the Company's orders require products to be shipped in the same quarter in which the order was received, and due to possible changes in delivery schedules, cancellations of orders and delays in shipment, the Company does not believe that the level of backlog at any point in time is an accurate indicator of the Company's future performance. Due to the current weak business environment, the Company may experience cancellation and/or rescheduling of orders.
Gross profit, as a percentage of net sales decreased to 45.5%, for the second quarter of 2002, from 47.4% for the comparable 2001 period. The decline is attributable to the decrease in sales volume of process equipment products.
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Selling, general and administrative expenses of $19.3 million for the three months ended June 30, 2002, decreased by approximately $1.4 million from the 2001 comparable period due principally to cost reductions implemented by the Company in the fourth quarter of 2001 and the first quarter of 2002, as well as a decrease in selling and commission expenses as a result of the decreased sales volume. The decrease is partially offset by the selling, general and administrative expenses of Veeco's Applied Epi and TM Microscopes ("TM") subsidiaries, which were acquired in the third quarter of 2001, and thus had no comparable spending in the second quarter of 2001.
Research and development expenses of $13.9 million for the three months ended June 30, 2002, decreased by approximately $0.9 million, or 6%, from the comparable period of 2001, due primarily to cost reduction efforts implemented by the Company in the fourth quarter of 2001 and the first quarter of 2002.
Amortization expense totaled $3.2 million in the three months ended June 30, 2002 compared with $0.9 million in 2001. The increase is due primarily to the intangible assets acquired in connection with the acquisitions of Applied Epi and TM, offset in part by $0.4 million of reduced amortization expense related to the accounting requirement to no longer amortize goodwill, effective January 1, 2002, in accordance with SFAS No. 142, Goodwill and Other Intangible Assets. Under SFAS No. 142, goodwill is to be reviewed annually for impairment. As of January 1, 2002, no impairment exists.
During the three months ended June 30, 2002, the Company recorded a restructuring charge of $1.1 million. This charge includes severance related costs for approximately 30 employees, which included both management and manufacturing employees, located in each of the Company's process equipment group and the Minnesota metrology facility. As of June 30, 2002, approximately $0.2 million has been expended and approximately $0.9 million remains accrued.
Other (income) expense, net, for the three months ended June 30, 2002, decreased $0.5 million from the comparable 2001 period due to the decrease in foreign currency exchange losses.
Interest expense, net, of $1.5 million for the three months ended June 30, 2002 increased $1.9 million from the comparable 2001 period as a direct result of the issuance of $220.0 million of 4.125% convertible subordinated notes, which occurred in December 2001 and January 2002.
Income taxes for the three months ended June 30, 2002, amounted to a $1.9 million income tax benefit, or 53% of loss before income taxes, as compared to a $5.4 million income tax provision, or 34% of income before income taxes, for the same period of 2001. The higher than statutory effective benefit rate of 53% in 2002 is a result of the impact of R&D tax credits along with foreign tax benefits.
Quarterly information for the three months ended June 30, 2001, has been restated from that previously filed on the Quarterly Report on Form 10-Q for such period, due to the required accounting to reflect the discontinued operations of the Company's industrial measurement segment, which was recorded in the quarter ended December 31, 2001.
Six Months Ended June 30, 2002 and 2001
Net sales were $157.5 million for the six months ended June 30, 2002, representing a decrease of approximately $80.0 million, or 34%, from the comparable 2001 period. The decrease is primarily a result of a decrease in process equipment sales. Sales in the U.S., Europe, Japan and Asia Pacific accounted for 46%, 17%, 17% and 20%, respectively, of the Company's net sales for the six months ended June 30, 2002. Sales in the U.S. decreased by 47%, principally as a result of decreased process equipment sales of optical filter deposition products to the telecommunications industry, as well as a decline in sales to the data storage industry. Metrology sales also decreased, primarily as a result of a decline in sales to customers in the semiconductor industry. Sales in Europe remained relatively flat when compared to the comparable 2001 period. Sales in Japan decreased by 49%, primarily as a result of decreases in process equipment sales, as well as decreased metrology sales from the comparable
13
2001 period. Asia Pacific sales increased by 45% principally as a result of a 78% increase in process equipment sales, primarily from sales of etch and deposition equipment to data storage customers. Metrology sales for Asia Pacific also increased by 32% from the prior period, as a result of increased sales of optical metrology products.
Process equipment sales were $81.8 million for the six months ended June 30, 2002, a decrease of approximately $71.8 million, or 47%, from the comparable 2001 period. The decrease is primarily due to a decrease in process equipment sales of $89.3 million to the telecommunications and data storage industries, offset in part by sales of $17.5 million of MBE equipment produced by Veeco's Applied Epi subsidiary. Metrology sales for the six months ended June 30, 2002, were $75.7 million, a decrease of approximately $8.2 million, or 10%, compared to the comparable 2001 period, reflecting a 9% drop in sales of AFMs and a 13% decline in optical metrology sales.
Veeco received $148.5 million of orders for the six months ended June 30, 2002, a 22% decrease compared to $190.5 million of orders in the comparable 2001 period. Process equipment orders decreased 33% to $75.6 million, principally reflecting decreases in both telecommunications and data storage orders. Metrology orders decreased 6% to $72.9 million, reflecting a decrease in AFM orders. The book/bill ratio for the six months ended June 30, 2002 was 0.94.
Gross profit for the six months ended June 30, 2002, as a percentage of net sales decreased to 43.8%, from 47.1% for the comparable 2001 period. The decline from the prior period is primarily attributable to the volume decrease in process equipment sales, in particular optical filter deposition products to the telecommunications industry.
Selling, general and administrative expenses of $38.4 million for the six months ended June 30, 2002, represent a decrease of approximately $3.5 million, or 8%, from the comparable 2001 period, due principally to a decrease in selling and commission expense in response to the decreased sales volume, as well as cost reduction efforts implemented by the Company in the fourth quarter of 2001 and the first quarter of 2002. The decrease is partially offset by the selling, general and administrative expenses of Applied Epi and TM subsidiaries, which were acquired by the Company in the third quarter of 2001, and thus had no comparable spending in the first six months of 2001.
Research and development expenses of $27.3 million for the six months ended June 30, 2002, represent a decrease of approximately $2.7 million, or 9%, from the comparable period of 2001, as a result of the cost reduction efforts implemented by the Company in the fourth quarter of 2001 and the first quarter of 2002.
During the six months ended June 30, 2002, the Company incurred restructuring charges of $1.9 million in connection with a reduction in work force announced in the fourth quarter of 2001 and the first quarter of 2002. This charge includes severance related costs for approximately 90 employees which included both management and manufacturing employees located at each of the Company's process equipment operations and Minnesota metrology facility. As of June 30, 2002, approximately $0.7 million has been expended and approximately $1.2 million remains accrued. During the year ended December 31, 2001, the Company recorded restructuring charges of approximately $20.0 million in response to the significant downturn in the telecommunications industry and the overall weak business environment. These charges consisted of a $13.6 million write-off of inventory related to order cancellations and the rationalization of certain product lines, $3.0 million related to personnel and business relocation costs and $3.4 million related to the write-down of long-lived assets. The $3.0 million charge for personnel and business relocation costs principally related to plant consolidations and a workforce reduction of approximately 230 employees, which included both management and manufacturing employees located in all operations of the Company. As of June 30, 2002, approximately $2.2 million of the $3.0 million charge for relocation and termination benefits has been paid and approximately $0.8 million remains accrued.
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Amortization expense totaled $6.9 million in the six months ended June 30, 2002 compared with $2.3 million in 2001 period, due to the acquisition of intangible assets discussed in the three-month results. This amount is offset in part by $0.8 million of reduced amortization expense related to the accounting requirement to no longer amortize goodwill, effective January 1, 2002, in accordance with SFAS No. 142, Goodwill and Other Intangible Assets. Under SFAS No. 142, goodwill is to be reviewed annually for impairment. As of January 1, 2002, no impairment exists.
Other (income) expense, net, for the six months ended June 30, 2002, decreased $1.9 million from the comparable 2001 period due to the foreign currency exchange losses experienced in the first quarter of 2001, which did not occur in 2002.
Interest expense, net, of $3.0 million for the six months ended June 30, 2002, increased $4.1 million from the comparable 2001 period as a direct result of the issuance of $220.0 million of 4.125% convertible subordinated notes, which occurred in December 2001 and January 2002.
Income taxes for the six months ended June 30, 2002, amounted to a $3.5 million income tax benefit, or 42% of loss before income taxes, as compared to a $12.6 million income tax provision, or 35% of income before income taxes, for the same period of 2001.
Quarterly information for the six months ended June 30, 2001, has been restated from that previously filed on the Quarterly Report on Form 10-Q for such period, due to the required accounting to reflect the discontinued operations of the Company's industrial measurement segment, which was recorded in the quarter ended December 31, 2001.
Critical Accounting Policies
General: Veeco's discussion and analysis of its financial condition and results of operations are based upon Veeco's consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires Veeco to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an on-going basis, management evaluates its estimates and judgments, including those related to derivatives, bad debts, inventories, intangible assets, income taxes, warranty obligations, restructuring costs and contingent litigation. Management bases its estimates and judgments on historical experience and on various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The Company considers certain accounting policies related to revenue recognition, the valuation of inventories, the impairment of goodwill and intangible assets and derivatives to be critical policies due to the estimation processes involved in each.
Revenue Recognition: The Company recognizes revenue when persuasive evidence of an arrangement exists, the price of goods or services being sold is fixed or determinable and collectibility is reasonably assured. For products produced according to the Company's published specifications, where no installation is required or installation is deemed perfunctory and no substantive customer acceptance provisions exist, revenue is recognized when title passes to the customer, generally upon shipment. For products produced according to a particular customer's specifications, revenue is recognized when the product has been tested and it has been demonstrated that it meets the customer's specifications and title passes to the customer. The amount of revenue recorded is reduced by the amount of any customer retention (generally 10% to 20%), which is not payable by the customer until installation is completed and final customer acceptance is achieved. Installation is not deemed to be essential to the functionality of the equipment since installation does not involve significant changes to the features or capabilities of the equipment or building complex interfaces and connections. In addition, the equipment could be installed by the customer or other vendors and generally the cost of installation approximates only 1% to 2% of the sales value of the related equipment. For new applications of the
15
Company's existing products, for new products or for products with substantive customer acceptance provisions where performance cannot be fully assessed prior to meeting customer specifications at the customer site, revenue is recognized upon completion of installation and receipt of final customer acceptance. Service and maintenance contract revenues are recorded as deferred revenue, which is included in other accrued expenses, and recognized as revenue on a straight-line basis over the service period of the related contract. The Company provides for warranty costs at the time the related revenue is recognized.
Inventory Valuation: Inventories are stated at the lower of cost (principally first-in, first-out method) or market. Management evaluates the need to record adjustments for impairment of inventory on a quarterly basis. The Company's policy is to assess the valuation of all inventories, including raw materials, work-in-progress, finished goods and spare parts. Obsolete inventory or inventory in excess of management's estimated usage for the next 18 to 24 month's requirements is written-down to its estimated market value, if less than its cost. Inherent in the estimates of market value are management's estimates related to Veeco's future manufacturing schedules, customer demand, technological and/or market obsolescence, possible alternative uses and ultimate realization of excess inventory.
Goodwill and Intangible Asset Impairment: The Company has significant intangible assets related to goodwill and other acquired intangibles. In assessing the recoverability of the Company's goodwill and other intangible assets, the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of the respective assets. Changes in strategy and/or market conditions could significantly impact these assumptions, and thus Veeco may be required, during the annual review process, to record an impairment charge for these assets in accordance with SFAS No. 142.
Derivatives: During the six months ended June 30, 2002, the Company used derivative financial instruments to minimize the impact of foreign exchange rate changes on earnings and cash flows. In the normal course of business, operations are exposed to fluctuations in foreign exchange rates. In order to reduce the effect of fluctuating foreign currencies on short-term foreign currency-denominated intercompany transactionsbalances and other known foreign currency exposures, the Company enters into monthly forward contracts (which during the six months ended June 30, 20012002, included alla majority of the Company's foreign subsidiaries). The Company does not use derivative financial instruments for trading or speculative purposes. The Company's forward contracts do not subject it to material risks due to exchange rate movements because gains and losses on these contracts are intended to offset exchange gains and losses on the underlying assets and liabilities; both the forward contracts and the underlying assets and liabilities are marked-to-market through earnings. For the threeearnings.
Liquidity and six months ended June 30,
2001, approximately $62,000 and $991,000, respectively, of realized gains on
forward exchange contractsCapital Resources
Cash flows used in operations were recorded and included in other expense, net. As
of June 30, 2001, approximately $767,000 of gains related to forward contracts
are included in prepaid expenses and other current assets and have been
subsequently received in July 2001. As of June 30, 2001, there were no open
forward contracts.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
RESULTS OF OPERATIONS.
THREE MONTHS ENDED JUNE 30, 2001 AND 2000
Net sales of $113.5 million for the three months ended June 30, 2001, represent
an increase of $11.2 million, or 11%, from the 2000 comparable period sales of
$102.3 million, resulting principally from an increase in sales of process
equipment products. Sales in the U.S., Europe, Japan and Asia Pacific, accounted
for 57%, 11%, 23% and 9%, respectively, of the Company's net sales for the three
months ended June 30, 2001. Sales in the U.S. increased 36% from the comparable
2000 period due to a 40% increase in U.S. process equipment sales, resulting
from an increase in optical telecommunications sales for Veeco's Ion Tech
subsidiary. Sales in Europe and Asia Pacific decreased 29% and 39%,
respectively. The decrease in Europe is principally a result of lower sales of
process equipment products. The decrease in Asia Pacific is principally a result
of a decline in sales of optical metrology products, partially offset by
increased process equipment sales. Sales in Japan increased 31% from the 2000
comparable period due to increases in both process equipment and metrology
sales. The Company believes that there will continue to be quarter-to-quarter
variations in the geographic concentration of sales.
Process equipment sales of $73.2 million for the three months ended June 30,
2001, increased by $15.5 million, or 27%, over the comparable 2000 period. The
above noted increase in process equipment is due to increased sales to the
optical telecommunications industry, which were partially offset by decreased
sales to the data storage industry. Metrology sales of $38.9 million for the
three months ended June 30, 2001, represent a slight decrease of approximately
$3 million, or 7%, from the 2000 comparable period sales of $41.8 million. The
decrease is primarily attributable to lower sales of optical metrology products
in the 2001 period, offset partly by increased sales of the Company's atomic
force microscope (AFM) products.
Veeco received $81.5 million of orders during the three months ended June 30,
2001, a 38% decrease compared to $132.4 million of orders for the comparable
2000 period. Process equipment orders decreased 52% to $40.1 million, due
primarily to a decline in orders from optical telecommunications customers.
Veeco's Ion Tech subsidiary had a decrease of $30.0 million, or 77%, in orders
from the comparable 2000 period. Etch and deposition equipment orders decreased
30% to $31.2 million from $44.6 million for the comparable 2000 period.
Metrology orders decreased by 13% to $40.2 million, reflecting a decrease in
orders for optical metrology products, partially offset by a 12% increase in AFM
orders. The Company's book/bill ratio for the second quarter of 2001 was 0.72.
For the three months ended June 30, 2001, the Company experienced order
cancellations, primarily for products related to the optical telecommunications
market, representing approximately 7% of the June 30, 2001 backlog. The Company
also experienced rescheduling of order delivery dates by customers. Due to the
weak business environment, the Company may continue to experience cancellation
or rescheduling of orders.
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Gross profit, as a percentage of net sales increased to 47.2%, from 28.3% for
the comparable 2000 period. Excluding a non-cash charge of $15.3 million in June
2000, for the write-off of inventory related to the merger with CVC Inc.
("CVC"), gross profit was 43.3%. This improvement results in part from the
volume increase in Ion Tech sales, partially offset by the volume decline in
optical metrology sales. In addition, gross margin improved due to overhead
spending reductions in the process equipment area as well as a more favorable
mix in optical metrology products.
Research and development expenses of $15.4 million for the three months ended
June 30, 2001, increased by approximately $1.3 million, or 10%, over the
comparable period of 2000, due primarily to the Company's development of next
generation products for AFMs and Ion Tech tools.
Selling, general and administrative expenses of $21.3 million for the three
months ended June 30, 2001, increased by approximately $2.1 million from the
2000 comparable period due to an increase in selling related expenses,
principally as a result of the increased sales volume.
During the three months ended June 30, 2001, the Company recorded a
restructuring charge of $1.0 million related to the workforce reduction of
approximately 130 people, as a result of the slowdown in orders. As of June 30,
2001, approximately $230,000 has been expended and approximately $770,000
remains accrued. During the three months ended June 30, 2000, Veeco incurred
non-recurring charges of $33.0 million, in conjunction with the merger with CVC.
Of these charges, a $15.3 million non-cash charge related to a write-off of
inventory (included in cost of sales), $14.0 million represented merger and
reorganization costs (of which $9.2 million related to transaction costs and
$4.8 million pertained to duplicate facility and personnel costs) and $3.7
million was for the write-down of long-lived assets.
Income taxes for the three months ended June 30, 2001, amounted to $5.1 million,
or 34% of income before income taxes, as compared to an $8.8 million tax
benefit, or 38% of loss before income taxes, for the same period of 2000.
Effective January 1, 2000, the Company changed its method of accounting for
revenue recognition in accordance with Staff Accounting Bulletin (SAB) No. 101,
REVENUE RECOGNITION IN FINANCIAL STATEMENTS, which resulted in a charge to
income for the cumulative effect of change in accounting principle. The Company
recognized approximately $15.3 million in revenue during the three months ended
June 30, 2000, that was included in the cumulative effect adjustment. The effect
of that revenue was to increase second quarter income by $3.8 million (net of
income taxes of $2.7 million).
Quarterly information, previously filed on Form 10-Q, for the three months ended
June 30, 2000, has been restated due to the adoption of SAB 101. The adoption of
SAB 101 had the effect of increasing net sales and decreasing the net loss for
the second quarter of 2000 by $8.7 million and $1.2 million, respectively, and
basic and diluted earnings per share increased by $0.05.
In June 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 141, BUSINESS COMBINATIONS, and No. 142,
GOODWILL AND OTHER
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INTANGIBLE ASSETS, effective for fiscal years beginning after December 15, 2001.
See footnote 6 to Condensed Consolidated Financial Statements for additional
disclosure.
SIX MONTHS ENDED JUNE 30, 2001 AND 2000
Net sales were $240.7 million for the six months ended June 30, 2001,
representing an increase2002, as compared to cash flows from operations of approximately $51.6$8.4 million or 27%, overfor the comparable 20002001 period. The increase is primarily due to an increase in Ion Tech
salesNet income adjusted for non-cash items provided operating cash flows of $49.2 million. Sales in the U.S., Europe, Japan and Asia Pacific
accounted for 58%, 12%, 21% and 9%, respectively, of the Company's net sales for
the six months ended June 30, 2001. Sales in the U.S. increased by 64%,
principally as a result of increased process equipment sales of optical
telecommunications equipment for Veeco's Ion Tech subsidiary, as well as an
increase in sales of AFMs. Sales in Europe remained relatively flat when
compared to the comparable 2000 period. Sales in Japan increased by 12% as a
result of an increase in AFM sales. Asia Pacific sales decreased by 25% as a
result of a 65% decline in optical metrology sales, partially offset by
increased Ion Tech sales.
Process equipment sales were $153.5$3.6 million for the six months ended June 30, 2001, an increase of approximately $40.72002 compared to $41.5 million or 36%, fromfor the comparable 2000 period, due to an increase in sales2001 period. The amount of Ion Tech products, partially offset
by a decline in etch and deposition sales. Metrology salesnet income adjusted for non-cash items for the six months ended June 30, 2001 were $83.9 million,2002 was offset by an increase in working capital of approximately $13.2
million, or 19%, compared to the comparable 2000 period, reflecting a 56%
increase in the sales of AFMs, offset by a 31% decline in optical metrology
sales.
Veeco received $194.3 million of orders$6.2 million. Accounts receivable for the six months ended June 30, 2001,2002 decreased by $19.1 million, primarily as a 20% decrease compared to $243.6 millionresult of orders in the comparable 2000
period. Process equipment orders decreased 22% to $113.0 million, principally
reflecting a decrease in optical telecommunications orders. Metrology orders
decreased 17% to $77.4 million, reflecting a 51% decrease in optical metrology
products, offset by a 10% increase in AFMs. The book/bill ratiosales volume from the fourth quarter of 2001. Deferred gross profit for the six months ended June 30, 2001 was 0.81.
Gross profit,2002 decreased by $7.8 million, primarily as a percentageresult of netrevenue recognition on tools that received final customer acceptance. Accrued expenses and other current liabilities decreased $17.2 million, primarily as a result of income tax payments made by the Company's Japanese subsidiary, and various other tax payments made in the first six months of 2002 related to sales increased to 46.9%, from 36.7% forand foreign taxes. In addition, accrued expenses decreased as a result of bonuses
16
paid in the comparable 2000 period. Excluding a non-cash chargefirst quarter of $15.3 million2002 and the decrease in June
2000, for the write-off of inventoryaccrued commission expense and customer deposits related to the merger with CVC, gross
profit was 44.8%. This improvement is principally attributable to thedecline in sales volume increase in Ion Tech and AFM sales.
Research and development expensesorders.
Cash flows from investing activities of $31.1$3.1 million for the six months ended June 30, 2001, represent an increase2002, are a result of approximatelythe proceeds from the sale of the Company's industrial measurement business of $3.7 million, or 14%, overwhich closed in May 2002, proceeds from the comparable periodsale of 2000,property, plant and equipment of $1.8 million and maturities of long-term investments of $1.8 million, offset by capital expenditures of $4.2 million.
In December 2001, the Company issued $200.0 million of 4.125% convertible subordinated notes, and in January 2002, the Company issued an additional $20.0 million of those notes pursuant to the exercise of an over-allotment option.
In connection with the subordinated notes issuance in December 2001 and January 2002, the Company purchased approximately $25.9 million of U.S. government securities, which have been pledged to the trustee under the indenture as security for the exclusive benefit of the holders of the notes. These securities will be sufficient to provide for the payment in full of the first six scheduled interest payments due primarily to expenditureson the notes and represent restricted investments. The first interest payment was made on June 21, 2002 in the amount of $4.5 million.
Funds from operations, the use of proceeds received from the issuance of the subordinated notes in connection with the developmentexercise of new productsthe over-allotment option in January 2002 and the maturities of long-term investments were used to pay for capital expenditures and the Ion Tech and AFM metrology product areas.
Selling, general and administrative expensesscheduled repayment of $43.0 million for the six months
endedlong-term debt.
At June 30, 2001, represent an increase of approximately $6.7 million, or
18%, over the comparable 2000 period. The increase is due to increased selling2002, Veeco's contractual cash obligations and commission expense as a result of increased sales volume, primarily related
to the Ion Tech and AFM product lines. As a percentage of sales, selling,
general and administrative expenses decreased to 17.9% of net sales in 2001 from
19.2% in 2000.
15
The Company recorded merger and restructuring charges during the six months
ended June 30, 2001 and 2000 as discussed previously under the three-month
results.
Other expense, net for the six months ended June 30, 2001, increased $1.6
million over the comparable 2000 period due to the increase in foreign currency
exchange losses.
Income taxes for the six months ended June 30, 2001, amounted to $12.0 million,
or 34% of income before income taxes, as compared to a $5.2 million income tax
benefit, or 39% of loss before income taxes, for the same period of 2000.
As noted above, the Company changed its method of accounting for revenue
recognition in accordance with SAB No. 101. The cumulative effect of this change
on prior years resulted in the deferral of $67.0 million of revenue and a charge
to income of $18.4 million (net of income taxes of $12.6 million) recorded as of
January 1, 2000, and is included in the Consolidated Statement of Operations for
the six months ended June 30, 2000. The Company recognized approximately $53.0
million of this deferred revenue during the six months ended June 30, 2000. The
effect of that revenue was to increase income in the first half of 2000 by $14.7
million (net of income taxes of $10.1 million).
Results for the six months ended June 30, 2000, previously filed on Form 10-Q,
have been restated due to the adoption of SAB 101. The adoption of SAB 101 had
the effect of increasing net sales by $17.7 million for the first half of 2000.
Net loss for the first half of 2000 increased by $13.7 million, and basic and
diluted loss per share increased by $0.59.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operations totaled $8.4 million for the six months ended
June 30, 2001, compared to cash used in operations of $22.9 million for the
comparable 2000 period. Cash provided by operations in 2001 includes adjustments
to reconcile net income to net cash provided principally from net income plus
non-cash charges for depreciation and amortization, deferred income taxes and a
stock option income tax benefit aggregating $41.5 million, plus a decrease in
accounts receivable and an increase in accounts payable of $8.9 million and $0.4
million, respectively. These items were partially offset by a decrease in
accrued expenses, deferred gross profit and other current liabilities of $4.6
million and an increase in inventories of $35.8 million during the six months
ended June 30, 2001. Accounts receivable decreased due to a slight decline in
sales volume from the fourth quarter of 2000 and improved customer collections.
The decrease in accrued expenses, deferred gross profit and other current
liabilities is due primarily to a decrease in deferred revenuecommitments relating to the
impact of SAB 101, partially offset by an increase in customer deposits.
Inventories increased by $35.8 million, due primarily to rescheduled shipments,
the impact of SAB 101its debt obligations and new product production. Net cash used in operations
for the six months ended June 30, 2000 included operating activities for the
three months ended December 31, 1999, related to CVC. Prior to the merger, CVC's
fiscal year end was September 30.
Net cash used in investing activities for the six months ended June 30, 2001,
totaled $17.3 million compared to $17.7 million for the comparable 2000 period.
Cash used in 2001 consisted
16
of $9.1 million of capital expenditures. The Company also expended $7.5 million
for the net assets of businesses acquired, which included a $6.3 million payment
of contingent consideration to the former shareholders of OptiMag, based upon
year 2000 sales and the appraised value of OptiMag and a $1.2 million payment to
the seller in connection with the atomic force microscope acquisition. Included
in the net cash used in investing activities for the six months ended June 30,
2000 is investing activities for the three months ended December 31, 1999,
related to CVC.
Net cash provided by financing activities for the six months ended June 30,
2001, totaled $1.5 million, compared to $23.9 million for the comparable 2000
period. Cash provided by financing activities in 2001 consisted of proceeds of
$2.4 million from stock issuances upon exercise of stock options, offset by $0.8
million of debt repayments. Net cash provided by financing activities for the
six months ended June 30, 2000 included financing activities for the three
months ended December 31, 1999, related to CVC.
In connection with the acquisition of TM, the Company expended approximately
$22.0 million in July 2001.
On April 19, 2001, the Company entered into a new revolving credit facility (the
"Facility"), which replaces the Company's prior $40 million revolving credit
facility. The Facility provides the Company with up to $100 million of
availability. The Facility's interest rate is the prime rate of the lending
banks and is adjustable to a maximum rate of 1/4% above the prime rate in the
event the Company's ratio of debt to cash flow exceeds a defined ratio. A LIBOR
based interest rate option is also provided. The Facility has a term of four
years and borrowings under the Facility may be used for general corporate
purposes, including working capital and acquisitions. The Facility contains
certain restrictive covenants, which among other things, impose limitations with
respect to incurrence of indebtedness, limitation on the payment of dividends,
long-term leases, investments, mergers, consolidations and sales of assets. The
Company is also required to satisfy certain financial tests. As of June 30,
2001, no borrowings were outstanding under the Company's credit facility.lease payments are as follows (in thousands):
Contractual Obligations | Total | Less than 1 year | 1-3 years | 4-5 years | After 5 years | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Long-term debt | $ | 238,248 | $ | 3,519 | $ | 2,595 | $ | 1,261 | $ | 230,873 | |||||
Operating leases | 16,241 | 1,637 | 4,558 | 3,205 | 6,841 | ||||||||||
Letters of credit | 3,283 | 3,271 | 12 | — | — | ||||||||||
$ | 257,772 | $ | 8,427 | $ | 7,165 | $ | 4,466 | $ | 237,714 | ||||||
The Company believes that existing cash balances together with cash generated from operations and amounts available under the FacilityCompany's $100.0 million credit facility will be sufficient to meet the Company's projected working capital and other cash flow requirements for the next twelve months.
17
ITEM
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
Veeco's investment portfolio consists of cash equivalents, commercial paperQuantitative and obligations of U.S. Government agencies. These investments are considered
available-for-sale securities; accordingly, the carrying amounts approximate
fair value. Assuming June 30, 2001 variable debt and investment levels, a
one-point change in interest rates would not have a material impact on net
interest income.Qualitative Disclosure About Market Risk.
Veeco's net sales to foreign customers represented approximately 43%64% and 42%54% of Veeco's total net sales for the three and six months ended June 30, 2001,2002, respectively, and 54%44% and 55%42% for the three and six months ended June 30, 2000,2001, respectively. The Company expects that net sales to foreign customers will continue to represent a large percentage of Veeco's total net sales. Veeco's net sales denominated in foreign currencies represented approximately 12% and 14%20% of Veeco's total net sales for both the three and six months ended June 30, 2002, respectively, and 12% and 14% for the three and six months ended June 30, 2001, respectively, and 8% and 9% forrespectively. The aggregate foreign currency exchange gain included in determining consolidated results of operations was $0.2 million, net of $0.5 million of realized hedging losses in the three and six months ended June 30, 2000, respectively.2002. The aggregate foreign currency exchange loss in the first quarter of 2002 was immaterial. The aggregate foreign currency exchange loss included in determining consolidated results of operations was $272,000$0.3 million and $1,733,000,$1.7 million, net of $62,000$0.1 million and $991,000$1.0 million of realized hedging gains in the three and six months ended June 30, 2001, respectively. Veeco is exposed to financial market risks, including changes in foreign currency exchange rates. To mitigate these risks, Veeco uses derivative financial instruments. Veeco does not use derivative financial
17
instruments for speculative or trading purposes. The Company enters into monthly forward contracts to reduce the effect of fluctuating foreign currencies on short-term foreign currency-denominated intercompany balances and other known currency exposures. The average notional amount of such contracts was approximately $2.1 million and $1.6 million for the three and six months ended June 30, 2002, respectively. As of June 30, 2002, there were no open forward contracts. The change in currency exchange raterates that has the largest impact on translating Veeco's international operating profit isare the Japanese yen.Yen and the Euro. The Company estimates that based upon the June 30, 2002 balance sheet, a 10% change in foreign currency exchange rates would impactbe immaterial to reported operating profit for the six months ended June 30, 2001 by approximately $2.0 million.profit. The Company believes that this quantitative measure has inherent limitations because it does not take into account any governmental actions or changes in either customer purchasing patterns or financing and operating strategies. Veeco is
exposed
Item 4. Submission of Matters to financial market risks, including changes in foreign currency
exchange rates. To mitigate these risks, commencing in March 2001 the Company
began using derivative financial instruments. Veeco does not use derivative
financial instruments for speculative or trading purposes. The Company enters
into monthly forward contracts to reduce the effecta Vote of fluctuating foreign
currencies on short-term foreign currency-denominated intercompany transactions
and other known currency exposures. The average notional amount of such
contracts was approximately $5.2 million and $7.1 million for the three and six
months ended June 30, 2001, respectively.
18
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSSecurity Holders
The annual meeting of stockholders of the Company was held on May 11, 2001.10, 2002. The matters voted on at the meeting were: (a) the election of fourthree directors: (i) Heinz Fridrich,Joel A. Elftmann, (ii) Roger McDaniel,Paul R. Low, and (iii) Irwin Pfister and (iv) Douglas
Kingsley,Walter J. Scherr; (b) the approval of an amendment to the Veeco Instruments Inc. 2000 Stock Option Plan; (c) the approval of an amendment to the Company's Certificate of Incorporation; and (c)(d) the ratification of the Board's appointment of Ernst & Young as the independent auditors of the Company's financial statements for the year ending December 31, 2001.2002. As of the record date for the meeting, there were 24,684,68429,027,006 shares of common stock outstanding, each of which was entitled to one vote with respect to each of the matters voted on at the meeting. The results of the voting were as follows:
Matter | For | Withheld/Against | Abstained | Broker Non-Votes | ||||
---|---|---|---|---|---|---|---|---|
(a)(i) | 22,678,943 | 318,596 | 0 | 0 | ||||
(a)(ii) | 22,678,943 | 318,596 | 0 | 0 | ||||
(a)(iii) | 22,678,943 | 318,596 | 0 | 0 | ||||
(b) | 12,469,519 | 3,997,196 | 300,343 | 6,230,481 | ||||
(c) | 22,272,046 | 710,913 | 14,580 | 0 | ||||
(d) | 22,407,787 | 569,862 | 19,890 | 0 |
Item 5. OTHER INFORMATIONOther Information
On July 16, 2001,11, 2002, the Company acquired ThermoMicroscopes Corp.signed a definitive merger agreement with FEI Company ("TM"FEI"), a
manufacturer of atomic force microscopes, scanning probe microscopes, near field
optical microscopes and probes. TM, formerly a subsidiaryHillsboro, Oregon. Under the terms of Thermo Electron
Corporation, is based in Sunnyvale, California.the agreement, FEI shareholders will receive 1.355 shares of Veeco common stock for each share of FEI common stock outstanding. Based upon FEI's approximately 32.0 million shares outstanding, the FEI shareholders will receive approximately 44.0 million Veeco shares. The acquisition wasmerger, which will be accounted for usingunder the purchase method, is expected to close in the fourth quarter of accounting. Results of operations prior2002, subject to the acquisitionapproval of shareholders of both companies, certain regulatory approvals and other customary closing conditions. Upon consummation of the merger, FEI will become a wholly-owned subsidiary of Veeco, and Veeco will be renamed Veeco FEI Inc. FEI designs, manufactures, markets and services products based on focused charged particle beam technology. FEI's products include transmission electron microscopes (TEM), scanning electron microscopes (SEM), focused ion-beam systems (FIBs) and DualBeam systems that combine a FIB column and a SEM column on a single platform. FEI also designs, manufactures and sells certain components of electron microscopes and FIBs to other manufacturers.
On August 12, 2002, in connection with the proposed merger, the Company and FEI filed with the SEC a joint proxy statement/registration statement on Form S-4 containing a prospectus relating to the
18
shares of the Company's common stock to be issued to FEI's shareholders. Investors and security holders are not materialurged to read the Condensed Consolidated Statementsjoint proxy statement/registration statement because it contains important information about the proposed merger. Investors and security holders may obtain copies of Operationsthis document, as well as other SEC filings of the Company and FEI, free of charge from the SEC's website at www.sec.gov, as well as from the applicable company by directing a request to Investor Relations for the threeCompany, at (516) 677-0200, Ext. 1403 and six months ended June 30, 2001.
to Investor Relations for FEI, at (503) 640-7500, Ext. 7527.
This report does not constitute an offer of any securities for sale.
19
ITEM
Item 6. EXHIBITS AND REPORTS ON FORMExhibits and Reports on Form 8-K.
EXHIBITS:
Exhibits:
(a) Exhibits
Unless otherwise indicated, each of the following exhibits has been previously filed with the Securities and Exchange Commission by the Company under File No. 0-16244.
Number | Description | Incorporated by Reference to the Following | ||
---|---|---|---|---|
2.1 | Agreement and Plan of Merger, dated | Registration Statement on Form S-4 (File Number 333-97977) filed August 12, 2002, Exhibit 2.1 | ||
2.2 | Voting Agreement, dated as of July 11, 2002, between Veeco Instruments Inc. and the shareholders of FEI Company listed on Schedule A attached thereto. | Current Report on Form 8-K/A filed July 22, 2002, Exhibit 2.2 | ||
2.3 | Voting Agreement, dated as of July 11, 2002, between Veeco Instruments Inc. and Philips Business Electronics International B.V. | Current Report on Form 8-K filed July 12, 2002, Exhibit 2.3 | ||
2.4 | Investor Agreement, dated as of July 11, 2002, between Veeco Instruments Inc. and Philips Business Electronics International B.V. | Current Report on Form 8-K filed July 12, 2002, Exhibit 2.4 | ||
4.1 | Amendment No. 2 to the Rights Agreement, dated as of July 11, 2002, between Veeco Instruments Inc. and American Stock Transfer and Trust Company. | Current Report on Form 8-K filed July 12, 2002, Exhibit 4.1 | ||
10.1 | Amendment No. 2 to the Veeco Instruments Inc. 2000 Stock Option Plan, effective May 10, 2002. | Registration Statement on Form S-8 (File Number | ||
10.2 | Amendment To Loan Documents effective | * | ||
10.3 | Employment Agreement, dated as of July 11, | Current Report on Form 8-K filed | ||
10.4 | Employment Agreement, dated as of July 11, 2002, between Edward H. Braun and Veeco Instruments Inc. | Current Report on Form 8-K filed July 12, 2002, Exhibit 10.2 | ||
99.1 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | * | ||
20
99.2 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | * |
The Registrant filed a Current Report on Form 8-K on July 12, 2002 regarding the Agreement and Plan of Merger dated July 11, 2002 among Veeco Instruments Inc., Venice Acquisition Corp. and FEI Company and certain related matters.
The Registrant filed an amendment on Form 8-K/A on July 22, 2002 to its Current Report on Form 8-K dated July 12, 2002 to reflect certain additional parties to the Voting Agreement dated as of July 11, 2002 among Veeco and certain stockholders of FEI Company.
21
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: August 8, 2001
Veeco Instruments Inc.
By: /s/ Edward H. Braun
---------------------------------
Edward H. Braun
Chairman, Chief Executive Officer and
President
By: /s/ John F. Rein, Jr.
---------------------------------
John F. Rein, Jr.
Executive Vice President,
Chief Financial Officer and Secretary
21
Date: August 14, 2002 | ||||
VEECO INSTRUMENTS INC. | ||||
By: | /s/ EDWARD H. BRAUN Edward H. Braun Chairman, Chief Executive Officer and President | |||
By: | /s/ JOHN F. REIN, JR. John F. Rein, Jr. Executive Vice President, Chief Financial Officer, Treasurer and Secretary |
22
EXHIBIT INDEX
Unless otherwise indicated, each of the following exhibits has been previously filed with the Securities and Exchange Commission by the Company under File No. 0-16244.
Number | Description | Incorporated by Reference to the Following | ||
---|---|---|---|---|
2.1 | Agreement and Plan of Merger, dated | Registration Statement on Form S-4 (File Number 333-97977) filed August 12, 2002, Exhibit 2.1 | ||
2.2 | Voting Agreement, dated as | Current Report on Form 8-K/A filed July 22, 2002, Exhibit 2.2 | ||
2.3 | Voting Agreement, dated as of July 11, 2002, between Veeco Instruments Inc. and Philips Business Electronics International B.V. | Current Report on Form 8-K filed July 12, 2002, Exhibit 2.3 | ||
2.4 | Investor Agreement, dated as of July 11, 2002, between Veeco Instruments Inc. and Philips Business Electronics International B.V. | Current Report on Form 8-K filed July 12, 2002, Exhibit 2.4 | ||
4.1 | Amendment No. | Current Report on Form 8-K filed July 12, 2002, Exhibit 4.1 | ||
10.1 | Amendment No. 2 to the Veeco Instruments Inc. 2000 Stock Option Plan, effective May 10, 2002. | Registration Statement on Form S-8 (File Number | ||
10.2 | Amendment To Loan Documents effective | * | ||
10.3 | Employment Agreement, dated as of July 11, | Current Report on Form 8-K filed | ||
10.4 | Employment Agreement, dated as of July 11, 2002, between Edward H. Braun and Veeco Instruments Inc. | Current Report on Form 8-K filed July 12, 2002, Exhibit 10.2 | ||
99.1 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | * | ||
99.2 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | * |