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Exhibit 99.1
 | | NEWS |
Veeco Instruments Inc., 100 Sunnyside Blvd., Woodbury, NY 11797 Tel. 516-677-0200 FAX 516-677-0380
FOR IMMEDIATE RELEASE
Financial Contact: Debra Wasser, VP of IR & Corp. Comm., 516-677-0200, x1472
Trade Contact: Fran Brennen, Dir. of Marketing Communications, 516-677-0200 x1222
VEECO REPORTS THIRD QUARTER AND NINE MONTH 2003 RESULTS
Woodbury, NY, October 27, 2003—Veeco Instruments Inc. (Nasdaq: VECO) today announced its financial results for the third quarter and nine months ended September 30, 2003. Veeco reports its results on a GAAP basis, and also provides results excluding certain charges. Investors should refer to the attached table for further details of the reconciliation of GAAP (loss) to earnings excluding certain charges.
Highlights
Veeco's third quarter 2003 sales were $63.1 million with a net loss of $2.1 million, or a loss of $0.07 per share. Earnings excluding certain charges were $0.03 per diluted share. The Company's third quarter bookings were $64.0 million. The Company's third quarter guidance (provided on July 29, 2003) was: revenues $67-$70 million, net loss between $0.06 and $0.03 per share, earnings excluding certain charges between $0.03 and $0.06 per diluted share, and bookings between $67-70 million.
Edward H. Braun, Veeco's Chairman and Chief Executive Officer, commented, "Despite a continued difficult capital equipment market, Veeco achieved our earnings per share guidance on reduced quarterly revenue, on the strength of improved gross margins and reduced operating expenses. Veeco's third quarter gross margins and earnings improved sequentially and year-over-year and we reported positive cash generation of nearly $5 million."
"While Veeco's third quarter 2003 bookings of $64.0 million were flat sequentially (below our prior forecast), our bookings increased in semiconductor (+ 30%) and data storage
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(+10%), but were offset by declines in telecommunications/wireless (-29%) and scientific research (-4%). In the third quarter our customers reported increased factory utilization rates, resulting in multiple Veeco tool orders from key semiconductor and data storage customers. We expect order strength in semiconductor and data storage to continue in the fourth quarter, followed by an industry expected broader recovery in 2004."
Third Quarter 2003 Results
Veeco's sales for the third quarter of 2003 were $63.1 million, a 13% decrease from the $72.8 million reported for the third quarter of 2002 and a 14% sequential decrease from the $73.4 million reported in the second quarter of 2003. Metrology sales were $38.3 million in the third quarter of 2003, compared to $42.2 million reported in the third quarter of 2002. Veeco's Process Equipment sales were $24.9 million in the third quarter of 2003, compared with $30.5 million in the third quarter of 2002. Weakness in our third quarter Process Equipment revenues resulted from certain deliveries being delayed to the fourth quarter. Veeco's sales by market in the third quarter of 2003 were 31% data storage, 14% semiconductor, 12% telecommunications/wireless and 43% scientific research.
Veeco's bookings for the third quarter of 2003 were $64.0 million, down 8% from the $69.4 million reported in the third quarter of 2002, and sequentially flat compared with the $64.0 million reported in the second quarter of 2003. Third quarter 2003 Metrology bookings were $36.8 million, compared to $39.2 million reported in the third quarter of 2002. Third quarter 2003 Process Equipment bookings were $27.2 million, compared to the $30.2 million reported in the third quarter of 2002. Veeco's bookings by market in the third quarter were 33% data storage, 15% semiconductor, 11% telecommunications/wireless and 41% scientific research. The Company's third quarter book-to-bill ratio was 1.01.
Veeco incurred an operating loss of $1.8 million in the third quarter of 2003, compared to an operating loss of $2.1 million in the third quarter of 2002. Excluding $1.8 million in third quarter restructuring charges, primarily severance and other related costs, Veeco's third quarter 2003 "EBITA" (earnings excluding certain charges before interest, income taxes and amortization) was $3.3 million compared to $1.2 million in the third quarter of 2002, which
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also excludes restructuring charges. Veeco's third quarter 2003 net loss was $2.1 million (($0.07) per share) compared to a net loss of $2.1 million (($0.07) per share) in the third quarter of 2002. Excluding certain charges, third quarter 2003 earnings were $0.03 per diluted share compared to $0.00 per diluted share in the third quarter of 2002.
Nine Month 2003 Results
Veeco's sales for the first nine months of 2003 were $202.4 million, a 12% decrease from the $230.2 million reported for the first nine months of 2002. Metrology sales were $113.6 million in the first nine months of 2003, compared to $117.9 million reported in the first nine months of 2002. Veeco's Process Equipment sales were $88.8 million in the first nine months of 2003, compared with $112.3 million in the first nine months of 2002. Veeco's sales by market in the first nine months of 2003 were 31% data storage, 15% semiconductor, 13% telecommunications/wireless and 41% scientific research.
Veeco's bookings for the first nine months of 2003 were $200.8 million, down 8% from the $217.9 million reported in the first nine months of 2002. Metrology bookings for the first nine months of 2003 were $107.8 million compared to the $112.1 million reported in the first nine months of 2002. Process Equipment bookings in the first nine months of 2003 were $93.0 million, compared to $105.7 million reported in the first nine months of 2002. Veeco's bookings by market in the first nine months of 2003 were 35% data storage, 14% semiconductor, 14% telecommunications/wireless and 37% scientific research. The Company's book-to-bill ratio for the first nine months of 2003 was 0.99.
Veeco incurred an operating loss of $3.3 million in the first nine months of 2003, compared to an operating loss of $7.3 million in the first nine months of 2002. Excluding $3.3 million in restructuring charges, primarily severance and other related costs, Veeco's first nine month 2003 EBITA was $9.5 million compared to $4.8 million in the first nine months of 2002, which also excludes restructuring charges. Veeco's net loss for the first nine
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months of 2003 was $4.9 million (($0.17) per share) compared to a net loss of $7.2 million (($0.25) per share) in the first nine months of 2002. Excluding certain charges, earnings for the first nine months of 2003 were $0.08 per diluted share compared to $0.01 per diluted share in the first nine months of 2002.
Veeco's Outlook
Mr. Braun commented, "Our customers' continued emphasis on producing next generation semiconductor devices (130nm and 90nm) and data storage (80GB and 120GB) thin film magnetic heads has resulted in increased factory utilization rates, to a point where added capacity would normally be required. In fact, industry capex to revenue ratio is at a historic low. While customers continue to demand higher capital equipment efficiencies and are tightly managing their cash flows, the industry outlook suggests increased capital spending in the coming quarters."
Mr. Braun continued, "We currently expect a modest improvement in Veeco's fourth quarter orders driven by demand from semiconductor and data storage customers and a seasonal improvement in scientific research orders. We continue to look for an industry expected broader recovery in Veeco's served markets in 2004."
Veeco currently forecasts that fourth quarter 2003 bookings will be in the range of $64-$70 million and that fourth quarter 2003 sales will be in the range of $64-$70 million. The company currently forecasts that it will incur a net loss between ($0.08 and $0.04) per share on a GAAP basis and will earn between $0.01 and $0.05 per share, excluding amortization of $3.3 million and restructuring charges of approximately $750,000, using a 35% tax rate.
Investor Conference Call/ Webcast
Veeco will host an investor conference call this morning, October 27, at 10 am EST to review these third quarter results. You may listen to the call live at 1-800-818-5264 or through an audio webcast at http://www.veeco.com (Investor Information). This call will be archived for
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future reference. A telephonic playback of the conference call will also be available starting this afternoon through November 3, 2003 at 888-203-1112 (code 391921) or on the Veeco Web site.
About Veeco
Veeco Instruments Inc. provides solutions for nanoscale applications in the worldwide semiconductor, data storage, telecommunications/wireless and scientific research markets. Our Metrology products are used to measure at the nanoscale and our Process Equipment tools help create nanoscale devices. Veeco's manufacturing and engineering facilities are located in New York, California, Colorado, Arizona and Minnesota. Global sales and service offices are located throughout the United States, Europe, Japan and Asia Pacific. Additional information on Veeco can be found at http://www.veeco.com/.
To the extent that this news release discusses expectations about market conditions or about market acceptance and future sales of Veeco's products, or otherwise makes statements about the future, such statements are forward-looking and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These factors include the challenges of continuing weakness in end market conditions and the cyclical nature of the telecommunications/wireless, data storage, semiconductor and research markets, risks associated with the acceptance of new products by individual customers and by the marketplace and other factors discussed in the Business Description and Management's Discussion and Analysis sections of Veeco's Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q and current reports on Form 8-K.
-Financial Tables Attached-
Veeco Instruments Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
| | Three months ended
September 30,
(Unaudited)
| |
|---|
| | 2003
| | 2002
| |
|---|
| Net sales | | $ | 63,144 | | $ | 72,753 | |
| Cost of sales | | | 32,845 | | | 38,405 | |
| | |
| |
| |
| Gross profit | | | 30,299 | | | 34,348 | |
Costs and expenses: |
|
|
|
|
|
|
|
| Selling, general and administrative expense | | | 15,874 | | | 19,033 | |
| Research and development expense | | | 10,970 | | | 13,915 | |
| Amortization expense | | | 3,262 | | | 3,197 | |
| Other expense, net | | | 146 | | | 180 | |
| Restructuring expense | | | 1,804 | | | 83 | |
| | |
| |
| |
Operating loss |
|
|
(1,757 |
) |
|
(2,060 |
) |
Interest expense, net |
|
|
2,050 |
|
|
1,388 |
|
| | |
| |
| |
Loss before income taxes |
|
|
(3,807 |
) |
|
(3,448 |
) |
Income tax benefit |
|
|
(1,692 |
) |
|
(1,366 |
) |
| | |
| |
| |
| Net loss | | $ | (2,115 | ) | $ | (2,082 | ) |
| | |
| |
| |
Net loss per common share |
|
$ |
(0.07 |
) |
$ |
(0.07 |
) |
| Diluted net loss per common share | | $ | (0.07 | ) | $ | (0.07 | ) |
Weighted average shares outstanding |
|
|
29,262 |
|
|
29,137 |
|
| Diluted weighted average shares outstanding | | | 29,262 | | | 29,137 | |
6
Veeco Instruments Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
| | Nine Months Ended
September 30,
(Unaudited)
| |
|---|
| | 2003
| | 2002
| |
|---|
| Net sales | | $ | 202,372 | | $ | 230,241 | |
| Cost of sales | | | 108,073 | | | 126,956 | |
| | |
| |
| |
| Gross profit | | | 94,299 | | | 103,285 | |
Costs and expenses: |
|
|
|
|
|
|
|
| Selling, general and administrative expense | | | 52,027 | | | 57,405 | |
| Research and development expense | | | 33,497 | | | 41,172 | |
| Amortization expense | | | 9,563 | | | 10,116 | |
| Other income, net | | | (749 | ) | | (56 | ) |
| Restructuring expense | | | 3,261 | | | 1,970 | |
| | |
| |
| |
| Operating loss | | | (3,300 | ) | | (7,322 | ) |
Interest expense, net |
|
|
5,703 |
|
|
4,351 |
|
| | |
| |
| |
| Loss from continuing operations before income taxes | | | (9,003 | ) | | (11,673 | ) |
Income tax benefit |
|
|
(4,056 |
) |
|
(4,820 |
) |
| | |
| |
| |
| Loss from continuing operations | | | (4,947 | ) | | (6,853 | ) |
Loss from discontinued operations, net of income taxes |
|
|
— |
|
|
(346 |
) |
| | |
| |
| |
| Net loss | | $ | (4,947 | ) | $ | (7,199 | ) |
| | |
| |
| |
| Loss per common share from continuing operations | | $ | (0.17 | ) | $ | (0.24 | ) |
| Loss from discontinued operations | | | — | | | (0.01 | ) |
| | |
| |
| |
| Net loss per common share | | $ | (0.17 | ) | $ | (0.25 | ) |
| | |
| |
| |
| Diluted loss per common share from continuing operations | | $ | (0.17 | ) | $ | (0.24 | ) |
| Loss from discontinued operations | | | — | | | (0.01 | ) |
| | |
| |
| |
| Diluted net loss per common share | | $ | (0.17 | ) | $ | (0.25 | ) |
| | |
| |
| |
| Weighted average shares outstanding | | | 29,245 | | | 29,081 | |
| Diluted weighted average shares outstanding | | | 29,245 | | | 29,081 | |
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Veeco Instruments Inc.
Reconciliation of GAAP loss to earnings excluding certain charges
(In thousands, except per share data)
(Unaudited)
| | Three Months Ended
September 30,
| | Nine Months Ended
September 30,
| |
|---|
| | 2003
| | 2002
| | 2003
| | 2002
| |
|---|
| Operating loss | | $ | (1,757 | ) | $ | (2,060 | ) | $ | (3,300 | ) | $ | (7,322 | ) |
| Adjustments: | | | | | | | | | | | | | |
| Amortization expense | | | 3,262 | | | 3,197 | | | 9,563 | | | 10,116 | |
| Restructuring expense | | | 1,804 | | | 83 | | | 3,261 | | | 1,970 | |
| | |
| |
| |
| |
| |
| Earnings excluding certain charges before interest, income taxes and amortization ("EBITA") | | | 3,309 | | | 1,220 | | | 9,524 | | | 4,764 | |
| Interest expense, net | | | 2,050 | | | 1,388 | | | 5,703 | | | 4,351 | |
| | |
| |
| |
| |
| |
| Earnings excluding certain charges before income taxes | | | 1,259 | | | (168 | ) | | 3,821 | | | 413 | |
| Income tax provision at 35% | | | 441 | | | (59 | ) | | 1,337 | | | 145 | |
| Earnings excluding certain charges | | $ | 818 | | $ | (109 | ) | $ | 2,484 | | $ | 268 | |
| | |
| |
| |
| |
| |
| Earnings excluding certain charges per diluted share | | $ | 0.03 | | $ | (0.00 | ) | $ | 0.08 | | $ | 0.01 | |
| Diluted weighted average shares outstanding | | | 29,591 | | | 29,137 | | | 29,487 | | | 29,371 | |
NOTE—The above reconciliation is intended to present Veeco's operating results, excluding certain charges and related provision for income taxes. This reconciliation is not in accordance with, or an alternative method for, generally accepted accounting principles, and may be different from similar measures presented by other companies. Management of the Company evaluates performance of its business units based on EBITA, which is the primary indicator used by management to plan and forecast future periods. The presentation of this financial measure facilitates meaningful comparison with prior periods, as management of the Company believes EBITA reports baseline performance and thus provides useful information.
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Veeco Instruments Inc.
Condensed Consolidated Balance Sheets
(In thousands)
| | September 30,
2003
| | December 31,
2002
|
|---|
| | (Unaudited)
| |
|
|---|
| ASSETS | | | | | | |
| Current assets: | | | | | | |
| | Cash and cash equivalents | | $ | 215,159 | | $ | 214,295 |
| | Accounts receivable, net | | | 62,912 | | | 68,777 |
| | Inventories | | | 86,074 | | | 86,250 |
| | Prepaid expenses and other current assets | | | 14,324 | | | 18,392 |
| | Deferred income taxes | | | 27,963 | | | 31,549 |
| | |
| |
|
| Total current assets | | | 406,432 | | | 419,263 |
Property, plant and equipment, net |
|
|
55,554 |
|
|
55,872 |
| Goodwill | | | 33,782 | | | 30,658 |
| Long-term investments | | | 13,318 | | | 17,483 |
| Deferred income taxes | | | 39,497 | | | 28,888 |
| Other assets, net | | | 47,829 | | | 54,654 |
| | |
| |
|
| Total assets | | $ | 596,412 | | $ | 606,818 |
| | |
| |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
| Current liabilities: | | | | | | |
| | Accounts payable | | $ | 14,172 | | $ | 13,078 |
| | Accrued expenses | | | 37,844 | | | 44,993 |
| | Deferred profit | | | 2,363 | | | 5,966 |
| | Current portion of long-term debt | | | 328 | | | 312 |
| | Income taxes payable | | | 4,821 | | | 3,808 |
| | |
| |
|
| Total current liabilities | | | 59,528 | | | 68,157 |
Long-term debt |
|
|
230,020 |
|
|
230,273 |
| Other non-current liabilities | | | 1,104 | | | 815 |
| | |
| |
|
| Total non-current liabilities | | | 231,124 | | | 231,088 |
Shareholders' equity |
|
|
305,760 |
|
|
307,573 |
| | |
| |
|
| Total liabilities and shareholders' equity | | $ | 596,412 | | $ | 606,818 |
| | |
| |
|
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VEECO REPORTS THIRD QUARTER AND NINE MONTH 2003 RESULTSVeeco Instruments Inc. Consolidated Statements of Operations (In thousands, except per share data)Veeco Instruments Inc. Consolidated Statements of Operations (In thousands, except per share data)Veeco Instruments Inc. Reconciliation of GAAP loss to earnings excluding certain charges (In thousands, except per share data) (Unaudited)Veeco Instruments Inc. Condensed Consolidated Balance Sheets (In thousands)
