Exhibit 99.2
VEECO INSTRUMENTS INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated financial statements of Veeco Instruments Inc. (the “Company” or “Veeco”) are included herein:
· Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2010;
· Unaudited Pro Forma Condensed Consolidated Statement of Operations for the six months ended June 30, 2010 and 2009;
· Unaudited Pro Forma Condensed Consolidated Statement of Operations for the years ended December 31, 2009, 2008 and 2007; and
· Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements.
The above referenced unaudited pro forma condensed consolidated financial statements are based on historical financial statements of the Company after giving effect to the divestiture of the Company’s Metrology business and related assets and liabilities (the “Divested Business”) pursuant to a Stock Purchase Agreement (the “Agreement”), by and among the Company and Bruker Corporation. At the closing of the divestiture, the Company received $229.4 million in cash consideration for the Divested Business. The final purchase price is subject to certain post-closing adjustments related to final working capital.
These unaudited pro forma condensed consolidated financial statements have been prepared by applying pro forma adjustments to the unaudited condensed consolidated financial statements included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010 (the “Second Quarter 2010 Form 10-Q”) and the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the three year period ended December 31, 2009 (the “2009 Form 10-K”). The unaudited pro forma condensed consolidated balance sheet has been adjusted to give effect to the divestiture as if the divestiture had been consummated as of June 30, 2010. The unaudited pro forma condensed consolidated statements of operations have been adjusted to give effect to the divestiture as if the divestiture had been consummated as of the following dates:
· January 1, 2010 for the six months ended June 30, 2010
· January 1, 2009 for the year ended December 31, 2009
· January 1, 2009 for the six months ended June 30, 2009
· January 1, 2008 for the year ended December 31, 2008
· January 1, 2007 for the year ended December 31, 2007
In creating the unaudited pro forma condensed consolidated financial statements, the primary adjustments to the historical financial statements were (i) the removal of the assets sold and liabilities assumed in the divestiture, (ii) the receipt of proceeds received in connection with the divestiture, (iii) the removal of the results of operations attributable to the Divested Business that were sold and (iv) the recognition of fees and other costs related to the divestiture.
The pro forma adjustments, as described in the notes to these unaudited pro forma condensed consolidated financial statements, are based on information currently available to management, and the
Company believes that these pro forma adjustments are reasonable, factually supportable and directly attributable to the divestiture. The unaudited pro forma condensed consolidated financial statements are presented for informational purposes only and are not intended to represent and may not be indicative of operating results or financial position that would have occurred had the divestiture been completed as of June 30, 2010 (in the case of the unaudited pro forma condensed consolidated balance sheet) or as of January 1, 2010, 2009, 2008 and 2007, respectively in the case of the unaudited pro forma condensed consolidated statements of operations, nor are they intended to represent and they may not be indicative of future operating results or financial position of the Company. These unaudited pro forma condensed consolidated financial statements and the accompanying notes should be read together with the Company’s audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2009, and Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) included in the 2009 Form 10-K, as well as in conjunction with the Company’s unaudited condensed consolidated financial statements and accompanying notes as of and for the quarterly periods ended March 31, 2010 and June 30, 2010, and the MD&A included in the Company’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2010 and June 30, 2010.
VEECO INSTRUMENTS INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of June 30, 2010
(In thousands)
| | Veeco | | | | Veeco | |
| | Historical (a) | | Adjustments | | Pro Forma | |
Assets | | | | | | | |
Current assets: | | | | | | | |
Cash and cash equivalents | | $ | 361,382 | | $ | 200,262 | (b) | $ | 561,644 | |
Restricted cash | | | — | | | 22,943 | (b) | | 22,943 | |
Short-term investments | | 53,500 | | — | | 53,500 | |
Accounts receivable, net | | 140,722 | | (23,646 | )(c) | 117,076 | |
Inventories | | 84,210 | | (22,225 | )(c) | 61,985 | |
Prepaid expenses and other current assets | | 18,927 | | (1,254 | )(c) | 17,673 | |
Deferred income taxes | | 2,963 | | — | | 2,963 | |
Total current assets | | 661,704 | | 176,080 | | 837,784 | |
Property, plant and equipment at cost, net | | 59,118 | | (13,370 | )(c) | 45,748 | |
Goodwill | | 59,422 | | (7,419 | )(c) | 52,003 | |
Intangible assets, net | | 25,211 | | (5,916 | )(c) | 19,295 | |
Other assets | | 911 | | — | | 911 | |
Total assets | | $ | 806,366 | | $ | 149,375 | | $ | 955,741 | |
Liabilities and equity | | | | | | | |
Current liabilities: | | | | | | | |
Accounts payable | | $ | 50,973 | | $ | (5,795 | )(d) | $ | 45,178 | |
Accrued expenses and other current liabilities | | 158,383 | | (8,183 | )(d) | 150,200 | |
Deferred profit | | 7,863 | | — | | 7,863 | |
Income taxes payable | | 14,149 | | 57,160 | (e) | 71,309 | |
Current portion of long-term debt | | 220 | | — | | 220 | |
Total current liabilities | | 231,588 | | 43,182 | | 274,770 | |
Long-term debt | | 102,352 | | — | | 102,352 | |
Other liabilities | | 411 | | — | | 411 | |
| | | | | | | |
Equity | | 472,015 | | 106,193 | (f) | 578,208 | |
| | | | | | | |
Total liabilities and equity | | $ | 806,366 | | $ | 149,375 | | $ | 955,741 | |
See the notes to these unaudited pro forma condensed consolidated financial statements.
VEECO INSTRUMENTS INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2010
(In thousands, except per share data)
| | Veeco | | | | Veeco | |
| | Historical (g) | | Adjustments | | Pro Forma | |
Net sales | | $ | 416,271 | | $ | (60,131 | )(h) | $ | 356,140 | |
Cost of sales | | 232,164 | | (31,565 | )(h) | 200,599 | |
Gross profit | | 184,107 | | (28,566 | ) | 155,541 | |
Operating expenses: | | | | | | | |
Selling, general, and administrative expense | | 50,707 | | (12,422 | )(i) | 38,285 | |
Research and development expense | | 36,990 | | (7,434 | )(h) | 29,556 | |
Amortization expense | | 3,319 | | (844 | )(h) | 2,475 | |
Restructuring expense | | (179 | ) | — | | (179 | ) |
Other expense, net | | 359 | | (9 | )(h) | 350 | |
Total operating expenses | | 91,196 | | (20,709 | ) | 70,487 | |
Operating income | | 92,911 | | (7,857 | ) | 85,054 | |
Interest expense | | 3,863 | | — | | 3,863 | |
Interest income | | (319 | ) | — | | (319 | ) |
Income from continuing operations before income taxes | | 89,367 | | (7,857 | ) | 81,510 | |
Income tax provision | | 10,930 | | (2,175 | )(j) | 8,755 | |
Income from continuing operations attributable to Veeco | | $ | 78,437 | | $ | (5,682 | ) | $ | 72,755 | |
| | | | | | | |
Income per common share from continuing operations attributable to Veeco: | | | | | | | |
Basic | | $ | 2.00 | | | | $ | 1.85 | |
Diluted | | $ | 1.88 | | | | $ | 1.75 | |
| | | | | | | |
Weighted average shares outstanding: | | | | | | | |
Basic | | 39,283 | | | | 39,283 | |
Diluted | | 41,683 | | | | 41,683 | |
See the notes to these unaudited pro forma condensed consolidated financial statements.
VEECO INSTRUMENTS INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2009
(In thousands, except per share data)
| | Veeco | | | | Veeco | |
| | Historical (k) | | Adjustments | | Pro Forma | |
Net sales | | $ | 380,149 | | $ | (97,737 | )(l) | $ | 282,412 | |
Cost of sales | | 228,587 | | (57,410 | )(l) | 171,177 | |
Gross profit | | 151,562 | | (40,327 | ) | 111,235 | |
Operating expenses: | | | | | | | |
Selling, general, and administrative expense | | 85,455 | | (23,304 | )(l) | 62,151 | |
Research and development expense | | 57,430 | | (13,947 | )(l) | 43,483 | |
Amortization expense | | 7,338 | | (2,170 | )(l) | 5,168 | |
Restructuring expense | | 7,680 | | (2,843 | )(l) | 4,837 | |
Asset impairment charge | | 304 | | — | | 304 | |
Other expense, net | | 790 | | (766 | )(l) | 24 | |
Total operating expenses | | 158,997 | | (43,030 | ) | 115,967 | |
Operating loss | | (7,435 | ) | 2,703 | | (4,732 | ) |
Interest expense | | 7,732 | | — | | 7,732 | |
Interest income | | (882 | ) | — | | (882 | ) |
Loss from continuing operations before income taxes and noncontrolling interest | | (14,285 | ) | 2,703 | | (11,582 | ) |
Income tax provision | | 1,347 | | 1,300 | (m) | 2,647 | |
Loss from continuing operations before noncontrolling interest | | (15,632 | ) | 1,403 | | (14,229 | ) |
Loss attributable to noncontrolling interest | | (65 | ) | — | | (65 | ) |
Loss from continuing operations attributable to Veeco | | $ | (15,567 | ) | $ | 1,403 | | $ | (14,164 | ) |
| | | | | | | |
Loss per common share from continuing operations attributable to Veeco: | | | | | | | |
Basic and Diluted | | $ | (0.48 | ) | | | $ | (0.43 | ) |
| | | | | | | |
Weighted average shares outstanding: | | | | | | | |
Basic and Diluted | | 32,628 | | | | 32,628 | |
See the notes to these unaudited pro forma condensed consolidated financial statements.
VEECO INSTRUMENTS INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009
(In thousands, except per share data)
| | Veeco | | | | Veeco | |
| | Historical (n) | | Adjustments | | Pro Forma | |
Net sales | | $ | 134,869 | | $ | (46,287 | )(o) | $ | 88,582 | |
Cost of sales | | 90,103 | | (28,678 | )(o) | 61,425 | |
Gross profit | | 44,766 | | (17,609 | ) | 27,157 | |
Operating expenses: | | | | | | | |
Selling, general, and administrative expense | | 38,429 | | (12,134 | )(o) | 26,295 | |
Research and development expense | | 26,049 | | (7,384 | )(o) | 18,665 | |
Amortization expense | | 3,660 | | (1,155 | )(o) | 2,505 | |
Restructuring expense | | 6,375 | | (2,386 | )(o) | 3,989 | |
Asset impairment charge | | 304 | | — | | 304 | |
Other expense, net | | 1,409 | | (734 | )(o) | 675 | |
Total operating expenses | | 76,226 | | (23,793 | ) | 52,433 | |
Operating loss | | (31,460 | ) | 6,184 | | (25,276 | ) |
Interest expense | | 3,880 | | — | | 3,880 | |
Interest income | | (473 | ) | — | | (473 | ) |
Loss from continuing operations before income taxes and noncontrolling interest | | (34,867 | ) | 6,184 | | (28,683 | ) |
Income tax provision | | 780 | | 776 | (p) | 1,556 | |
Loss from continuing operations before noncontrolling interest | | (35,647 | ) | 5,408 | | (30,239 | ) |
Loss attributable to noncontrolling interest | | (65 | ) | — | | (65 | ) |
Loss from continuing operations attributable to Veeco | | $ | (35,582 | ) | $ | 5,408 | | $ | (30,174 | ) |
| | | | | | | |
Loss per common share from continuing operations attributable to Veeco: | | | | | | | |
Basic and Diluted | | $ | (1.13 | ) | | | $ | (0.96 | ) |
| | | | | | | |
Weighted average shares outstanding: | | | | | | | |
Basic and Diluted | | 31,506 | | | | 31,506 | |
See the notes to these unaudited pro forma condensed consolidated financial statements.
VEECO INSTRUMENTS INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2008
(In thousands, except per share data)
| | Veeco | | | | Veeco | |
| | Historical (q) | | Adjustments | | Pro Forma | |
Net sales | | $ | 442,809 | | $ | (127,874 | )(r) | $ | 314,935 | |
Cost of sales | | 266,215 | | (74,551 | )(r) | 191,664 | |
Gross profit | | 176,594 | | (53,323 | ) | 123,271 | |
Operating expenses: | | | | | | | |
Selling, general, and administrative expense | | 92,838 | | (32,296 | )(r) | 60,542 | |
Research and development expense | | 60,353 | | (20,745 | )(r) | 39,608 | |
Amortization expense | | 10,745 | | (1,881 | )(r) | 8,864 | |
Restructuring expense | | 10,562 | | (1,138 | )(r) | 9,424 | |
Asset impairment charge | | 73,322 | | (21,935 | )(r) | 51,387 | |
Other income, net | | (668 | ) | 254 | (r) | (414 | ) |
Total operating expenses | | 247,152 | | (77,741 | ) | 169,411 | |
Operating loss | | (70,558 | ) | 24,418 | | (46,140 | ) |
Interest expense | | 9,317 | | — | | 9,317 | |
Interest income | | (2,588 | ) | — | | (2,588 | ) |
Gain on extinguishment of debt | | (3,758 | ) | — | | (3,758 | ) |
Loss from continuing operations before income taxes and noncontrolling interest | | (73,529 | ) | 24,418 | | (49,111 | ) |
| | | | | | | |
Income tax provision | | 1,892 | | (170 | )(s) | 1,722 | |
Loss from continuing operations before noncontrolling interest | | (75,421 | ) | 24,588 | | (50,833 | ) |
Loss attributable to noncontrolling interest | | (230 | ) | — | | (230 | ) |
Loss from continuing operations attributable to Veeco | | $ | (75,191 | ) | $ | 24,588 | | $ | (50,603 | ) |
| | | | | | | |
Loss per common share from continuing operations attributable to Veeco: | | | | | | | |
Basic and Diluted | | $ | (2.40 | ) | | | $ | (1.61 | ) |
| | | | | | | |
Weighted average shares outstanding: | | | | | | | |
Basic and Diluted | | 31,347 | | | | 31,347 | |
See the notes to these unaudited pro forma condensed consolidated financial statements.
VEECO INSTRUMENTS INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2007
(In thousands, except per share data)
| | Veeco | | | | Veeco | |
| | Historical (t) | | Adjustments | | Pro Forma | |
Net sales | | $ | 402,475 | | $ | (150,444 | )(u) | $ | 252,031 | |
Cost of sales | | 244,964 | | (83,113 | )(u) | 161,851 | |
Gross profit | | 157,511 | | (67,331 | ) | 90,180 | |
Operating expenses: | | | | | | | |
Selling, general, and administrative expense | | 90,972 | | (34,766 | )(u) | 56,206 | |
Research and development expense | | 61,174 | | (22,838 | )(u) | 38,336 | |
Amortization expense | | 10,250 | | (1,486 | )(u) | 8,764 | |
Restructuring expense | | 6,726 | | (1,952 | )(u) | 4,774 | |
Asset impairment charge | | 1,068 | | — | | 1,068 | |
Other income, net | | (618 | ) | (105 | )(u) | (723 | ) |
Total operating expenses | | 169,572 | | (61,147 | ) | 108,425 | |
Operating loss | | (12,061 | ) | (6,184 | ) | (18,245 | ) |
Interest expense | | 8,827 | | — | | 8,827 | |
Interest income | | (3,963 | ) | — | | (3,963 | ) |
Gain on extinguishment of debt | | (738 | ) | — | | (738 | ) |
Loss from continuing operations before income taxes and noncontrolling interest | | (16,187 | ) | (6,184 | ) | (22,371 | ) |
Income tax provision | | 3,651 | | (2,367 | )(v) | 1,284 | |
Loss from continuing operations before noncontrolling interest | | (19,838 | ) | (3,817 | ) | (23,655 | ) |
Loss attributable to noncontrolling interest | | (628 | ) | — | | (628 | ) |
Loss from continuing operations attributable to Veeco | | $ | (19,210 | ) | $ | (3,817 | ) | $ | (23,027 | ) |
| | | | | | | |
Loss per common share from continuing operations attributable to Veeco: | | | | | | | |
Basic and Diluted | | $ | (0.62 | ) | | | $ | (0.74 | ) |
| | | | | | | |
Weighted average shares outstanding: | | | | | | | |
Basic and Diluted | | 31,020 | | | | 31,020 | |
See the notes to these unaudited pro forma condensed consolidated financial statements.
VEECO INSTRUMENTS INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(a) Veeco Historical—represents Veeco’s historical unaudited condensed consolidated balance sheet as of June 30, 2010 derived from the Company’s unaudited condensed consolidated financial statements included in the Second Quarter 2010 Form 10-Q.
(b) Cash and Cash Equivalents—represents the net cash proceeds from the divestiture.
| | June 30, 2010 | |
| | (in thousands) | |
Cash consideration before adjustments | | $ | 229,430 | |
Transaction costs (1) | | (6,154 | ) |
Divested cash balance | | (71 | ) |
Reclass to restricted cash for escrow requirements | | (22,943 | ) |
Net proceeds | | $ | 223,205 | |
(1) Represents investment banker, legal and accounting fees incurred related to the transaction.
(c) Divested Assets—represents the elimination of historical amounts of the divested assets to reflect the pro forma effect of the sale of these assets to Bruker Corporation.
(d) Assumed Liabilities—represents the elimination of historical amounts of the assumed liabilities to reflect the pro forma effect of the assumption of these liabilities by Bruker Corporation.
(e) Income Taxes Payable—represents the pro forma tax effect of the net gain on the sale of assets based on the statutory rate of 35%.
(f) Equity—represents Veeco’s net gain on the sale of the Divested Business.
(g) Veeco Historical—represents Veeco’s historical unaudited condensed consolidated statement of operations for the six months ended June 30, 2010 derived from the Company’s unaudited condensed consolidated financial statements included in the Second Quarter 2010 Form 10-Q.
(h) Divested Operations— represents the elimination of historical operations of the Divested Business that were not classified as discontinued operations in Veeco’s historical unaudited consolidated statements of operations in Veeco’s audited consolidated statements of operations for the six months ended June 30, 2010 included in the Second Quarter 2010 Form 10-Q.
(i) Selling, General and Administrative Expense—represents S,G&A expense allocated to the Divested Business and certain transaction costs, as follows:
| | Six Months Ended | |
| | June 30, 2010 | |
| | (in thousands) | |
Historical S,G&A Expense | | $ | 50,707 | |
S,G&A expense allocated to the divested business | | (12,015 | ) |
Transaction costs | | (407 | ) |
Pro forma adjustment | | (12,422 | ) |
Pro forma S,G&A Expense | | $ | 38,285 | |
(j) Income Tax Provision —represents the pro forma tax effect of using the ‘incremental approach’ where the tax provision for pro forma earnings is calculated without regard to other items.
(k) Veeco Historical—represents Veeco’s historical audited consolidated statement of operations for the year ended December 31, 2009 derived from the Company’s audited consolidated financial statements included in the 2009 Form 10-K.
(l) Divested Operations— represents the elimination of historical operations of the Divested Business that were not classified as discontinued operations in Veeco’s historical unaudited consolidated statements of operations in Veeco’s audited consolidated statements of operations for the year ended December 31, 2009 included in the 2009 Form 10-K.
(m) Income Tax Provision— represents the pro forma tax effect of using the ‘incremental approach’ where the tax provision for pro forma earnings is calculated without regard to other items.
(n) Veeco Historical—represents Veeco’s historical unaudited condensed consolidated statement of operations for the six months ended June 30, 2009 derived from the Company’s unaudited condensed consolidated financial statements included in the Second Quarter 2010 Form 10-Q.
(o) Divested Operations— represents the elimination of historical operations of the Divested Business that were not classified as discontinued operations in Veeco’s historical unaudited consolidated statements of operations in Veeco’s audited consolidated statements of operations for the six months ended June 30, 2009 included in the Second Quarter 2010 Form 10-Q.
(p) Income Tax Provision— represents the pro forma tax effect of using the ‘incremental approach’ where the tax provision for pro forma earnings is calculated without regard to other items.
(q) Veeco Historical—represents Veeco’s historical audited consolidated statement of operations for the year ended December 31, 2008 derived from the Company’s audited consolidated financial statements included in the 2009 Form 10-K.
(r) Divested Operations— represents the elimination of historical operations of the Divested Business that were not classified as discontinued operations in Veeco’s historical unaudited consolidated statements of operations in Veeco’s audited consolidated statements of operations for the year ended December 31, 2008 included in the 2009 Form 10-K.
(s) Income Tax Provision— represents the pro forma tax effect of using the ‘incremental approach’ where the tax provision for pro forma earnings is calculated without regard to other items.
(t) Veeco Historical—represents Veeco’s historical audited consolidated statement of operations for the year ended December 31, 2007 derived from the Company’s audited consolidated financial statements included in the 2009 Form 10-K.
(u) Divested Operations— represents the elimination of historical operations of the Divested Business that were not classified as discontinued operations in Veeco’s historical unaudited consolidated statements of operations in Veeco’s audited consolidated statements of operations for the year ended December 31, 2007 included in the 2009 Form 10-K.
(v) Income Tax Provision— represents the pro forma tax effect of using the ‘incremental approach’ where the tax provision for pro forma earnings is calculated without regard to other items.
