Veeco Instruments (VECO) 8-K Veeco Reports Third Quarter 2013 Financial Results

EXHIBIT 99.1

  NEWS

Veeco Instruments Inc., 1 Terminal Drive, Plainview, NY 11803 Tel. 516-677-0200 Fax. 516-677-0380

FOR IMMEDIATE RELEASE

Financial Contact: Debra Wasser, SVP Investor Relations & Corporate Communications, 516-677-0200 x1472

Media Contact:  Jeffrey Pina, Senior Director Marcom, 516-677-0200 x1222

VEECO REPORTS THIRD QUARTER 2013 FINANCIAL RESULTS

AND ANNOUNCES CONFERENCE CALL

Plainview, NY, November 8, 2013 — Veeco Instruments Inc. (Nasdaq: VECO) announced its financial results for the third quarter ended September 30, 2013.  Veeco reports its results on a U.S. generally accepted accounting principles (“GAAP”) basis, and also provides results excluding certain items.  Please refer to the attached table for details of the reconciliation between GAAP operating results and Non-GAAP operating results.  All results presented herein are for Veeco’s “Continuing Operations.”

GAAP Results ($M except per share data)

	Q3 ‘13			Q3 ‘12
Revenues	$	99.3		$	132.7
Net (loss) income	$	(6.0	)	$	7.7
Per share (loss) income	$	(0.16	)	$	0.20

Non-GAAP Results ($M except per share data)

	Q3 ‘13			Q3 ‘12
Adjusted EBITA	$	(5.1	)	$	14.2
Net (loss) income	$	(3.0	)	$	11.7
Per share (loss) income	$	(0.08	)	$	0.30

Third Quarter 2013 Results

“Veeco’s third quarter 2013 results were impacted by persistent overcapacity and weak business conditions in our MOCVD and Data Storage businesses,” said John R. Peeler, Veeco’s Chairman and Chief Executive Officer.  “Third quarter revenue was $99 million, and we lost $5 million on an adjusted EBITA basis and non-GAAP loss per share was ($0.08).  In addition to low volumes, our gross margins remain under pressure from intense pricing pressure in MOCVD.”  Third quarter LED & Solar revenues were $75 million: $68 million in MOCVD and $7 million in MBE.  Data Storage revenues were $24 million.

Peeler continued, “Veeco’s third quarter bookings increased to $92 million, compared to $85 million in the prior quarter.  MOCVD bookings increased 28% sequentially to $67 million.  We are pleased to be winning the most important deals, but we have not yet seen a recovery in MOCVD demand. Production orders for MBE and Data Storage systems also remain elusive, and bookings in those businesses were weak, at $7 million and $18 million, respectively.”

“While business conditions have remained challenging throughout 2013, we remain positive about long-term trends in LED lighting and our new opportunity in flexible OLED encapsulation for mobile phones,” added Peeler. “Our strong R&D capability, technology leadership position, world class sales and support organization, flexible manufacturing approach and solid balance sheet provide a strong foundation for the future.”

November 11, 2013 Conference Call Information

A conference call reviewing these results has been scheduled for 5:00pm ET on Monday, November 11th at 1-888-233-7976 (toll free) or 1-913-981-4900 using passcode 8358383.  The call will also be webcast live on the Veeco website at www.veeco.com.  A replay of the call will be available beginning at 8:00pm ET that evening through midnight on November 25, 2013 at 888-203-1112 or 719-457-0820, using passcode 8358383, or on the Veeco website.  We will post an accompanying slide presentation to our website prior to the beginning of the call.

About Veeco

Veeco’s process equipment solutions enable the manufacture of LEDs, flexible OLEDs, power electronics, hard drives, MEMS and wireless chips.  We are the market leader in MOCVD, MBE, Ion Beam and other advanced thin film process technologies.  Our high performance systems drive innovation in energy efficiency, consumer electronics and network storage and allow our customers to maximize productivity and achieve lower cost of ownership.  For information on our company, products and worldwide service and support, please visit www.veeco.com.

To the extent that this news release discusses expectations 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 risks discussed in the Business Description and Management’s Discussion and Analysis sections of Veeco’s Annual Report on Form 10-K for the year ended December 31, 2012 and in our subsequent quarterly reports on Form 10-Q, current reports on Form 8-K and press releases.  Veeco does not undertake any obligation to update any forward-looking statements to reflect future events or circumstances after the date of such statements.

-financial tables attached-

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Veeco Instruments Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

	Three months ended						Nine months ended
	September 30,						September 30,
	2013			2012			2013			2012
Net sales	$	99,324		$	132,715		$	258,540		$	409,171
Cost of sales	69,016			82,831			171,040			232,765
Gross profit	30,308			49,884			87,500			176,406
Operating expenses (income):
Selling, general and administrative	19,650			13,892			59,077			54,558
Research and development	18,993			25,775			60,600			72,991
Amortization	855			1,477			2,566			3,877
Restructuring	1,240			2,014			1,771			2,077
Other, net	(493		)	(737		)	(141		)	(626		)
Total operating expenses	40,245			42,421			123,873			132,877
Operating (loss) income	(9,937		)	7,463			(36,373		)	43,529
Interest income, net	(192		)	(176		)	(620		)	(708		)
(Loss) income from continuing operations before income taxes	(9,745		)	7,639			(35,753		)	44,237
Income tax (benefit) provision	(3,719		)	(59		)	(15,575		)	9,066
(Loss) income from continuing operations	(6,026		)	7,698			(20,178		)	35,171
Discontinued operations:
Income from discontinued operations before income taxes	—			5,396			—			6,534
Income tax provision	—			1,341			—			1,722
Income from discontinued operations, net of tax	—			4,055			—			4,812
Net (loss) income	$	(6,026	)	$	11,753		$	(20,178	)	$	39,983
(Loss) income per common share:
Basic:
Continuing operations	$	(0.16	)	$	0.20		$	(0.52	)	$	0.92
Discontinued operations	—			0.10			—			0.12
(Loss) income	$	(0.16	)	$	0.30		$	(0.52	)	$	1.04
Diluted:
Continuing operations	$	(0.16	)	$	0.20		$	(0.52	)	$	0.90
Discontinued operations	—			0.10			—			0.13
(Loss) income	$	(0.16	)	$	0.30		$	(0.52	)	$	1.03
Weighted average shares outstanding:
Basic	38,841			38,577			38,774			38,402
Diluted	38,841			39,169			38,774			39,006

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Veeco Instruments Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

	September 30,		December 31,
	2013		2012
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	247,666	$	384,557
Short-term investments	322,488		192,234
Restricted cash	2,850		2,017
Accounts receivable, net	37,769		63,169
Inventories, net	57,585		59,807
Prepaid expenses and other current assets	36,864		32,155
Deferred income taxes, current	10,545		10,545
Total current assets	715,767		744,484
Property, plant and equipment at cost, net	95,698		98,302
Goodwill	55,828		55,828
Deferred income taxes	6,072		935
Intangible assets, net	18,407		20,974
Other assets, net	17,341		16,781
Total assets	$	909,113	$	937,304
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	28,334	$	26,087
Accrued expenses and other current liabilities	60,283		74,260
Deferred revenue	8,032		9,380
Income taxes payable	974		2,292
Current portion of long-term debt	285		268
Total current liabilities	97,908		112,287
Deferred income taxes	7,110		7,137
Long-term debt	1,922		2,138
Other liabilities	4,894		4,530
Total liabilities	111,834		126,092
Equity	797,279		811,212
Total liabilities and equity	$	909,113	$	937,304

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Veeco Instruments Inc. and Subsidiaries

Reconciliation of GAAP to non-GAAP results

(In thousands, except per share data)

(Unaudited)

	Three months ended						Nine months ended
	September 30,						September 30,
	2013			2012			2013			2012
Adjusted EBITA
Operating (loss) income	$	(9,937	)	$	7,463		$	(36,373	)	$	43,529
Non-GAAP adjustments:
Amortization	855			1,477			2,566			3,877
Equity-based compensation	2,763			3,265			9,055			10,409
Restructuring	1,240			2,014			1,771			2,077
(Loss) earnings from continuing operations before interest, income taxes and amortization excluding certain items (“Adjusted EBITA”)	$	(5,079	)	$	14,219		$	(22,981	)	$	59,892
Non-GAAP Net (Loss) Income
Net (loss) income from continuing operations (GAAP basis)	$	(6,026	)	$	7,698		$	(20,178	)	$	35,171
Non-GAAP adjustments:
Amortization	855			1,477			2,566			3,877
Equity-based compensation	2,763			3,265			9,055			10,409
Restructuring	1,240			2,014			1,771			2,077
Income tax effect of non-GAAP adjustments	(1,822		)(1)	(2,772		)(1)	(4,936		)(1)	(6,400		)(1)
Non-GAAP net (loss) income	$	(2,990	)	$	11,682		$	(11,722	)	$	45,134
Non-GAAP (loss) earnings per diluted share excluding certain items (“Non-GAAP EPS”)	$	(0.08	)	$	0.30		$	(0.30	)	$	1.16
Diluted weighted average shares outstanding	38,841			39,169			38,774			39,006

(1) The Company utilized the with and without method to determine the income tax effect of non-GAAP adjustments.

NOTE - This reconciliation is not in accordance with, or an alternative method for, generally accepted accounting principles in the United States (“GAAP”), and may be different from similar measures presented by other companies. Management of the Company evaluates performance of its business units based on adjusted EBITA, which is the primary indicator used to plan and forecast future periods. The presentation of this financial measure facilitates meaningful comparison with prior periods, as management of the Company believes adjusted EBITA reports baseline performance and thus provides useful information.

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Veeco Instruments Inc. and Subsidiaries

Segment Bookings, Revenues, and Reconciliation

of Operating (Loss) Income to Adjusted (Loss) EBITA

(In thousands)

(Unaudited)

	Three months ended						Nine months ended
	September 30,						September 30,
	2013			2012			2013			2012
LED & Solar
Bookings	$	73,517		$	67,842		$	174,321		$	229,766
Revenues	$	75,001		$	98,905		$	193,241		$	281,257
Operating (loss) income	$	(4,063	)	$	5,733		$	(15,674	)	$	28,922
Amortization	531			1,154			1,595			2,878
Equity-based compensation	1,016			1,914			3,042			4,016
Restructuring	793			660			1,216			718
Adjusted (loss) EBITA	$	(1,723	)	$	9,461		$	(9,821	)	$	36,534
Data Storage
Bookings	$	17,966		$	15,850		$	72,340		$	69,858
Revenues	$	24,323		$	33,810		$	65,299		$	127,914
Operating income (loss)	$	925		$	1,896		$	(136	)	$	21,453
Amortization	324			323			971			999
Equity-based compensation	439			763			1,057			1,614
Restructuring	447			1,296			497			1,301
Adjusted EBITA	$	2,135		$	4,278		$	2,389		$	25,367
Unallocated Corporate
Operating loss	$	(6,607	)	$	10		$	(19,943	)	$	(6,138	)
Interest income, net	(192		)	$	(176	)	(620		)	$	(708	)
Equity-based compensation	1,308			588			4,956			4,779
Restructuring	—			58			58			58
Adjusted (loss) EBITA	$	(5,491	)	$	480		$	(15,549	)	$	(2,009	)
Total
Bookings	$	91,483		$	83,692		$	246,661		$	299,624
Revenues	$	99,324		$	132,715		$	258,540		$	409,171
Operating (loss) income	$	(9,745	)	$	7,639		$	(35,753	)	$	44,237
Interest income, net	(192		)	(176		)	(620		)	(708		)
Amortization	855			1,477			2,566			3,877
Equity-based compensation	2,763			3,265			9,055			10,409
Restructuring	1,240			2,014			1,771			2,077
Adjusted (loss) EBITA	$	(5,079	)	$	14,219		$	(22,981	)	$	59,892

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