Veeco Instruments (VECO) 10-Q 1 Aug 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 21, 2016
Document and Entity Information
Entity Registrant Name	VEECO INSTRUMENTS INC
Entity Central Index Key	103,145
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		40,638,047
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 257,641	$ 269,232
Short-term investments	73,211	116,050
Accounts receivable, net	41,695	49,524
Inventories	90,771	77,469
Deferred cost of sales	2,590	2,100
Prepaid expenses and other current assets	20,356	22,760
Assets held for sale	11,177	5,000
Total current assets	497,441	542,135
Property, plant and equipment, net	62,981	79,590
Intangible assets, net	121,380	131,674
Goodwill	114,908	114,908
Deferred income taxes	1,384	1,384
Other assets	21,056	21,098
Total assets	819,150	890,789
Current liabilities:
Accounts payable	34,883	30,074
Accrued expenses and other current liabilities	35,113	49,393
Customer deposits and deferred revenue	65,753	76,216
Income taxes payable	654	6,208
Current portion of long-term debt	354	340
Total current liabilities	136,757	162,231
Deferred income taxes	13,014	11,211
Long-term debt	1,013	1,193
Other liabilities	6,141	1,539
Total liabilities	156,925	176,174
Stockholders' equity:
Preferred stock, 500,000 shares authorized; no shares issued and outstanding
Common stock, $0.01 par value; 120,000,000 shares authorized; 40,926,048 shares issued and 40,638,047 shares outstanding at June 30, 2016; 40,995,694 shares issued and 40,526,902 shares outstanding at December 31, 2015.	409	410
Additional paid-in capital	759,572	767,137
Accumulated deficit	(93,987)	(45,058)
Accumulated other comprehensive income	1,414	1,348
Treasury stock, at cost, 288,001 shares at June 30, 2016; 468,792 shares at December 31, 2015.	(5,183)	(9,222)
Total stockholders' equity	662,225	714,615
Total liabilities and stockholders' equity	$ 819,150	$ 890,789

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Consolidated Balance Sheets
Preferred stock, shares authorized	500,000	500,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized shares	120,000,000	120,000,000
Common stock, shares issued	40,926,048	40,995,694
Common stock, shares outstanding	40,638,047	40,526,902
Treasury Stock, Shares	288,001	468,792

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Consolidated Statements of Operations
Net sales	$ 75,348	$ 131,410	$ 153,359	$ 229,751
Cost of sales	43,909	82,341	89,964	145,545
Gross profit	31,439	49,069	63,395	84,206
Operating expenses, net:
Selling, general, and administrative	19,995	24,365	39,834	47,247
Research and development	21,543	20,119	43,653	38,704
Amortization of intangible assets	5,273	7,979	10,524	15,941
Restructuring	2,095	683	2,195	3,040
Asset impairment	13,627		13,627	126
Other, net	159	(51)	88	(1,002)
Total operating expenses, net	62,692	53,095	109,921	104,056
Operating income (loss)	(31,253)	(4,026)	(46,526)	(19,850)
Interest income	290	243	596	530
Interest expense	(105)	(124)	(143)	(250)
Loss before income taxes	(31,068)	(3,907)	(46,073)	(19,570)
Income tax expense	1,014	4,479	1,542	7,926
Net income (loss)	$ (32,082)	$ (8,386)	$ (47,615)	$ (27,496)
Income (loss) per common share:
Basic (in dollars per share)	$ (0.82)	$ (0.21)	$ (1.22)	$ (0.69)
Diluted (in dollars per share)	$ (0.82)	$ (0.21)	$ (1.22)	$ (0.69)
Weighted average number of shares:
Basic (in shares)	38,965	39,693	39,035	39,666
Diluted (in shares)	38,965	39,693	39,035	39,666

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Consolidated Statements of Comprehensive Income (Loss)
Net income (loss)	$ (32,082)	$ (8,386)	$ (47,615)	$ (27,496)
Other comprehensive income, net of tax
Unrealized gain (loss) on available-for-sale securities	(11)	(7)	39	26
Reclassifications from AOCI into net income		(1)		(1)
Foreign currency translation	(12)	(15)	27	(30)
Total other comprehensive income, net of tax	(23)	(23)	66	(5)
Comprehensive income (loss)	$ (32,105)	$ (8,409)	$ (47,549)	$ (27,501)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash Flows from Operating Activities
Net income (loss)	$ (47,615)	$ (27,496)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	17,291	21,725
Deferred income taxes	1,821	879
Share-based compensation expense	8,390	8,919
Asset impairment	13,627	126
Gain on sale of lab tools		(179)
Provision for bad debts	160
Changes in operating assets and liabilities:
Accounts receivable	7,584	(22,709)
Inventories and deferred cost of sales	(14,577)	(21,269)
Prepaid expenses and other current assets	2,404	(2,844)
Accounts payable and accrued expenses	(9,156)	19,041
Customer deposits and deferred revenue	(10,378)	31,599
Income taxes receivable and payable, net	(1,091)	2,309
Other, net	409	1,860
Net cash provided by (used in) operating activities	(31,131)	11,961
Cash Flows from Investing Activities
Capital expenditures	(9,179)	(7,530)
Proceeds from the liquidation of investments	78,145	50,147
Payments for purchases of investments	(35,533)	(11,998)
Proceeds from sale of lab tools		1,533
Other	(213)	(865)
Net cash provided by investing activities	33,220	31,287
Cash Flows from Financing Activities
Proceeds from stock option exercises	473	1,157
Restricted stock tax withholdings	(665)	(1,180)
Purchases of common stock	(13,349)
Repayments of long-term debt	(166)	(153)
Net cash used in financing activities	(13,707)	(176)
Effect of exchange rate changes on cash and cash equivalents	27	(30)
Net increase (decrease) in cash and cash equivalents	(11,591)	43,042
Cash and cash equivalents - beginning of period	269,232	270,811
Cash and cash equivalents - end of period	257,641	313,853
Supplemental Disclosure of Cash Flow Information
Interest paid	103	71
Income taxes paid	$ 1,284	$ 2,625

Basis of Presentation

Basis of Presentation	6 Months Ended
	Jun. 30, 2016
Basis of Presentation
Basis of Presentation	Note 1 - Basis of Presentation The accompanying unaudited Consolidated Financial Statements of Veeco have been prepared in accordance with U.S. GAAP as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 270 for interim financial information and with the instructions to Rule 10-01 of Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements as the interim information is an update of the information that was presented in Veeco’s most recent annual financial statements. For further information, refer to Veeco’s Consolidated Financial Statements and Notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2015 (“2015 Form 10-K”). In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal, recurring nature. C ertain amounts previously reported have been reclassified in the financial statements to conform to the current presentation. Veeco reports interim quarters on a 13-week basis ending on the last Sunday of each quarter. The fourth quarter always ends on the last day of the calendar year, December 31. The 2016 interim quarters end on April 3, July 3, and October 2, and the 2015 interim quarters ended on March 29, June 28, and September 27. These interim quarters are reported as March 31, June 30 and September 30 in Veeco’s interim consolidated financial statements. Revenue recognition Veeco recognizes revenue when all of the following criteria have been met: persuasive evidence of an arrangement exists with a customer; delivery of the specified products has occurred or services have been rendered; prices are contractually fixed or determinable; and collectability is reasonably assured. Revenue is recorded including shipping and handling costs and excluding applicable taxes related to sales. Contracts with customers frequently contain multiple deliverables , such as systems, upgrades, components, spare parts, maintenance, and service plans . Judgment is required to properly identify the accounting units of the multiple-element arrangements and to determine how the revenue should be allocated among the accounting units. Veeco also evaluates whether multiple transactions with the same customer or related parties should be considered part of a single, multiple-element arrangement based on an assessment of whether the contracts or agreements are negotiated or executed within a short time frame of each other or if there are indicators that the contracts are negotiated in contemplation of one another. Moreover, judgment is used in interpreting the commercial terms and determining when all criteria have been met in order to recognize revenue in the appropriate accounting period. When there are separate units of accounting, Veeco allocates revenue to each element based on the following selling price hierarchy: vendor-specific objective evidence (“VSOE”) if available; third party evidence (“TPE”) if VSOE is not available; or the best estimate of selling price (“BESP”) if neither VSOE nor TPE is available. Veeco uses BESP for the majority of the elements in its arrangements. The maximum revenue recognized on a delivered element is limited to the amount that is not contingent upon the delivery of additional items. Veeco considers many facts when evaluating each of its sales arrangements to determine the timing of revenue recognition including its contractual obligations, the customer’s creditworthiness, and the nature of the customer’s post-delivery acceptance provisions. Veeco’s system sales arrangements, including certain upgrades, generally include field acceptance provisions that may include functional or mechanical test procedures. For the majority of the arrangements, a customer source inspection of the system is performed in Veeco’s facility or test data is sent to the customer documenting that the system is functioning to the agreed upon specifications prior to delivery. Historically, such source inspection or test data replicates the field acceptance provisions that are performed at the customer’s site prior to final acceptance of the system. When Veeco objectively demonstrates that the criteria specified in the contractual acceptance provisions are achieved prior to delivery, revenue is recognized upon system delivery since there is no substantive contingency remaining related to the acceptance provisions at that date, subject to the retention amount constraint described below. For new products, new applications of existing products, or for products with substantive customer acceptance provisions where Veeco cannot objectively demonstrate that the criteria specified in the contractual acceptance provisions have been achieved prior to delivery, revenue and the associated costs are deferred and fully recognized upon the receipt of final customer acceptance, assuming all other revenue recognition criteria have been met. Veeco’s system sales arrangements, including certain upgrades, generally do not contain provisions for the right of return, forfeiture, refund, or other purchase price concessions. In the rare instances where such provisions are included, all revenue is deferred until such rights expire. The sales arrangements generally include installation. The installation process is not deemed essential to the functionality of the equipment since it is not complex; it does not require significant changes to the features or capabilities of the equipment or involve constructing elaborate interfaces or connections subsequent to factory acceptance. Veeco has a demonstrated history of consistently completing installations in a timely manner and can reliably estimate the costs of such activities. Most customers engage Veeco to perform the installation services, although there are other third-party providers with sufficient knowledge who could complete these services. Based on these factors, installation is deemed to be inconsequential or perfunctory relative to the system sale as a whole, and as a result, installation service is not considered a separate element of the arrangement. As such, Veeco accrues the cost of the installation at the time of revenue recognition for the system. In many cases Veeco’s products are sold with a billing retention, typically 10% of the sales price, which is payable by the customer when field acceptance provisions are completed. The amount of revenue recognized upon delivery of a system or upgrade, if any, is limited to the lower of i) the amount billed that is not contingent upon acceptance provisions or ii) the value of the arrangement consideration allocated to the delivered elements, if such sale is part of a multiple-element arrangement. Veeco’s contractual terms with customers in Japan generally specify that title and risk and rewards of ownership transfer upon customer acceptance. A distributor is used for almost all sales to customers in Japan. Title passes to the distributor upon shipment; however, due to customary local business practices, the risk and rewards of ownership of the system transfers to the end-customers upon their acceptance. As a result, for customers in Japan, Veeco recognizes revenue upon receipt of written acceptance from the end customer. Veeco recognizes revenue related to maintenance and service contracts ratably over the applicable contract term. Veeco recognizes revenue from the sales of components, spare parts, and specified service engagements at the time of delivery in accordance with the terms of the applicable sales arrangement. Incremental direct costs incurred related to the acquisition of a customer contract, such as sales commissions, are expensed as incurred, even if the related revenue is deferred in accordance with the above policy. Recent accounting pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, as amended: Revenue from Contracts with Customers (the “Update”). The Update requires Veeco’s revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which Veeco expects to be entitled in exchange for those goods or services. The Update outlines a five-step model to make the revenue recognition determination and requires new financial statement disclosures. Publicly-traded companies are required to adopt the Update for reporting periods beginning after December 15, 2017. The Update provides for different transition alternatives. Veeco is evaluating the impact of adopting the Update on its consolidated financial statements and related financial statement disclosures and has not yet determined which method of adoption will be selected. In January 2016, the FASB issued ASU 2016-01: Financial Instruments — Overall , which requires certain equity investments to be measured at fair value, with changes in fair value recognized in net income. Publicly-traded companies are required to adopt the update for reporting periods beginning after December 15, 2017; early adoption is permitted. Veeco does not expect this ASU will have a material impact on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02: Leases , which generally requires Veeco’s operating lessee rights and obligations to be recognized as assets and liabilities on the Balance Sheet. In addition, interest on lease liabilities is to be recognized separately from the amortization of right-of-use assets in the Statement of Operations. Further, payments of the principal portion of lease liabilities are to be classified as financing activities while payments of interest on lease liabilities and variable lease payments are to be classified as operating activities in the Statement of Cash Flows. When the standard is adopted, Veeco will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early application permitted. Veeco is evaluating the impact of adopting the ASU on its consolidated financial statements. Veeco is also evaluating other pronouncements recently issued but not yet adopted. The adoption of these pronouncements is not expected to have a material impact on Veeco’s consolidated financial statements. Change in Accounting Principle In March 2016, the FASB issued ASU 2016-09 Stock Compensation: Improvements to Employee Share-Based Payment Accounting . Veeco adopted the ASU during the first quarter of 2016. Beginning in 2016, excess tax benefits and deficiencies are recognized as income tax expense or benefit in the income statement in the reporting period incurred. In conjunction with adopting the ASU, Veeco has made an accounting policy election to account for forfeitures when they occur. The ASU transition guidance requires that this election be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period in which the ASU is effective. Accordingly, Veeco recorded a $1.3 million charge to the opening accumulated deficit balance with a corresponding adjustment to additional paid-in capital, resulting in no impact to the opening balance of total stockholders’ equity. In addition, Veeco recorded additional deferred tax assets with an offsetting valuation allowance of $2.4 million.

Income (Loss) Per Common Share

Income (Loss) Per Common Share	6 Months Ended
	Jun. 30, 2016
Income (Loss) Per Common Share
Income (Loss) Per Common Share	Note 2 - Income (Loss) Per Common Share Basic income (loss) per common share is calculated by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted income per common share is calculated by dividing net income available to common stockholders by the weighted average number of common shares and common share equivalents outstanding during the period. The dilutive effect of outstanding options to purchase common stock and non-participating restricted share awards and restricted share units is considered in diluted income per common share by application of the treasury stock method. The dilutive effect of performance share units is included in diluted income per common share in the periods the performance targets have been achieved. The computations of basic and diluted income (loss) per common share for the three and six months ended June 30, 2016 and 2015 are as follows: Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 (in thousands, except per share amounts) Net income (loss) $ ) $ ) $ ) $ ) Net income (loss) per common share: Basic $ ) $ ) $ ) $ ) Diluted $ ) $ ) $ ) $ ) Basic weighted average shares outstanding Diluted weighted average shares outstanding Unvested participating shares excluded from basic weighted average shares outstanding since the securityholders are not obligated to fund losses Common share equivalents excluded from the diluted weighted average shares outstanding since Veeco incurred a net loss and their effect would be antidilutive Potentially dilutive non-participating shares excluded from the diluted calculation as their effect would be antidilutive

Assets

Assets	6 Months Ended
	Jun. 30, 2016
Assets
Assets	Note 3 - Assets Investments and Assets held for sale Marketable securities are generally classified as available-for-sale and reported at fair value, with unrealized gains and losses, net of tax, presented as a separate component of stockholders’ equity under the caption “Accumulated other comprehensive income” in the Consolidated Balance Sheets. These securities may include U.S. treasuries, government agency securities, corporate debt, and commercial paper, all with maturities of greater than three months when purchased. All realized gains and losses and unrealized losses resulting from declines in fair value that are other than temporary are included in “Other, net” in the Consolidated Statements of Operations. Fair value is the price that would be received for an asset or the amount paid to transfer a liability in an orderly transaction between market participants. Veeco classifies certain assets based on the following fair value hierarchy: Level 1: Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly; and Level 3: Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Veeco has evaluated the estimated fair value of financial instruments using available market information and valuations as provided by third-party sources. The use of different market assumptions and/or estimation methodologies could have a significant effect on the estimated fair value amounts. The following table presents the portion of Veeco’s assets that were measured at fair value on a recurring basis at June 30, 2016 and December 31, 2015: Level 1 Level 2 Level 3 Total (in thousands) June 30, 2016 Short-term investments U.S. treasuries $ $ — $ — $ Government agency securities — — Commercial paper — — Total $ $ $ — $ December 31, 2015 Cash equivalents U.S. treasuries $ $ — $ — $ Government agency securities — — Commercial paper — — Total — Short-term investments U.S. treasuries — — Government agency securities — — Corporate debt — — Total $ $ $ — $ There were no transfers between fair value measurement levels during the three and six months ended June 30, 2016. At June 30, 2016 and December 31, 2015, the amortized cost and fair value of available-for-sale securities consist of: Gross Gross Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value (in thousands) June 30, 2016 U.S. treasuries $ $ $ — $ Government agency securities — — Commercial paper — — Total $ $ $ — $ December 31, 2015 U.S. treasuries $ $ $ ) $ Government agency securities — Corporate debt ) Total $ $ $ ) $ There were no available-for-sale securities in a loss position at June 30, 2016. Available-for-sale securities in a loss position at December 31, 2015 consist of: December 31, 2015 Gross Estimated Unrealized Fair Value Losses (in thousands) U.S. treasuries $ $ ) Corporate debt ) Total $ $ ) At December 31, 2015, there were no short-term investments that had been in a continuous loss position for more than 12 months. The available-for-sale securities at June 30, 2016 all contractually mature in one year or less. Actual maturities may differ from contractual maturities. Veeco may sell these securities prior to maturity based on the needs of the business. In addition, borrowers may have the right to call or prepay obligations prior to scheduled maturities. There were minimal realized gains for the three and six months ended June 30, 2016 and 2015. The cost of securities liquidated is based on specific identification. Accounts receivable Accounts receivable is presented net of an allowance for doubtful accounts of $0.4 million and $0.2 million at June 30, 2016 and December 31, 2015, respectively. Inventories Inventories are stated at the lower of cost or net realizable value on a first-in, first-out basis. Inventories at June 30, 2016 and December 31, 2015 consist of the following : June 30, December 31, 2016 2015 (in thousands) Materials $ $ Work-in-process Finished goods Total $ $ Prepaid expenses and other current assets Prepaid expenses and other current assets primarily consist of supplier deposits, prepaid value-added tax, lease deposits, prepaid insurance, and prepaid licenses. Veeco had deposits with its suppliers of $11.1 million and $14.6 million at June 30, 2016 and December 31, 2015, respectively. Assets held for sale During the second quarter of 2016, the Company undertook initiatives to reduce costs, enhance efficiency and streamline operations. As part of that initiative, the Company listed its facility in Yongin-city, South Korea for sale and received an offer from a potential buyer for the Company’s building in Hyeongok-ri, South Korea. In addition, the Company continues to market one of its properties in St. Paul, Minnesota. During the second quarter of 2016, the Company evaluated the market conditions for all of its assets held for sale and determined that the carrying value of the assets exceeded their fair market value, less cost to sell. As a result, the Company recorded an impairment charge of approximately $7.5 million. The carrying value of assets held for sale reflects Veeco’s estimate of fair value less costs to sell using the sales comparison market approach. Property, plant, and equipment Property, plant, and equipment at June 30, 2016 and December 31, 2015 consist of the following: June 30, December 31, 2016 2015 (in thousands) Land $ $ Building and improvements Machinery and equipment(1) Leasehold improvements Gross property, plant and equipment Less: accumulated depreciation and amortization Net property, plant, and equipment $ $ (1) Machinery and equipment also includes software, furniture and fixtures For the three and six months ended June 30, 2016, depreciation expense was $3.4 million and $6.8 million, respectively, and $3.0 million and $5.8 million for the comparable 2015 periods. As part of the Company’s efforts to reduce costs, enhance efficiency and streamline operations, the Company removed certain lab equipment that is no longer required and recorded a non-cash impairment charge of $6.1 million. In addition, during the second quarter of 2016, land and buildings with a pre-impairment net carrying value of $13.7 million were classified as assets held for sale on the Consolidated Balance Sheets. Goodwill Goodwill is an asset representing the future economic benefits arising from assets acquired in a business combination that are not individually identified and separately recognized. There were no changes to goodwill during the six months ended June 30, 2016. Intangible assets Long-lived intangible assets consist of purchased technology, customer-related intangible assets, patents, trademarks, covenants not-to-compete, and software licenses and are initially recorded at fair value. Long-lived intangibles are amortized over their estimated useful lives in a method reflecting the pattern in which the economic benefits are consumed or amortized on a straight-line basis if such pattern cannot be reliably determined. The components of purchased intangible assets at June 30, 2016 and December 31, 2015 consist of the following: June 30, 2016 December 31, 2015 Accumulated Accumulated Gross Amortization Gross Amortization Carrying and Net Carrying and Net Amount Impairment Amount Amount Impairment Amount (in thousands) Technology $ $ $ $ $ $ Customer relationships Trademarks and tradenames Indefinite-lived trademark — — Other Total $ $ $ $ $ $ Other intangible assets primarily consist of patents, licenses, and non-compete agreements. Other assets Veeco has an ownership interest of less than 20% in a non-marketable investment. Veeco does not exert significant influence over the investee and therefore the investment is carried at cost. There was no change to the $21.0 million carrying value of the investment during the six months ended June 30, 2016. The investment is included in “Other assets” on the Consolidated Balance Sheet. The investment is subject to a periodic impairment review; as there are no open-market valuations, the impairment analysis requires judgment. The analysis includes assessments of the investee’s financial condition, the business outlook for its products and technology, its projected results and cash flow, business valuation indications from recent rounds of financing, the likelihood of obtaining subsequent rounds of financing, and the impact of equity preferences held by Veeco relative to other investors. Fair value of the investment is not estimated unless there are identified events or changes in circumstances that could have a significant adverse effect on the fair value of the investment. No such events or circumstances are present.

Liabilities

Liabilities	6 Months Ended
	Jun. 30, 2016
Liabilities
Liabilities	Note 4 - Liabilities Accrued expenses and other current liabilities The components of accrued expenses and other current liabilities at June 30, 2016 and December 31, 2015 consist of: June 30, December 31, 2016 2015 (in thousands) Payroll and related benefits $ $ Warranty Professional fees Installation Sales, use, and other taxes Restructuring liability Other Total $ $ Other liabilities include accruals for costs related to customer training, royalties, and travel. Warranty Warranties are typically valid for one year from the date of system final acceptance, and Veeco estimates the costs that may be incurred under the warranty. Estimated warranty costs are determined by analyzing specific product and historical configuration statistics and regional warranty support costs and are affected by product failure rates, material usage, and labor costs incurred in correcting product failures during the warranty period. Unforeseen component failures or exceptional component performance can also result in changes to warranty costs. Changes in product warranty reserves for the six months ended June 30, 2016 include: (in thousands) Balance - December 31, 2015 $ Warranties issued Consumption of reserves ) Changes in estimate ) Balance - June 30, 2016 $ Restructuring accruals During the six months ended June 30, 2016, additional accruals were recognized and payments made related to previous years’ restructuring initiatives. In addition, the Company undertook additional restructuring activities as part of its initiative to reduce costs, enhance efficiency, and streamline operations. As a result of these actions, during the second quarter of 2016, the Company notified approximately 40 employees of their termination from the Company and recorded restructuring charges related to these actions of $2.0 million, consisting of personnel severance and related costs. The Company expects to incur additional restructuring costs over the next few quarters of $5 to $8 million related to ongoing restructuring activities. Personnel Severance and Facility Related Costs Closing Costs Total (in thousands) Balance - December 31, 2015 $ $ — $ Provision Changes in estimate ) — ) Payments ) ) ) Balance - June 30, 2016 $ $ — $ Customer deposits Customer deposits totaled $17.9 million and $28.2 million at June 30, 2016 and December 31, 2015, respectively. Long-term debt Debt consists of a mortgage note payable with a carrying value of $1.4 million and $1.5 million at June 30, 2016 and December 31, 2015, respectively. The mortgage note payable is secured by certain land and buildings. One of the buildings is currently held for sale. The annual interest rate on the mortgage is 7.91%, and the final payment is due on January 1, 2020. Veeco estimated the mortgage fair value as $1.4 million and $1.6 million at June 30, 2016 and December 31, 2015, respectively, using a discounted cash flow model. Other Liabilities Other liabilities primarily consist of income taxes payable and other liabilities not expected to be paid within one year. Non-current income taxes payable were $4.5 million and $0.0 million at June 30, 2016 and December 31, 2015, respectively.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2016
Commitments and Contingencies
Commitments and Contingencies	Note 5 - Commitments and Contingencies Minimum lease commitments At June 30, 2016, Veeco’s total future minimum lease payments under non-cancelable operating leases have not changed significantly from the disclosure in the 2015 Form 10-K. Purchase commitments Veeco has purchase commitments of $50.3 million at June 30, 2016, substantially all of which become due within one year. Bank guarantees Veeco has bank guarantees and letters of credit issued by a financial institution on its behalf as needed. At June 30, 2016, outstanding bank guarantees and letters of credit totaled $4.7 million, and unused bank guarantees and letters of credit of $60.5 million were available to be drawn upon. Legal proceedings Veeco and certain other parties were named as defendants in a lawsuit filed on April 25, 2013 in the Superior Court of California, County of Sonoma. The plaintiff in the lawsuit, Patrick Colbus, sought unspecified damages and asserted claims that he suffered burns and other injuries while cleaning a molecular beam epitaxy system alleged to have been manufactured by Veeco. The lawsuit alleged, among other things, that the molecular beam epitaxy system was defective and that Veeco failed to adequately warn of the potential risks of the system. During the six months ended June 30, 2016, the parties agreed to settle the lawsuit, without any admission of wrongdoing. The settlement amount was fully covered by Veeco’s insurance. Veeco is involved in various other legal proceedings arising in the normal course of business. Veeco does not believe that the ultimate resolution of these matters will have a material adverse effect on its consolidated financial position, results of operations, or cash flows.

Equity

Equity	6 Months Ended
	Jun. 30, 2016
Equity
Equity	Note 6 - Equity Accumulated Other Comprehensive Income (“AOCI”) The following table presents the changes in the balances of each component of AOCI, net of tax: Unrealized Foreign Currency Minimum Pension Gains (Losses) on Available for Sale Translation Liability Securities Total (in thousands) Balance - December 31, 2015 $ $ ) $ ) $ Other comprehensive income, before taxes — Benefit (expense) for income taxes — — Other comprehensive income, net of tax — Balance - June 30, 2016 $ $ ) $ $ There were minimal reclassifications from AOCI into net income for the six months ended June 30, 2016.

Share-based compensation

Share-based compensation	6 Months Ended
	Jun. 30, 2016
Share-based compensation
Share-based compensation	Note 7 - Share-based compensation Restricted share awards are issued to employees that are subject to specified restrictions and a risk of forfeiture. The restrictions typically lapse over one to five years and may entitle holders to dividends and voting rights. Other types of share-based compensation include performance share awards, performance share units, and restricted share units (collectively with restricted share awards, “restricted shares”), as well as options to purchase common stock. Share-based compensation expense was recognized in the following line items in the Consolidated Statements of Operations for the three and six months ended June 30, 2016 and 2015: Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 (in thousands) Cost of sales $ $ $ $ Selling, general, and administrative Research and development Total $ $ $ $ For the six months ended June 30, 2016, equity activity related to stock options was as follows: Number of Weighted Average Shares Exercise Price (in thousands) Balance - December 31, 2015 $ Granted — — Exercised ) Expired or forfeited ) Balance - June 30, 2016 $ For the six months ended June 30, 2016, equity activity related to restricted shares and performance shares was as follows: Weighted Average Number of Grant Date Shares Fair Value (in thousands) Balance - December 31, 2015 $ Granted Released ) Forfeited ) Balance - June 30, 2016 $

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2016
Income Taxes
Income Taxes	Note 8 - Income Taxes Income taxes are estimated for each of the jurisdictions in which the Company operates. Deferred income taxes reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as the tax effect of carry forwards. A valuation allowance is recorded to reduce deferred tax assets to the amount that is more likely than not to be realized. Realization of net deferred tax assets is dependent on future taxable income. At the end of each interim reporting period, the effective tax rate is aligned to expectations for the full year. This estimate is used to determine the income tax provision on a year-to-date basis and may change in subsequent interim periods. Loss before income taxes and income tax expense for the three and six months ended June 30, 2016 and 2015 were as follows: Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 (in thousands) Loss before income taxes $ ) $ ) $ ) $ ) Income tax expense $ $ $ $ For the three months ended June 30, 2016, the $1.0 million net expense for income taxes included $0.5 million relating to Veeco’s U.S. operations and $0.5 million relating to Veeco’s non-U.S. operations. For the six months ended June 30, 2016, the $1.5 million net expense for income taxes included $0.9 million relating to Veeco’s U.S. operations and $0.6 million relating to Veeco’s non-U.S. operations. For three and six months ended June 30, 2016, Veeco did not provide a current tax benefit on U.S. pre-tax losses as the amounts are not realizable on a more-likely-than-not basis. The U.S. tax expense is primarily related to U.S. tax amortization expense of indefinite-lived intangible assets that is not available to offset existing deferred tax assets. For three and six months ended June 30, 2015, Veeco did not provide a current tax benefit on its U.S. pre-tax losses as the amounts were not realizable on a more-likely-than-not basis. The U.S. tax expense is primarily related to withholding taxes and is also related to U.S. tax amortization expense of indefinite-lived intangible assets that is not available to offset existing deferred tax assets.

Segment Reporting and Geographi

Segment Reporting and Geographic Information	6 Months Ended
	Jun. 30, 2016
Segment Reporting and Geographic Information
Segment Reporting and Geographic Information	Note 9 - Segment Reporting and Geographic Information Veeco operates and measures its results in one operating segment and therefore has one reportable segment: the design, development, manufacture, and support of thin film process equipment primarily sold to make electronic devices. Veeco categorizes its sales into the following four end-markets: Lighting, Display & Power Electronics Lighting refers to Light Emitting Diode (“LED”); semiconductor illumination sources used in various applications including backlights, general lighting, automotive running lights, and head lamps. Display refers to LED displays including outdoor display/signage applications. Power Electronics refers to GaN-on-Silicon semiconductor devices such as rectifiers, inverters, and converters for the control and conversion of electric power. Advanced Packaging, MEMS & RF Advanced Packaging includes a portfolio of wafer-level assembly technologies that enable the miniaturization and performance improvement of electronic products, such as smartphones, smartwatches, tablets, and laptops. Micro-Electro Mechanical Systems (“MEMS”) includes tiny mechanical devices such as sensors, switches, mirrors, and actuators embedded in semiconductor chips used in vehicles, smartphones, tablets, and games. Radio Frequency (“RF”) includes semiconductor devices that make use of radio waves (RF fields) for wireless broadcasting and/or communications. Scientific & Industrial Scientific refers to advanced materials research at university research institutions, industry research institutions, industry consortiums, and government research agencies. Industrial refers to large-scale product manufacturing applications including optical coatings: thin layers of material deposited on a lens or mirror that alters how light reflects and transmits; extreme ultraviolet (“EUV”) photomask: an opaque plate that allows light to shine through in a defined pattern for use in photolithography; front end semiconductor: early steps in the process of integrated circuit fabrication where the microchips are created but still remain on the silicon wafer; and high power lasers such as fiber lasers used for industrial materials processing. Data Storage The Data Storage end-market refers to the archiving of data in electromagnetic or other forms for use by a computer or device, including hard disk drives used in large capacity storage applications. Sales by end-market and geographic region for the three and six months ended June 30, 2016 and 2015 were as follows: Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 (in thousands) Sales by end-market Lighting, Display & Power Electronics $ $ $ $ Advanced Packaging, MEMS & RF Scientific & Industrial Data Storage Total $ $ $ $ Sales by geographic region United States $ $ $ $ China EMEA(1) Rest of World Total $ $ $ $ (1) EMEA consists of Europe, the Middle East, and Africa For geographic reporting, sales are attributed to the location in which the customer facility is located.

Basis of Presentation (Policies

Basis of Presentation (Policies)	6 Months Ended
	Jun. 30, 2016
Basis of Presentation
Revenue Recognition	Revenue recognition Veeco recognizes revenue when all of the following criteria have been met: persuasive evidence of an arrangement exists with a customer; delivery of the specified products has occurred or services have been rendered; prices are contractually fixed or determinable; and collectability is reasonably assured. Revenue is recorded including shipping and handling costs and excluding applicable taxes related to sales. Contracts with customers frequently contain multiple deliverables , such as systems, upgrades, components, spare parts, maintenance, and service plans . Judgment is required to properly identify the accounting units of the multiple-element arrangements and to determine how the revenue should be allocated among the accounting units. Veeco also evaluates whether multiple transactions with the same customer or related parties should be considered part of a single, multiple-element arrangement based on an assessment of whether the contracts or agreements are negotiated or executed within a short time frame of each other or if there are indicators that the contracts are negotiated in contemplation of one another. Moreover, judgment is used in interpreting the commercial terms and determining when all criteria have been met in order to recognize revenue in the appropriate accounting period. When there are separate units of accounting, Veeco allocates revenue to each element based on the following selling price hierarchy: vendor-specific objective evidence (“VSOE”) if available; third party evidence (“TPE”) if VSOE is not available; or the best estimate of selling price (“BESP”) if neither VSOE nor TPE is available. Veeco uses BESP for the majority of the elements in its arrangements. The maximum revenue recognized on a delivered element is limited to the amount that is not contingent upon the delivery of additional items. Veeco considers many facts when evaluating each of its sales arrangements to determine the timing of revenue recognition including its contractual obligations, the customer’s creditworthiness, and the nature of the customer’s post-delivery acceptance provisions. Veeco’s system sales arrangements, including certain upgrades, generally include field acceptance provisions that may include functional or mechanical test procedures. For the majority of the arrangements, a customer source inspection of the system is performed in Veeco’s facility or test data is sent to the customer documenting that the system is functioning to the agreed upon specifications prior to delivery. Historically, such source inspection or test data replicates the field acceptance provisions that are performed at the customer’s site prior to final acceptance of the system. When Veeco objectively demonstrates that the criteria specified in the contractual acceptance provisions are achieved prior to delivery, revenue is recognized upon system delivery since there is no substantive contingency remaining related to the acceptance provisions at that date, subject to the retention amount constraint described below. For new products, new applications of existing products, or for products with substantive customer acceptance provisions where Veeco cannot objectively demonstrate that the criteria specified in the contractual acceptance provisions have been achieved prior to delivery, revenue and the associated costs are deferred and fully recognized upon the receipt of final customer acceptance, assuming all other revenue recognition criteria have been met. Veeco’s system sales arrangements, including certain upgrades, generally do not contain provisions for the right of return, forfeiture, refund, or other purchase price concessions. In the rare instances where such provisions are included, all revenue is deferred until such rights expire. The sales arrangements generally include installation. The installation process is not deemed essential to the functionality of the equipment since it is not complex; it does not require significant changes to the features or capabilities of the equipment or involve constructing elaborate interfaces or connections subsequent to factory acceptance. Veeco has a demonstrated history of consistently completing installations in a timely manner and can reliably estimate the costs of such activities. Most customers engage Veeco to perform the installation services, although there are other third-party providers with sufficient knowledge who could complete these services. Based on these factors, installation is deemed to be inconsequential or perfunctory relative to the system sale as a whole, and as a result, installation service is not considered a separate element of the arrangement. As such, Veeco accrues the cost of the installation at the time of revenue recognition for the system. In many cases Veeco’s products are sold with a billing retention, typically 10% of the sales price, which is payable by the customer when field acceptance provisions are completed. The amount of revenue recognized upon delivery of a system or upgrade, if any, is limited to the lower of i) the amount billed that is not contingent upon acceptance provisions or ii) the value of the arrangement consideration allocated to the delivered elements, if such sale is part of a multiple-element arrangement. Veeco’s contractual terms with customers in Japan generally specify that title and risk and rewards of ownership transfer upon customer acceptance. A distributor is used for almost all sales to customers in Japan. Title passes to the distributor upon shipment; however, due to customary local business practices, the risk and rewards of ownership of the system transfers to the end-customers upon their acceptance. As a result, for customers in Japan, Veeco recognizes revenue upon receipt of written acceptance from the end customer. Veeco recognizes revenue related to maintenance and service contracts ratably over the applicable contract term. Veeco recognizes revenue from the sales of components, spare parts, and specified service engagements at the time of delivery in accordance with the terms of the applicable sales arrangement. Incremental direct costs incurred related to the acquisition of a customer contract, such as sales commissions, are expensed as incurred, even if the related revenue is deferred in accordance with the above policy.
Recent Accounting Pronouncements	Recent accounting pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, as amended: Revenue from Contracts with Customers (the “Update”). The Update requires Veeco’s revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which Veeco expects to be entitled in exchange for those goods or services. The Update outlines a five-step model to make the revenue recognition determination and requires new financial statement disclosures. Publicly-traded companies are required to adopt the Update for reporting periods beginning after December 15, 2017. The Update provides for different transition alternatives. Veeco is evaluating the impact of adopting the Update on its consolidated financial statements and related financial statement disclosures and has not yet determined which method of adoption will be selected. In January 2016, the FASB issued ASU 2016-01: Financial Instruments — Overall , which requires certain equity investments to be measured at fair value, with changes in fair value recognized in net income. Publicly-traded companies are required to adopt the update for reporting periods beginning after December 15, 2017; early adoption is permitted. Veeco does not expect this ASU will have a material impact on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02: Leases , which generally requires Veeco’s operating lessee rights and obligations to be recognized as assets and liabilities on the Balance Sheet. In addition, interest on lease liabilities is to be recognized separately from the amortization of right-of-use assets in the Statement of Operations. Further, payments of the principal portion of lease liabilities are to be classified as financing activities while payments of interest on lease liabilities and variable lease payments are to be classified as operating activities in the Statement of Cash Flows. When the standard is adopted, Veeco will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early application permitted. Veeco is evaluating the impact of adopting the ASU on its consolidated financial statements. Veeco is also evaluating other pronouncements recently issued but not yet adopted. The adoption of these pronouncements is not expected to have a material impact on Veeco’s consolidated financial statements. Change in Accounting Principle In March 2016, the FASB issued ASU 2016-09 Stock Compensation: Improvements to Employee Share-Based Payment Accounting . Veeco adopted the ASU during the first quarter of 2016. Beginning in 2016, excess tax benefits and deficiencies are recognized as income tax expense or benefit in the income statement in the reporting period incurred. In conjunction with adopting the ASU, Veeco has made an accounting policy election to account for forfeitures when they occur. The ASU transition guidance requires that this election be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period in which the ASU is effective. Accordingly, Veeco recorded a $1.3 million charge to the opening accumulated deficit balance with a corresponding adjustment to additional paid-in capital, resulting in no impact to the opening balance of total stockholders’ equity. In addition, Veeco recorded additional deferred tax assets with an offsetting valuation allowance of $2.4 million.

Income (Loss) Per Common Share

Income (Loss) Per Common Share (Tables)	6 Months Ended
	Jun. 30, 2016
Income (Loss) Per Common Share
Schedule of basic and diluted net income (loss) per common share and weighted average shares	Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 (in thousands, except per share amounts) Net income (loss) $ ) $ ) $ ) $ ) Net income (loss) per common share: Basic $ ) $ ) $ ) $ ) Diluted $ ) $ ) $ ) $ ) Basic weighted average shares outstanding Diluted weighted average shares outstanding Unvested participating shares excluded from basic weighted average shares outstanding since the securityholders are not obligated to fund losses Common share equivalents excluded from the diluted weighted average shares outstanding since Veeco incurred a net loss and their effect would be antidilutive Potentially dilutive non-participating shares excluded from the diluted calculation as their effect would be antidilutive

Assets (Tables)

Assets (Tables)	6 Months Ended
	Jun. 30, 2016
Assets
Schedule of portion of Veeco's assets (excluding cash balances) that are measured at fair value on a recurring basis	Level 1 Level 2 Level 3 Total (in thousands) June 30, 2016 Short-term investments U.S. treasuries $ $ — $ — $ Government agency securities — — Commercial paper — — Total $ $ $ — $ December 31, 2015 Cash equivalents U.S. treasuries $ $ — $ — $ Government agency securities — — Commercial paper — — Total — Short-term investments U.S. treasuries — — Government agency securities — — Corporate debt — — Total $ $ $ — $
Schedule of amortized cost and fair value of available-for-sale securities	Gross Gross Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value (in thousands) June 30, 2016 U.S. treasuries $ $ $ — $ Government agency securities — — Commercial paper — — Total $ $ $ — $ December 31, 2015 U.S. treasuries $ $ $ ) $ Government agency securities — Corporate debt ) Total $ $ $ ) $
Summary of fair value and unrealized losses of available-for-sale securities in a loss position	December 31, 2015 Gross Estimated Unrealized Fair Value Losses (in thousands) U.S. treasuries $ $ ) Corporate debt ) Total $ $ )
Schedule of inventories	June 30, December 31, 2016 2015 (in thousands) Materials $ $ Work-in-process Finished goods Total $ $
Schedule of property, plant and equipment	June 30, December 31, 2016 2015 (in thousands) Land $ $ Building and improvements Machinery and equipment(1) Leasehold improvements Gross property, plant and equipment Less: accumulated depreciation and amortization Net property, plant, and equipment $ $ (1) Machinery and equipment also includes software, furniture and fixtures
Schedule of intangible assets excluding goodwill	June 30, 2016 December 31, 2015 Accumulated Accumulated Gross Amortization Gross Amortization Carrying and Net Carrying and Net Amount Impairment Amount Amount Impairment Amount (in thousands) Technology $ $ $ $ $ $ Customer relationships Trademarks and tradenames Indefinite-lived trademark — — Other Total $ $ $ $ $ $

Liabilities (Tables)

Liabilities (Tables)	6 Months Ended
	Jun. 30, 2016
Liabilities
Schedule of accrued expenses and other current liabilities	June 30, December 31, 2016 2015 (in thousands) Payroll and related benefits $ $ Warranty Professional fees Installation Sales, use, and other taxes Restructuring liability Other Total $ $
Schedule of changes in product warranty reserves	(in thousands) Balance - December 31, 2015 $ Warranties issued Consumption of reserves ) Changes in estimate ) Balance - June 30, 2016 $
Schedule of restructuring accrual activities	Personnel Severance and Facility Related Costs Closing Costs Total (in thousands) Balance - December 31, 2015 $ $ — $ Provision Changes in estimate ) — ) Payments ) ) ) Balance - June 30, 2016 $ $ — $

Equity (Tables)

Equity (Tables)	6 Months Ended
	Jun. 30, 2016
Equity
Schedule of the changes in the balances of each component of accumulated other comprehensive income	Unrealized Foreign Currency Minimum Pension Gains (Losses) on Available for Sale Translation Liability Securities Total (in thousands) Balance - December 31, 2015 $ $ ) $ ) $ Other comprehensive income, before taxes — Benefit (expense) for income taxes — — Other comprehensive income, net of tax — Balance - June 30, 2016 $ $ ) $ $

Share-based compensation (Table

Share-based compensation (Tables)	6 Months Ended
	Jun. 30, 2016
Share-based compensation
Schedule of share-based compensation expense	Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 (in thousands) Cost of sales $ $ $ $ Selling, general, and administrative Research and development Total $ $ $ $
Summary of stock option activity	Number of Weighted Average Shares Exercise Price (in thousands) Balance - December 31, 2015 $ Granted — — Exercised ) Expired or forfeited ) Balance - June 30, 2016 $
Summary of restricted and performance shares activity	Weighted Average Number of Grant Date Shares Fair Value (in thousands) Balance - December 31, 2015 $ Granted Released ) Forfeited ) Balance - June 30, 2016 $

Income Taxes (Tables)

Income Taxes (Tables)	6 Months Ended
	Jun. 30, 2016
Income Taxes
Schedule of income (loss) before income taxes and income tax expense	Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 (in thousands) Loss before income taxes $ ) $ ) $ ) $ ) Income tax expense $ $ $ $

Segment Reporting and Geograp23

Segment Reporting and Geographic Information (Tables)	6 Months Ended
	Jun. 30, 2016
Segment Reporting and Geographic Information
Schedule of sales by end-market	Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 (in thousands) Sales by end-market Lighting, Display & Power Electronics $ $ $ $ Advanced Packaging, MEMS & RF Scientific & Industrial Data Storage Total $ $ $ $
Schedule of sales by geographic region	Sales by geographic region United States $ $ $ $ China EMEA(1) Rest of World Total $ $ $ $ (1) EMEA consists of Europe, the Middle East, and Africa

Basis of Presentation (Details)

Basis of Presentation (Details)	6 Months Ended
	Jun. 30, 2016
Basis of Presentation
Number of weeks in each fiscal quarter for 52-week fiscal year	91 days

Basis of Presentation - Revenue

Basis of Presentation - Revenue recognition (Details)	6 Months Ended
	Jun. 30, 2016
Revenue Recognition
Revenue retention percentage	10.00%

Basis of Presentation - Change

Basis of Presentation - Change in Accounting Principle (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Change in Accounting Principle
Accumulated deficit balance	$ (93,987,000)	$ (45,058,000)
Additional paid-in capital	759,572,000	767,137,000
Total stockholders' equity	$ 662,225,000	714,615,000
ASU 2016-09 | Adjustments for New Accounting Principle, Early Adoption
Change in Accounting Principle
Accumulated deficit balance		(1,300,000)
Additional paid-in capital		1,300,000
Total stockholders' equity		0
Deferred tax assets before valuation allowance		2,400,000
Valuation allowance of deferred tax assets		$ (2,400,000)

Income (Loss) Per Common Shar27

Income (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income (Loss) Per Common Share
Net income (loss)	$ (32,082)	$ (8,386)	$ (47,615)	$ (27,496)
Net income (loss) per common share:
Basic (in dollars per share)	$ (0.82)	$ (0.21)	$ (1.22)	$ (0.69)
Diluted (in dollars per share)	$ (0.82)	$ (0.21)	$ (1.22)	$ (0.69)
Basic weighted average shares outstanding	38,965	39,693	39,035	39,666
Diluted weighted average shares outstanding	38,965	39,693	39,035	39,666

Income (Loss) Per Common Shar28

Income (Loss) Per Common Share - Potentially Dilutive Shares (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Diluted income (loss) per share
Shares excluded from the diluted weighted average shares outstanding since Veeco incurred a net loss and their effect would be antidilutive	34	169	50	174
Unvested Participating Shares
Basic income (loss) per share
Unvested participating shares excluded from basic weighted average shares outstanding since the security holders are not obligated to fund losses	659	1,097	691	1,120
Non-participating Shares
Diluted income (loss) per share
Potentially dilutive non-participating shares excluded from the diluted calculation as their effect would be antidilutive	2,425	1,976	2,350	1,964

Assets (Details)

Assets (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Cash and Cash Equivalents
Total	$ 257,641	$ 257,641	$ 269,232	$ 313,853	$ 270,811
Short-Term Investments
Total	73,211	73,211	116,050
Transfer of assets between levels	0	0
Assets measured on a recurring basis
Cash and Cash Equivalents
Total			17,996
Short-Term Investments
Total	73,211	73,211	116,050
Assets measured on a recurring basis | U.S. treasuries
Cash and Cash Equivalents
Total			9,999
Short-Term Investments
Total	62,750	62,750	94,918
Assets measured on a recurring basis | Government agency securities
Cash and Cash Equivalents
Total			4,998
Short-Term Investments
Total	9,262	9,262	12,988
Assets measured on a recurring basis | Corporate debt
Short-Term Investments
Total			8,144
Assets measured on a recurring basis | Commercial paper
Cash and Cash Equivalents
Total			2,999
Short-Term Investments
Total	1,199	1,199
Assets measured on a recurring basis | Level 1
Cash and Cash Equivalents
Total			9,999
Short-Term Investments
Total	62,750	62,750	94,918
Assets measured on a recurring basis | Level 1 | U.S. treasuries
Cash and Cash Equivalents
Total			9,999
Short-Term Investments
Total	62,750	62,750	94,918
Assets measured on a recurring basis | Level 2
Cash and Cash Equivalents
Total			7,997
Short-Term Investments
Total	10,461	10,461	21,132
Assets measured on a recurring basis | Level 2 | Government agency securities
Cash and Cash Equivalents
Total			4,998
Short-Term Investments
Total	9,262	9,262	12,988
Assets measured on a recurring basis | Level 2 | Corporate debt
Short-Term Investments
Total			8,144
Assets measured on a recurring basis | Level 2 | Commercial paper
Cash and Cash Equivalents
Total			$ 2,999
Short-Term Investments
Total	$ 1,199	$ 1,199

Assets - Available-For-Sale Sec

Assets - Available-For-Sale Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Total available-for-sale securities
Amortized Cost	$ 73,204	$ 116,064
Gross Unrealized Gains	7	10
Gross Unrealized Losses		(24)
Estimated Fair Value	73,211	116,050
Available-for-sale securities in a loss position
Estimated Fair value	0	68,275
Gross Unrealized Losses		(24)
Investments that had been in a continuous loss position for more than 12 months		0
U.S. treasuries
Total available-for-sale securities
Amortized Cost	62,743	94,935
Gross Unrealized Gains	7	6
Gross Unrealized Losses		(23)
Estimated Fair Value	62,750	94,918
Available-for-sale securities in a loss position
Estimated Fair value		64,922
Gross Unrealized Losses		(23)
Government agency securities
Total available-for-sale securities
Amortized Cost	9,262	12,985
Gross Unrealized Gains		3
Estimated Fair Value	9,262	12,988
Commercial paper
Total available-for-sale securities
Amortized Cost	1,199
Estimated Fair Value	$ 1,199
Corporate debt
Total available-for-sale securities
Amortized Cost		8,144
Gross Unrealized Gains		1
Gross Unrealized Losses		(1)
Estimated Fair Value		8,144
Available-for-sale securities in a loss position
Estimated Fair value		3,353
Gross Unrealized Losses		$ (1)

Assets - Current Assets (Detail

Assets - Current Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Assets
Allowance for doubtful accounts receivable	$ 400	$ 200
Inventories
Materials	51,962	42,373
Work in process	32,130	30,327
Finished goods	6,679	4,769
Inventories	90,771	77,469
Prepaid expenses and other current assets
Supplier deposits	$ 11,100	$ 14,600

Assets - Property, Plant and Eq

Assets - Property, Plant and Equipment (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Property, plant and equipment, net
Gross property, plant, and equipment	$ 158,795,000		$ 158,795,000		$ 179,843,000
Less accumulated depreciation and amortization	95,814,000		95,814,000		100,253,000
Net property, plant and equipment	62,981,000		62,981,000		79,590,000
Depreciation	3,400,000	$ 3,000,000	6,800,000	$ 5,800,000
Impairment charges on building and lab tools	6,100,000
Assets held for sale	13,700,000		13,700,000
Assets held for sale
Impairment charges on assets held for sale	7,500,000
Goodwill
Changes in goodwill during the period			0
Intangible assets
Accumulated Amortization and Impairment	156,789,000		156,789,000		150,440,000
Total Gross Intangible Assets	278,169,000		278,169,000		282,114,000
Total Net Intangible Assets	121,380,000		121,380,000		131,674,000
Indefinite-lived trademark
Intangible assets
Indefinite-lived intangible assets	2,900,000		2,900,000		2,900,000
Technology
Intangible assets
Gross Carrying Amount	222,358,000		222,358,000		222,358,000
Accumulated Amortization and Impairment	127,531,000		127,531,000		120,496,000
Net Amount	94,827,000		94,827,000		101,862,000
Customer relationships
Intangible assets
Gross Carrying Amount	47,885,000		47,885,000		47,885,000
Accumulated Amortization and Impairment	25,564,000		25,564,000		22,470,000
Net Amount	22,321,000		22,321,000		25,415,000
Trademarks and tradenames
Intangible assets
Gross Carrying Amount	2,730,000		2,730,000		2,730,000
Accumulated Amortization and Impairment	2,013,000		2,013,000		1,937,000
Net Amount	717,000		717,000		793,000
Other
Intangible assets
Gross Carrying Amount	2,296,000		2,296,000		6,241,000
Accumulated Amortization and Impairment	1,681,000		1,681,000		5,537,000
Net Amount	615,000		615,000		704,000
Land
Property, plant and equipment, net
Gross property, plant, and equipment	5,061,000		5,061,000		9,592,000
Building and improvements
Property, plant and equipment, net
Gross property, plant, and equipment	46,772,000		46,772,000		54,622,000
Machinery and equipment
Property, plant and equipment, net
Gross property, plant, and equipment	101,448,000		101,448,000		110,075,000
Leaseholds improvements
Property, plant and equipment, net
Gross property, plant, and equipment	$ 5,514,000		$ 5,514,000		$ 5,554,000

Assets - Cost Method Investment

Assets - Cost Method Investment (Details) $ in Millions	6 Months Ended
	Jun. 30, 2016USD ($)
Cost Method Investment
change in additional investment	$ 0
Carrying value of the investment as of 6/30/2016	$ 21
Maximum
Cost Method Investment
Percentage ownership of cost method investee	20.00%

Liabilities (Details)

Liabilities (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Accrued expenses and other current liabilities
Payroll and related benefits	$ 20,642	$ 30,917
Warranty	5,087	8,159
Professional fees	2,245	2,224
Installation	1,559	1,110
Sales, use, and other taxes	628	1,132
Restructuring liability	1,365	824
Other	3,587	5,027
Total	$ 35,113	$ 49,393
Accrued Warranty
Warranty period of products purchased	1 year
Balance as of the beginning of period	$ 8,159
Warranties issued	2,140
Consumption of reserves	(4,424)
Changes in estimate	(788)
Balance as of the end of period	$ 5,087

Liabilities - Restructuring and

Liabilities - Restructuring and Related Costs (Details) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2016USD ($)employee	Jun. 30, 2016USD ($)	Dec. 31, 2015USD ($)
Restructuring and other charges
Number of employees impacted | employee	40
Restructuring Charges	$ 2,000
Restructuring accruals
Balance at the beginning of the period		$ 824
Provision	2,197	2,197
Changes in estimate		(2)
Payments		(1,654)
Balance at the end of the period	1,365	1,365
Customer Deposits and Deferred Revenue
Customer deposits	17,900	17,900	$ 28,200
Minimum
Restructuring and other charges
Additional restructuring costs expected over the next few quarters	5,000	5,000
Maximum
Restructuring and other charges
Additional restructuring costs expected over the next few quarters	8,000	8,000
Personnel severance and related costs
Restructuring accruals
Balance at the beginning of the period		824
Provision	2,018	2,018
Changes in estimate		(2)
Payments		(1,475)
Balance at the end of the period	1,365	1,365
Facility Closing Costs
Restructuring accruals
Provision	$ 179	179
Payments		$ (179)

Liabilities - Debt (Details)

Liabilities - Debt (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Other Liabilities
Income taxes payable	$ 4.5	$ 0
Mortgage Payable
Debt
Mortgage payable outstanding	$ 1.4	1.5
Annual interest rate accrued on mortgage (as a percent)	7.91%
Fair value of debt instrument	$ 1.4	$ 1.6

Commitments and Contingencies (

Commitments and Contingencies (Details) $ in Millions	Jun. 30, 2016USD ($)
Purchase Commitments
Purchase commitments due within one year	$ 50.3
Bank guarantees
Bank guarantees outstanding	4.7
Unused letters of credit	$ 60.5

Equity (Details)

Equity (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Changes in the balances of each component of AOCI
Beginning Balance			$ 714,615
Total other comprehensive income, net of tax	$ (23)	$ (23)	66	$ (5)
Ending Balance	662,225		662,225
Accumulated Other Comprehensive Income
Changes in the balances of each component of AOCI
Beginning Balance			1,348
Other comprehensive income, before taxes			48
Benefit (expense) for income taxes			18
Total other comprehensive income, net of tax			66
Ending Balance	1,414		1,414
Foreign Currency Translation
Changes in the balances of each component of AOCI
Beginning Balance			2,246
Other comprehensive income, before taxes			27
Total other comprehensive income, net of tax			27
Ending Balance	2,273		2,273
Minimum pension liability
Changes in the balances of each component of AOCI
Beginning Balance			(866)
Ending Balance	(866)		(866)
Unrealized Gains (Losses) on Available for sale securities
Changes in the balances of each component of AOCI
Beginning Balance			(32)
Other comprehensive income, before taxes			21
Benefit (expense) for income taxes			18
Total other comprehensive income, net of tax			39
Ending Balance	$ 7		$ 7

Share-based compensation (Detai

Share-based compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Share-based compensation
Total	$ 4,002	$ 4,921	$ 8,390	$ 8,919
Cost of Sales
Share-based compensation
Total	486	713	1,032	1,314
Selling, General, and Administrative
Share-based compensation
Total	2,576	3,112	5,319	5,910
Research and Development
Share-based compensation
Total	$ 940	$ 1,096	$ 2,039	$ 1,695
Stock options
Stock option awards, Shares
Outstanding at the beginning of the period (in shares)			2,064
Exercised (in shares)			(193)
Expired or forfeited (in shares)			(52)
Outstanding at the end of the period (in shares)	1,819		1,819
Weighted Average Exercise price
Outstanding at the beginning of the period (in dollars per share)			$ 32.91
Exercised (in dollars per share)			12.12
Expired or forfeited (in dollars per share)			32.79
Outstanding at the end of the period (in dollars per share)	$ 35.12		$ 35.12
Restricted Stock Awards | Minimum
Share-based compensation
Expiration term			1 year
Restricted Stock Awards | Maximum
Share-based compensation
Expiration term			5 years
Restricted shares and performance shares
Restricted stock awards including restricted stock units, Shares
Outstanding at the beginning of the period (in shares)			1,398
Granted (in shares)			1,131
Released (in shares)			(136)
Forfeited (in shares)			(40)
Outstanding at the end of the period (in shares)	2,353		2,353
Weighted Average Grant Date Fair Value
Outstanding at the beginning of the period (in dollars per share)			$ 31.97
Granted (in dollars per share)			16.93
Released (in dollars per share)			32.61
Forfeited (in dollars per share)			32.69
Outstanding at the end of the period (in dollars per share)	$ 24.68		$ 24.68

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Loss before income taxes	$ (31,068)	$ (3,907)	$ (46,073)	$ (19,570)
Income tax expense	1,014	$ 4,479	1,542	$ 7,926
Domestic
Income tax expense	500		900
Foreign
Income tax expense	$ 500		$ 600

Segment Reporting and Geograp41

Segment Reporting and Geographic Information (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016USD ($)	Jun. 30, 2015USD ($)	Jun. 30, 2016USD ($)itemsegment	Jun. 30, 2015USD ($)
Revenue reporting by end-market and geographic region
Number of operating segments | segment			1
Number of reportable segments | segment			1
Number of end-markets | item			4
Total Sales	$ 75,348	$ 131,410	$ 153,359	$ 229,751
United States
Revenue reporting by end-market and geographic region
Total Sales	20,734	19,632	47,446	47,601
China
Revenue reporting by end-market and geographic region
Total Sales	24,582	66,437	33,383	110,718
EMEA
Revenue reporting by end-market and geographic region
Total Sales	14,834	21,990	42,296	30,314
Rest of World
Revenue reporting by end-market and geographic region
Total Sales	15,198	23,351	30,234	41,118
Lighting, Display & Power Electronics
Revenue reporting by end-market and geographic region
Total Sales	24,762	82,122	47,705	146,450
Advanced Packaging, MEMS & RF
Revenue reporting by end-market and geographic region
Total Sales	17,045	13,840	40,308	27,005
Scientific & Industrial
Revenue reporting by end-market and geographic region
Total Sales	19,827	17,960	34,737	31,595
Data Storage
Revenue reporting by end-market and geographic region
Total Sales	$ 13,714	$ 17,488	$ 30,609	$ 24,701