Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 29, 2015 | |
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, 2015 | |
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 | 40,789,271 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 313,853 | $ 270,811 |
Short-term investments | 82,397 | 120,572 |
Restricted cash | 539 | |
Accounts receivable, net | 83,098 | 60,085 |
Inventory | 63,564 | 61,471 |
Deferred cost of sales | 24,384 | 5,076 |
Prepaid expenses and other current assets | 25,976 | 23,132 |
Assets held for sale | 6,000 | 6,000 |
Deferred income taxes | 6,479 | 7,976 |
Total current assets | 605,751 | 555,662 |
Property, plant and equipment, net | 80,002 | 78,752 |
Goodwill | 115,256 | 114,959 |
Deferred income taxes | 1,180 | 1,180 |
Intangible assets, net | 143,367 | 159,308 |
Other assets | 20,325 | 19,594 |
Total assets | 965,881 | 929,455 |
Current liabilities: | ||
Accounts payable | 46,159 | 18,111 |
Accrued expenses and other current liabilities | 39,343 | 48,418 |
Customer deposits and deferred revenue | 128,553 | 96,004 |
Income taxes payable | 7,750 | 5,441 |
Deferred income taxes | 120 | 120 |
Current portion of long-term debt | 327 | 314 |
Total current liabilities | 222,252 | 168,408 |
Deferred income taxes | 15,779 | 16,397 |
Long-term debt | 1,367 | 1,533 |
Other liabilities | 6,183 | 4,185 |
Total liabilities | $ 245,581 | $ 190,523 |
Stockholders' Equity: | ||
Preferred stock, 500,000 shares authorized; no shares issued and outstanding | ||
Common stock, $0.01 par value, 120,000,000 shares authorized; 40,789,138 and 40,360,069 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively | $ 408 | $ 404 |
Additional paid-in capital | 759,004 | 750,139 |
Accumulated deficit | (40,576) | (13,080) |
Accumulated other comprehensive income | 1,464 | 1,469 |
Total stockholders' equity | 720,300 | 738,932 |
Total liabilities and stockholders' equity | $ 965,881 | $ 929,455 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
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 | 40,789,138 | 40,360,069 |
Common stock, shares outstanding | 40,789,138 | 40,360,069 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Consolidated Statements of Operations | ||||
Net sales | $ 131,410 | $ 95,122 | $ 229,751 | $ 185,963 |
Cost of sales | 82,341 | 64,449 | 145,545 | 121,513 |
Gross profit | 49,069 | 30,673 | 84,206 | 64,450 |
Operating expenses, net: | ||||
Selling, general, and administrative | 24,365 | 21,891 | 47,247 | 43,558 |
Research and development | 20,119 | 21,011 | 38,704 | 40,779 |
Amortization of intangible assets | 7,979 | 2,899 | 15,941 | 5,802 |
Restructuring | 683 | 801 | 3,040 | 1,193 |
Asset impairment | 126 | |||
Changes in contingent consideration | (29,368) | |||
Other, net | (51) | (158) | (1,002) | (370) |
Total operating expenses, net | 53,095 | 46,444 | 104,056 | 61,594 |
Operating income (loss) | (4,026) | (15,771) | (19,850) | 2,856 |
Interest income | 243 | 180 | 530 | 386 |
Interest expense | (124) | (108) | (250) | (150) |
Income (loss) before income taxes | (3,907) | (15,699) | (19,570) | 3,092 |
Income tax expense (benefit) | 4,479 | (488) | 7,926 | (857) |
Net income (loss) | $ (8,386) | $ (15,211) | $ (27,496) | $ 3,949 |
Income (loss) per common share: | ||||
Basic (in dollars per share) | $ (0.21) | $ (0.39) | $ (0.69) | $ 0.10 |
Diluted (in dollars per share) | $ (0.21) | $ (0.39) | $ (0.69) | $ 0.10 |
Weighted average number of shares: | ||||
Basic (in shares) | 39,693 | 39,379 | 39,666 | 39,275 |
Diluted (in shares) | 39,693 | 39,379 | 39,666 | 40,061 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Consolidated Statements of Comprehensive Income (Loss) | ||||
Net income (loss) | $ (8,386) | $ (15,211) | $ (27,496) | $ 3,949 |
Other comprehensive income ( loss), net of tax | ||||
Unrealized gain (loss) on available-for-sale securities | (7) | 71 | 26 | 121 |
Less: Reclassification adjustments for gains included in net income | (1) | (45) | (1) | (45) |
Currency translation gain (loss) | (15) | (24) | (30) | 109 |
Other comprehensive income (loss), net of tax | (23) | 2 | (5) | 185 |
Comprehensive income (loss) | $ (8,409) | $ (15,209) | $ (27,501) | $ 4,134 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash Flows from Operating Activities | ||
Net income (loss) | $ (27,496) | $ 3,949 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 21,725 | 11,600 |
Deferred income taxes | 879 | (2,675) |
Asset impairment | 126 | |
Share-based compensation expense | 8,919 | 9,813 |
Provision of bad debts | (1,936) | |
Gain on sale of lab tools | (179) | (2,435) |
Change in contingent consideration | (29,368) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (22,709) | (32,721) |
Inventory and deferred cost of sales | (21,269) | 7,062 |
Prepaid expenses and other current assets | (2,844) | (1,631) |
Accounts payable and accrued expenses | 19,041 | (1,214) |
Customer deposits and deferred revenue | 31,599 | 22,826 |
Income taxes receivable and payable, net | 2,309 | 646 |
Other, net | 1,860 | (692) |
Net cash provided by (used in) operating activities | 11,961 | (16,776) |
Cash Flows from Investing Activities | ||
Capital expenditures | (7,530) | (4,509) |
Proceeds from the liquidation of short-term investments | 50,147 | 121,233 |
Payments for purchases of short-term investments | (11,998) | (92,029) |
Proceeds from sale of lab tools | 1,533 | 7,034 |
Other | (865) | (685) |
Net cash provided by investing activities | 31,287 | 31,044 |
Cash Flows from Financing Activities | ||
Proceeds from stock option exercises | 1,157 | 9,125 |
Payments of tax withholdings - restricted shares | (1,180) | (1,867) |
Repayments of long-term debt | (153) | (141) |
Net cash provided by (used in) financing activities | (176) | 7,117 |
Effect of exchange rate changes on cash and cash equivalents | (30) | 148 |
Net increase in cash and cash equivalents | 43,042 | 21,533 |
Cash and cash equivalents - beginning of period | 270,811 | 210,799 |
Cash and cash equivalents - end of period | 313,853 | 232,332 |
Supplemental information: | ||
Interest paid | 71 | 82 |
Income taxes paid | $ 2,625 | $ 1,999 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2015 | |
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 the 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, 2014 (“2014 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 2015 interim quarters end on March 29, June 28, and September 27, and the 2014 interim quarters ended on March 30, June 29, and September 28. These interim quarters are reported as March 31, June 30 and September 30 in Veeco’s interim consolidated financial statements. Revenue recognition Veeco sells systems, maintenance, service, components, and spare parts. 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. 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. BESP is used for the majority of the elements in Veeco’s 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 can not objectively demonstrate that the criteria specified in the contractual acceptance provisions have been achieved prior to delivery, revenue and the associated costs are fully deferred and recognized upon the receipt of final customer acceptance, assuming all other revenue recognition criteria have been met. 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. As a result, for customers in Japan, revenue is recognized upon the receipt of written customer acceptance. A distributor is used for almost all product and service 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 such, 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. Revenue from the sales of components, spare parts, and specified service engagements is recognized 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”) No. 2014-09: Revenue from Contracts with Customers (the “Update”). The Update requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity 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, 2016; however the FASB recently approved a one-year deferral of the Update. The FASB expects to issue its final ASU formally amending the effective date by the end of the third quarter of 2015. Currently, companies may choose among 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. 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. |
Income (Loss) Per Common Share
Income (Loss) Per Common Share | 6 Months Ended |
Jun. 30, 2015 | |
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. For the three and six months ended June 30, 2015, and for the three months ended June 30, 2014, 1.1 million shares of nonvested, participating, restricted share awards and units were excluded from the computation of basic net loss per share since the securities’ holders are not obligated to fund these losses. The dilutive effect of outstanding options to purchase common stock, 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 outstanding performance share awards and units are included in income per common share when performance targets have been achieved. The computations of basic and diluted income (loss) per common share are: Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 (in thousands, except per share data) Net income (loss) $ ) $ ) $ ) $ Net income (loss) per common share: Basic $ ) $ ) $ ) $ Diluted $ ) $ ) $ ) $ Basic weighted average shares outstanding Effect of potentially dilutive share-based awards — — — Diluted weighted average shares outstanding Shares excluded from diluted calculation since Veeco incurred a net loss as their effect would be antidilutive — Potentially dilutive non-participating shares excluded from diluted calculation as their effect would be antidilutive |
Assets
Assets | 6 Months Ended |
Jun. 30, 2015 | |
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.” 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. The level used 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. In determining fair value, information from pricing services is utilized to value securities based on quoted market prices in active markets and matrix pricing. Matrix pricing is a mathematical valuation technique that does not rely exclusively on quoted prices of specific investments, but on the investment’s relationship to other benchmarked quoted securities. The use of different market assumptions and/or estimation methodologies could have a significant effect on the fair value estimates. The following table presents assets (excluding cash and cash equivalent balances) that are measured at fair value on a recurring basis: Level 1 Level 2 Total (in thousands) June 30, 2015 U.S. treasuries $ $ — $ Government agency securities — Corporate debt — December 31, 2014 U.S. treasuries $ $ — $ Corporate debt — There were no transfers between fair value measurement levels during the six months ended June 30, 2015. There were no financial assets or liabilities measured at fair value using Level 3 fair value measurements at June 30, 2015 or December 31, 2014. 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, 2015 U.S. treasuries $ $ $ — $ Government agency securities — — Corporate debt ) Total available-for-sale securities $ $ $ ) $ December 31, 2014 U.S. treasuries $ $ $ ) $ Corporate debt ) Total available-for-sale securities $ $ $ ) $ Available-for-sale securities in a loss position consist of: June 30, 2015 December 31, 2014 Gross Gross Estimated Unrealized Estimated Unrealized Fair Value Losses Fair Value Losses (in thousands) U.S. treasuries $ — $ — $ $ ) Corporate debt ) ) Total available-for-sale securities in a loss position $ $ ) $ $ ) At June 30, 2015 and December 31, 2014, there were no short-term investments that had been in a continuous loss position for more than 12 months. The contractual maturities of securities classified as available-for-sale are: June 30, 2015 Amortized cost Estimated fair value (in thousands) Due in one year or less $ $ Due after one year through two years Total available-for-sale securities $ $ 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, 2015 and June 30, 2014. The cost of securities liquidated is based on specific identification. Accounts receivable Accounts receivable is presented net of allowance for doubtful accounts of $0.5 million and $0.7 million at June 30, 2015 and December 31, 2014, respectively. Inventory Inventory is stated at the lower of cost or market approximating actual costs using a first-in, first-out basis. Inventory consists of: June 30, 2015 December 31, 2014 (in thousands) Materials $ $ Work-in-process Finished goods Total inventory $ $ Deferred cost of sales For new products, new applications of existing products or for products with substantive customer acceptance provisions where Veeco can not 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. Prepaid expenses and other current assets Prepaid expenses and other current assets primarily consist of supplier deposits, as well as prepaid value-added tax, lease deposits, prepaid insurance, and prepaid licenses. Veeco outsources a majority of its manufacturing to third parties. For outsourced products, Veeco maintains a minimum level of internal manufacturing capability. Supplier deposits were $15.2 million and $12.7 million at June 30, 2015 and December 31, 2014, respectively. Assets held for sale Research and demonstration laboratories in Asia, as well as a vacant building and land, were designated as held for sale during 2014. The carrying value 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 consist of: June 30, 2015 December 31, 2014 (in thousands) Land $ $ Building and improvements Machinery and equipment Leasehold improvements Gross property, plant and equipment Less: accumulated depreciation and amortization Net property, plant, and equipment $ $ For the three and six months ended June 30, 2015, depreciation expense was $3.0 million and $5.8 million, respectively, and $2.9 million and $5.8 million for the comparable 2014 periods. At June 30, 2015 and December 31, 2014, the carrying value of systems that had previously been used in Veeco’s laboratories as Veeco Certified Equipment was approximately $1.0 million and $1.3 million, respectively, and was included in “property, plant, and equipment” in the Consolidated Balance Sheets. These held-for-sale systems are the same types of tools that Veeco sells to customers in the ordinary course of business. When these systems are sold, sales proceeds and the associated costs are included in “Net sales” and “Cost of sales” in the Consolidated Statements of Operations. Goodwill There were no new acquisitions or impairments during the six months ended June 30, 2015. The purchase accounting related to the $145.5 million December 4, 2014 acquisition of Solid State Equipment LLC (“SSEC”), which has been renamed Veeco Precision Surface Processing LLC (“PSP”), remains preliminary. The estimated fair value of the assets acquired and liabilities assumed may be adjusted as further information becomes available during the measurement period of up to 12 months from the acquisition date. Changes in goodwill consist of: Gross carrying Accumulated amount impairment Net amount (in thousands) Goodwill - December 31, 2014 $ $ $ Purchase price allocation adjustment — Goodwill - June 30, 2015 $ $ $ Intangible assets There were no new acquisitions or impairments during the six months ended June 30, 2015. The components of purchased intangible assets consist of: June 30, 2015 December 31, 2014 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 consist of patents, licenses, customer backlog, 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. An additional investment of $0.8 million was made during the three months ended June 30, 2015, increasing the carrying value of the investment from $19.4 million at December 31, 2014 to $20.2 million at June 30, 2015. Subsequent to June 30, 2015, Veeco participated in a new round of financing by investing an additional $0.8 million. Veeco’s ownership interest and participating rights have not changed. Therefore, Veeco continues to carry the investment at cost. The investment is subject to a periodic impairment review; as there are no open-market valuations, the impairment analysis requires significant 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 or 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, 2015 | |
Liabilities | |
Liabilities | Note 4 - Liabilities Accrued expenses and other current liabilities The components of accrued expenses and other current liabilities consist of: June 30, 2015 December 31, 2014 (in thousands) Payroll and related benefits $ $ Warranty Installation Sales, use, and other taxes Professional fees Restructuring liability Other Total accrued liabilities $ $ Other liabilities include accruals for costs related to customer training, royalties, and travel. Warranty reserves Warranties are typically valid for one year from the date of system final acceptance. Estimated warranty costs are determined by analyzing specific product and historical configuration statistics and regional warranty support costs. The estimate is 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 impact warranty costs. Changes in product warranty reserves include: (in thousands) Warranty reserves - December 31, 2014 $ Warranties issued Settlements made ) Changes in estimate ) Warranty reserves - June 30, 2015 $ Restructuring accruals During the six months ended June 30, 2015, additional accruals were recognized and payments made related to the 2014 closing of Veeco’s Ft. Collins, Colorado and Camarillo, California facilities. Business activities formerly conducted at these sites have been transferred to the Plainview, New York facility. In addition, Veeco is closing the Hyeongok-ri, South Korea facility. Veeco has accrued and paid for restructuring activities during the six months ended June 30, 2015. Additional restructuring costs to be accrued for these activities are not expected to be significant. Personnel Severance and Facility Related Costs Closing Costs Total (in thousands) Restructuring accrual - December 31, 2014 $ $ — $ Provision Payments ) ) ) Restructuring accrual - June 30, 2015 $ $ $ Customer deposits and deferred revenue Customer deposits totaled $57.0 million and $73.0 million at June 30, 2015 and December 31, 2014, respectively. The remainder of the balance relates to deferred revenue consisting of billings associated with customer contracts for which all revenue recognition criteria have not yet been met. Long-term debt Debt consists of a mortgage note payable with a carrying value of $1.7 million at June 30, 2015 and $1.8 million at December 31, 2014. The annual interest rate on the mortgage is 7.91%, and the final payment is due on January 1, 2020. The mortgage note payable is secured by certain land and buildings. The property associated with the mortgage is currently held for sale. A discounted cash flow model was used to calculate a level 3 fair value estimate of $1.8 million at June 30, 2015 and $2.0 million at December 31, 2014. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 5 - Commitments and Contingencies Minimum lease commitments At June 30, 2015, Veeco’s total future minimum lease payments under non-cancelable operating leases have not changed significantly from the footnote disclosure in the 2014 Form 10-K. Purchase commitments Veeco has purchase commitments under certain contractual arrangements to make future payments for goods and services. These contractual arrangements secure the rights to various assets and services to be used in the future in the normal course of business. Veeco has purchase commitments of $123.4 million at June 30, 2015, substantially all of which become due within one year. Bank guarantees and letters of credit Veeco has bank guarantees and letters of credit issued by a financial institution on its behalf as needed to cover performance bonds required by customers . At June 30, 2015, outstanding bank guarantees and letters of credit totaled $36.2 million, and unused letters of credit of $30.9 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, seeks unspecified damages and asserts claims that he suffered burns and other injuries while he was cleaning a molecular beam epitaxy system alleged to have been manufactured by Veeco. The lawsuit alleges, 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. Veeco believes this lawsuit is without merit and intends to defend vigorously against the claims. Veeco is unable to predict the outcome of this action or to reasonably estimate the possible loss or range of loss, if any, arising from the claims asserted therein. Veeco believes that, in the event of any recovery by the plaintiff from Veeco, such recovery would be fully covered by insurance. Veeco is involved in other legal proceedings arising in the normal course of business. The resolution of these matters is not expected to have a material adverse effect on Veeco’s consolidated financial position, results of operations, or cash flows. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2015 | |
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: Currency translation gain (loss) Minimum Pension Liability Unrealized Gains on Available-for-sale Securities Total (in thousands) Balance at December 31, 2014 $ $ ) $ $ Other comprehensive income (loss) before reclassifications ) — ) Amounts reclassified from AOCI — — ) ) Other comprehensive income (loss) ) — ) Balance at June 30, 2015 $ $ ) $ $ Veeco did not allocate tax expense to other comprehensive income for the six months ended June 30, 2015 as Veeco is in a full valuation allowance position such that a deferred tax asset related to amounts recognized in other comprehensive income is not regarded as realizable on a more-likely-than-not basis. |
Share-based compensation
Share-based compensation | 6 Months Ended |
Jun. 30, 2015 | |
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 entitle holders to both 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: Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 (in thousands) Cost of sales $ $ $ $ Selling, general, and administrative Research and development Total share-based compensation expense $ $ $ $ Equity activity related to restricted shares: Weighted Average Grant Date Number of Shares Fair Value (in thousands) Restricted shares outstanding - December 31, 2014 $ Granted Vested ) Forfeited ) Restricted shares outstanding - June 30, 2015 $ Equity activity related to stock options: Weighted Average Number of Shares Exercise Price (in thousands) Stock options outstanding - December 31, 2014 $ Granted Exercised ) Expired or forfeited ) Stock options outstanding - June 30, 2015 $ |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2015 | |
Income Taxes | |
Income Taxes | Note 8 - Income Taxes Income taxes are estimated for each of the jurisdictions in which Veeco 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 or benefit on a year-to-date basis and may change in subsequent interim periods. Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 (in thousands) Income (loss) before income taxes $ ) $ ) $ ) $ Income tax expense (benefit) $ $ ) $ $ ) For the three months ended June 30, 2015, the net expense for income taxes included a $3.3 million provision relating to Veeco’s domestic operations and a $1.2 million provision relating to foreign operations. For the six months ended June 30, 2015, the net expense for income taxes included a $5.3 million provision relating to domestic operations and a $2.6 million provision relating to foreign operations. Although there was a domestic pre-tax loss for the period, Veeco did not provide a current tax benefit on such losses as the amounts are not realizable on a more-likely-than-not basis. In addition, Veeco provided withholding taxes and a domestic provision relating to certain deferred tax liabilities that could not be offset against its deferred tax assets. Veeco’s foreign operations are profitable. As such, taxes were provided at rates which approximate the statutory rates of those foreign jurisdictions. For the three and six months ended June 30, 2014, the effective tax rate was different than the statutory tax rate primarily due to the recognition of only a portion of Veeco’s U.S. deferred tax assets on a more-likely-than-not basis with respect to 2014 domestic pre-tax losses. In addition, for the six months ended June 30, 2014, the effective tax rate was also impacted because a tax provision was not provided on the gain from the settlement of the contingent consideration related to the Synos acquisition. |
Segment Reporting and Geographi
Segment Reporting and Geographic Information | 6 Months Ended |
Jun. 30, 2015 | |
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 markets: Lighting, Display & Power Electronics (“Energy Conservation”) 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 and Organic Light Emitting Diode (“OLED”) displays. Power Electronics refers to semiconductor devices such as rectifiers, inverters, and converters for the control and conversion of electric power. Advanced Packaging, MEMS & RF (“Mobility”) 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 university research institutions, industry research institutions, industry consortiums, and government research agencies. Industrial refers to large-scale product manufacturing including optical coatings: thin layers of material deposited on a lens or mirror that alters how light reflects and transmits; photomask: an opaque plate that allows light to shine through in a defined pattern for use in photolithography; and front end semiconductor: early steps in the process of integrated circuit fabrication where the microchips are created but still remain on the silicon wafer. Data Storage The Data Storage 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. Revenue by market: Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 (in thousands) Lighting, Display & Power Electronics $ $ $ $ Advanced Packaging, MEMS & RF Scientific & Industrial Data Storage Total Sales $ $ $ $ Significant operations outside the United States include sales and service offices in the Asia-Pacific and Europe regions. For geographic reporting, revenues are attributed to the location in which the customer facility is located as follows: Revenue by geography: Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 (in thousands) United States $ $ $ $ China EMEA (1) Rest of World Total Sales $ $ $ $ (1) EMEA consists of Europe, the Middle East, and Africa |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Basis of Presentation | |
Revenue Recognition | Revenue recognition Veeco sells systems, maintenance, service, components, and spare parts. 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. 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. BESP is used for the majority of the elements in Veeco’s 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 can not objectively demonstrate that the criteria specified in the contractual acceptance provisions have been achieved prior to delivery, revenue and the associated costs are fully deferred and recognized upon the receipt of final customer acceptance, assuming all other revenue recognition criteria have been met. 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. As a result, for customers in Japan, revenue is recognized upon the receipt of written customer acceptance. A distributor is used for almost all product and service 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 such, 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. Revenue from the sales of components, spare parts, and specified service engagements is recognized 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”) No. 2014-09: Revenue from Contracts with Customers (the “Update”). The Update requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity 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, 2016; however the FASB recently approved a one-year deferral of the Update. The FASB expects to issue its final ASU formally amending the effective date by the end of the third quarter of 2015. Currently, companies may choose among 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. 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. |
Income (Loss) Per Common Share
Income (Loss) Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
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, 2015 2014 2015 2014 (in thousands, except per share data) Net income (loss) $ ) $ ) $ ) $ Net income (loss) per common share: Basic $ ) $ ) $ ) $ Diluted $ ) $ ) $ ) $ Basic weighted average shares outstanding Effect of potentially dilutive share-based awards — — — Diluted weighted average shares outstanding Shares excluded from diluted calculation since Veeco incurred a net loss as their effect would be antidilutive — Potentially dilutive non-participating shares excluded from diluted calculation as their effect would be antidilutive |
Assets (Tables)
Assets (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Assets | |
Schedule of assets (excluding cash balances) that are measured at fair value on a recurring basis | Level 1 Level 2 Total (in thousands) June 30, 2015 U.S. treasuries $ $ — $ Government agency securities — Corporate debt — December 31, 2014 U.S. treasuries $ $ — $ Corporate debt — |
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, 2015 U.S. treasuries $ $ $ — $ Government agency securities — — Corporate debt ) Total available-for-sale securities $ $ $ ) $ December 31, 2014 U.S. treasuries $ $ $ ) $ Corporate debt ) Total available-for-sale securities $ $ $ ) $ |
Summary of fair value and unrealized losses of available-for-sale securities in a loss position | June 30, 2015 December 31, 2014 Gross Gross Estimated Unrealized Estimated Unrealized Fair Value Losses Fair Value Losses (in thousands) U.S. treasuries $ — $ — $ $ ) Corporate debt ) ) Total available-for-sale securities in a loss position $ $ ) $ $ ) |
Schedule of contractual maturities of available-for-sale securities | June 30, 2015 Amortized cost Estimated fair value (in thousands) Due in one year or less $ $ Due after one year through two years Total available-for-sale securities $ $ |
Schedule of inventory | June 30, 2015 December 31, 2014 (in thousands) Materials $ $ Work-in-process Finished goods Total inventory $ $ |
Schedule of property, plant and equipment | June 30, 2015 December 31, 2014 (in thousands) Land $ $ Building and improvements Machinery and equipment Leasehold improvements Gross property, plant and equipment Less: accumulated depreciation and amortization Net property, plant, and equipment $ $ |
Schedule of changes in goodwill | Gross carrying Accumulated amount impairment Net amount (in thousands) Goodwill - December 31, 2014 $ $ $ Purchase price allocation adjustment — Goodwill - June 30, 2015 $ $ $ |
Schedule of intangible assets excluding goodwill | June 30, 2015 December 31, 2014 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, 2015 | |
Liabilities | |
Schedule of accrued expenses and other current liabilities | June 30, 2015 December 31, 2014 (in thousands) Payroll and related benefits $ $ Warranty Installation Sales, use, and other taxes Professional fees Restructuring liability Other Total accrued liabilities $ $ |
Schedule of changes in product warranty reserves | (in thousands) Warranty reserves - December 31, 2014 $ Warranties issued Settlements made ) Changes in estimate ) Warranty reserves - June 30, 2015 $ |
Schedule of restructuring accrual activities | Personnel Severance and Facility Related Costs Closing Costs Total (in thousands) Restructuring accrual - December 31, 2014 $ $ — $ Provision Payments ) ) ) Restructuring accrual - June 30, 2015 $ $ $ |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Equity | |
Schedule of the components of accumulated other comprehensive income | Currency translation gain (loss) Minimum Pension Liability Unrealized Gains on Available-for-sale Securities Total (in thousands) Balance at December 31, 2014 $ $ ) $ $ Other comprehensive income (loss) before reclassifications ) — ) Amounts reclassified from AOCI — — ) ) Other comprehensive income (loss) ) — ) Balance at June 30, 2015 $ $ ) $ $ |
Share-based compensation (Table
Share-based compensation (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Share-based compensation | |
Schedule of share-based compensation expense | Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 (in thousands) Cost of sales $ $ $ $ Selling, general, and administrative Research and development Total share-based compensation expense $ $ $ $ |
Summary of restricted share activity | Weighted Average Grant Date Number of Shares Fair Value (in thousands) Restricted shares outstanding - December 31, 2014 $ Granted Vested ) Forfeited ) Restricted shares outstanding - June 30, 2015 $ |
Summary of stock option activity | Weighted Average Number of Shares Exercise Price (in thousands) Stock options outstanding - December 31, 2014 $ Granted Exercised ) Expired or forfeited ) Stock options outstanding - June 30, 2015 $ |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Income Taxes | |
Schedule of income (loss) before income taxes and provision for income taxes | Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 (in thousands) Income (loss) before income taxes $ ) $ ) $ ) $ Income tax expense (benefit) $ $ ) $ $ ) |
Segment Reporting and Geograp23
Segment Reporting and Geographic Information (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting and Geographic Information | |
Schedule of revenue by market | Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 (in thousands) Lighting, Display & Power Electronics $ $ $ $ Advanced Packaging, MEMS & RF Scientific & Industrial Data Storage Total Sales $ $ $ $ |
Schedule of revenue by geography | Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 (in thousands) United States $ $ $ $ China EMEA (1) Rest of World Total Sales $ $ $ $ (1) EMEA consists of Europe, the Middle East, and Africa |
Basis of Presentation (Details)
Basis of Presentation (Details) | 6 Months Ended |
Jun. 30, 2015 | |
Basis of Presentation | |
Number of weeks in each fiscal quarter for 52-week fiscal year | 91 days |
Basis of Presentation (Details
Basis of Presentation (Details 2) | 6 Months Ended |
Jun. 30, 2015 | |
Revenue Recognition | |
Revenue retention percentage | 10.00% |
Income (Loss) Per Common Shar26
Income (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income (Loss) Per Common Share | ||||
Net income (loss) | $ (8,386) | $ (15,211) | $ (27,496) | $ 3,949 |
Net income (loss) per common share: | ||||
Basic (in dollars per share) | $ (0.21) | $ (0.39) | $ (0.69) | $ 0.10 |
Diluted (in dollars per share) | $ (0.21) | $ (0.39) | $ (0.69) | $ 0.10 |
Basic weighted average shares outstanding | 39,693 | 39,379 | 39,666 | 39,275 |
Effect of potentially dilutive share-based awards | 786 | |||
Diluted weighted average shares outstanding | 39,693 | 39,379 | 39,666 | 40,061 |
Income (Loss) Per Common Shar27
Income (Loss) Per Common Share (Details 2) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Diluted income (loss) per share | ||||
Shares excluded from the calculation of diluted net income (loss) per share since Veeco incurred a net loss (in shares) | 169 | 321 | 174 | |
Nonvested Participating Shares | ||||
Basic income (loss) per share | ||||
Shares excluded from the calculation of basic net income (loss) per share since Veeco incurred a net loss (in shares) | 1,100 | 1,100 | 1,100 | |
Non-participating Shares | ||||
Diluted income (loss) per share | ||||
Shares excluded from the calculation of diluted net income (loss) per share (in shares) | 1,976 | 1,045 | 1,964 | 921 |
Assets (Details)
Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Major categories of assets and liabilities measured on a recurring basis, at fair value | ||
Short-term investments | $ 82,397 | $ 120,572 |
Transfer of assets between levels | 0 | |
Level 3 | ||
Major categories of assets and liabilities measured on a recurring basis, at fair value | ||
Assets measured at fair value | 0 | 0 |
Liabilities measured at fair value | 0 | 0 |
Assets and liabilities measured on a recurring basis | Level 1 | U.S. treasuries | ||
Major categories of assets and liabilities measured on a recurring basis, at fair value | ||
Short-term investments | 59,740 | 81,527 |
Assets and liabilities measured on a recurring basis | Level 2 | Government agency securities | ||
Major categories of assets and liabilities measured on a recurring basis, at fair value | ||
Short-term investments | 5,000 | |
Assets and liabilities measured on a recurring basis | Level 2 | Corporate debt | ||
Major categories of assets and liabilities measured on a recurring basis, at fair value | ||
Short-term investments | 17,657 | 39,045 |
Assets and liabilities measured on a recurring basis | Total | U.S. treasuries | ||
Major categories of assets and liabilities measured on a recurring basis, at fair value | ||
Short-term investments | 59,740 | 81,527 |
Assets and liabilities measured on a recurring basis | Total | Government agency securities | ||
Major categories of assets and liabilities measured on a recurring basis, at fair value | ||
Short-term investments | 5,000 | |
Assets and liabilities measured on a recurring basis | Total | Corporate debt | ||
Major categories of assets and liabilities measured on a recurring basis, at fair value | ||
Short-term investments | $ 17,657 | $ 39,045 |
Assets (Details 2)
Assets (Details 2) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Total available-for-sale securities | ||
Amortized Cost | $ 82,337 | $ 120,537 |
Gross Unrealized Gains | 61 | 47 |
Gross Unrealized Losses | (1) | (12) |
Estimated Fair Value | 82,397 | 120,572 |
Available-for-sale securities in a loss position | ||
Estimated Fair value | 2,139 | 48,070 |
Gross Unrealized Losses | (1) | (12) |
Investments that had been in a continuous loss position for more than 12 months | 0 | 0 |
Amortized costs of contractual maturities of available-for-sale securities | ||
Due in one year or less | 44,647 | |
Due after one year through two years | 37,690 | |
Estimated fair value of contractual maturities of available-for-sale securities | ||
Due in one year or less | 44,668 | |
Due in 1-2 years | 37,729 | |
U.S. treasuries | ||
Total available-for-sale securities | ||
Amortized Cost | 59,693 | 81,506 |
Gross Unrealized Gains | 47 | 27 |
Gross Unrealized Losses | (6) | |
Estimated Fair Value | 59,740 | 81,527 |
Available-for-sale securities in a loss position | ||
Estimated Fair value | 35,001 | |
Gross Unrealized Losses | (6) | |
Government agency securities | ||
Total available-for-sale securities | ||
Amortized Cost | 5,000 | |
Estimated Fair Value | 5,000 | |
Corporate debt | ||
Total available-for-sale securities | ||
Amortized Cost | 17,644 | 39,031 |
Gross Unrealized Gains | 14 | 20 |
Gross Unrealized Losses | (1) | (6) |
Estimated Fair Value | 17,657 | 39,045 |
Available-for-sale securities in a loss position | ||
Estimated Fair value | 2,139 | 13,069 |
Gross Unrealized Losses | $ (1) | $ (6) |
Assets (Details 3)
Assets (Details 3) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Accounts Receivable, Net | ||
Allowance for doubtful accounts receivable (in dollars) | $ 500 | $ 700 |
Prepaid expenses and other current assets | ||
Supplier deposits | 15,200 | 12,700 |
Inventories | ||
Materials | 33,378 | 28,637 |
Work in process | 25,091 | 26,778 |
Finished goods | 5,095 | 6,056 |
Inventories | $ 63,564 | $ 61,471 |
Assets (Details 4)
Assets (Details 4) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 04, 2014 | |
Property, plant and equipment, net | ||||||
Gross property, plant, and equipment | $ 176,061 | $ 176,061 | $ 170,542 | |||
Less accumulated depreciation and amortization | 96,059 | 96,059 | 91,790 | |||
Net property, plant and equipment | 80,002 | 80,002 | 78,752 | |||
Depreciation | 3,000 | $ 2,900 | 5,800 | $ 5,800 | ||
Goodwill | ||||||
Impairment of goodwill | 0 | |||||
Goodwill acquired | 0 | |||||
Gross carrying Amount, beginning balance | 238,158 | |||||
Accumulated Impairment, beginning balance | 123,199 | |||||
Net Amount, beginning balance | 114,959 | |||||
Purchase price adjustment | 297 | |||||
Gross carrying Amount, ending balance | 238,455 | 238,455 | ||||
Accumulated Impairment, ending balance | 123,199 | 123,199 | ||||
Net Amount, ending balance | 115,256 | 115,256 | ||||
Intangible assets | ||||||
Impairment of intangible assets | 0 | |||||
Intangible assets acquired | 0 | |||||
Accumulated Amortization and Impairment | 139,146 | 139,146 | 123,205 | |||
Total Gross Intangible Assets | 282,513 | 282,513 | 282,513 | |||
Total Net Intangible Assets | 143,367 | 143,367 | 159,308 | |||
Indefinite-lived trademark | ||||||
Intangible assets | ||||||
Indefinite-lived intangible assets | 2,900 | 2,900 | 2,900 | |||
Technology | ||||||
Intangible assets | ||||||
Gross Carrying Amount | 222,358 | 222,358 | 222,358 | |||
Accumulated Amortization and Impairment | 113,419 | 113,419 | 106,342 | |||
Net Amount | 108,939 | 108,939 | 116,016 | |||
Customer relationships | ||||||
Intangible assets | ||||||
Gross Carrying Amount | 47,885 | 47,885 | 47,885 | |||
Accumulated Amortization and Impairment | 18,685 | 18,685 | 14,918 | |||
Net Amount | 29,200 | 29,200 | 32,967 | |||
Trademarks and tradenames | ||||||
Intangible assets | ||||||
Gross Carrying Amount | 3,050 | 3,050 | 3,050 | |||
Accumulated Amortization and Impairment | 1,717 | 1,717 | 1,096 | |||
Net Amount | 1,333 | 1,333 | 1,954 | |||
Other | ||||||
Intangible assets | ||||||
Gross Carrying Amount | 6,320 | 6,320 | 6,320 | |||
Accumulated Amortization and Impairment | 5,325 | 5,325 | 849 | |||
Net Amount | 995 | 995 | 5,471 | |||
Tools | ||||||
Property, plant and equipment, net | ||||||
Assets held for sale | 1,000 | 1,000 | 1,300 | |||
Land | ||||||
Property, plant and equipment, net | ||||||
Gross property, plant, and equipment | 9,392 | 9,392 | 9,392 | |||
Building and improvements | ||||||
Property, plant and equipment, net | ||||||
Gross property, plant, and equipment | 54,118 | 54,118 | 51,979 | |||
Machinery and equipment | ||||||
Property, plant and equipment, net | ||||||
Gross property, plant, and equipment | 107,153 | 107,153 | 104,815 | |||
Leaseholds improvements | ||||||
Property, plant and equipment, net | ||||||
Gross property, plant, and equipment | $ 5,398 | $ 5,398 | $ 4,356 | |||
PSP | ||||||
Goodwill | ||||||
Net assets acquired | $ 145,500 |
Assets (Details 5)
Assets (Details 5) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
Cost Method Investment | ||
Additional investment | $ 0.8 | |
Carrying value of the investment | $ 20.2 | $ 19.4 |
Maximum | ||
Cost Method Investment | ||
Percentage ownership of cost method investee | 20.00% |
Liabilities (Details)
Liabilities (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
Accrued Expenses and Other Current Liabilities | ||
Payroll and related benefits | $ 21,634 | $ 28,938 |
Warranty | 5,593 | 5,411 |
Installation | 2,912 | 2,861 |
Sales, use, and other taxes | 2,568 | 1,776 |
Professional fees | 1,989 | 2,752 |
Restructuring liability | 822 | 1,428 |
Other | 3,825 | 5,252 |
Total accrued liabilities | 39,343 | $ 48,418 |
Accrued Warranty | ||
Balance as of the beginning of period | 5,411 | |
Warranties issued | 3,085 | |
Settlements made | (1,932) | |
Changes in estimate | (971) | |
Balance as of the end of period | $ 5,593 | |
Warranty period of products purchased | 1 year |
Liabilities (Details 2)
Liabilities (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Reconciliation of the restructuring liability | |||||
Balance at the beginning of the period | $ 1,428 | ||||
Provision | $ 683 | $ 801 | 3,040 | $ 1,193 | |
Payments | (3,646) | ||||
Balance at the end of the period | 822 | 822 | |||
Customer Deposits and Deferred Revenue | |||||
Customer deposits | 57,000 | 57,000 | $ 73,000 | ||
Personnel severance and related costs | |||||
Reconciliation of the restructuring liability | |||||
Balance at the beginning of the period | 1,428 | ||||
Provision | 2,085 | ||||
Payments | (2,930) | ||||
Balance at the end of the period | 583 | 583 | |||
Facility Closing Costs | |||||
Reconciliation of the restructuring liability | |||||
Provision | 955 | ||||
Payments | (716) | ||||
Balance at the end of the period | $ 239 | $ 239 |
Liabilities (Details 3)
Liabilities (Details 3) - Mortgage Payable - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Debt | ||
Mortgage payable outstanding | $ 1.7 | $ 1.8 |
Annual interest rate accrued on mortgage (as a percent) | 7.91% | |
Level 3 | ||
Debt | ||
Fair value of debt instrument | $ 1.8 | $ 2 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Jun. 30, 2015USD ($) |
Purchase Commitments | |
Purchase commitments due within one year | $ 123.4 |
Bank guarantees and lines of credit | |
Bank guarantees outstanding | 36.2 |
Unused letters of credit | $ 30.9 |
Equity (Details)
Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Changes in the balances of each component of AOCI | ||||
Beginning Balance | $ 1,469 | |||
Other comprehensive income (loss) before reclassifications | (4) | |||
Amounts reclassified from AOCI | (1) | |||
Other comprehensive income (loss) | $ (23) | $ 2 | (5) | $ 185 |
Ending Balance | 1,464 | 1,464 | ||
Currency translation gain (loss) | ||||
Changes in the balances of each component of AOCI | ||||
Beginning Balance | 2,333 | |||
Other comprehensive income (loss) before reclassifications | (30) | |||
Other comprehensive income (loss) | (30) | |||
Ending Balance | 2,303 | 2,303 | ||
Minimum pension liability | ||||
Changes in the balances of each component of AOCI | ||||
Beginning Balance | (881) | |||
Ending Balance | (881) | (881) | ||
Unrealized gain on available for sale securities | ||||
Changes in the balances of each component of AOCI | ||||
Beginning Balance | 17 | |||
Other comprehensive income (loss) before reclassifications | 26 | |||
Amounts reclassified from AOCI | (1) | |||
Other comprehensive income (loss) | 25 | |||
Ending Balance | $ 42 | $ 42 |
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, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Weighted Average Grant Date Fair Value | ||||
Total share-based compensation expense | $ 4,921 | $ 5,091 | $ 8,919 | $ 9,813 |
Cost of Sales | ||||
Weighted Average Grant Date Fair Value | ||||
Total share-based compensation expense | 713 | 620 | 1,314 | 1,180 |
Selling, General and Administrative Expenses | ||||
Weighted Average Grant Date Fair Value | ||||
Total share-based compensation expense | 3,112 | 3,324 | 5,910 | 6,425 |
Research and Development Expense. | ||||
Weighted Average Grant Date Fair Value | ||||
Total share-based compensation expense | $ 1,096 | $ 1,147 | $ 1,695 | $ 2,208 |
Restricted Stock Awards | ||||
Restricted stock awards including restricted stock units, Shares | ||||
Outstanding at the beginning of the period (in shares) | 1,237 | |||
Granted (in shares) | 597 | |||
Vested (in shares) | (125) | |||
Forfeited (in shares) | (59) | |||
Outstanding at the end of the period (in shares) | 1,650 | 1,650 | ||
Weighted Average Grant Date Fair Value | ||||
Outstanding at the beginning of the period (in dollars per share) | $ 34.27 | |||
Grants (in dollars per share) | 31.32 | |||
Vested/released (in dollars per share) | 40.70 | |||
Forfeitures (in dollars per share) | 35.92 | |||
Outstanding at the end of the period (in dollars per share) | $ 32.66 | $ 32.66 | ||
Restricted Stock Awards | Minimum | ||||
Weighted Average Grant Date Fair Value | ||||
Expiration term | 1 year | |||
Restricted Stock Awards | Maximum | ||||
Weighted Average Grant Date Fair Value | ||||
Expiration term | 5 years | |||
Stock options | ||||
Stock option awards, Shares | ||||
Outstanding at the beginning of the period (in shares) | 2,391 | |||
Granted (in shares) | 17 | |||
Exercised (in shares) | (74) | |||
Expired or forfeited (in shares) | (119) | |||
Outstanding at the end of the period (in shares) | 2,215 | 2,215 | ||
Weighted Average Exercise price | ||||
Outstanding at the beginning of the period (in dollars per share) | $ 31.65 | |||
Grants (in dollars per share) | 30.22 | |||
Exercised (in dollars per share) | 19.07 | |||
Expired or forfeited (in dollars per share) | 38.62 | |||
Outstanding at the end of the period (in dollars per share) | $ 31.69 | $ 31.69 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income (loss) before income taxes | $ (3,907) | $ (15,699) | $ (19,570) | $ 3,092 |
Income tax expense (benefit) | 4,479 | $ (488) | 7,926 | $ (857) |
Domestic | ||||
Income tax expense (benefit) | 3,300 | 5,300 | ||
Foreign | ||||
Income tax expense (benefit) | $ 1,200 | $ 2,600 |
Segment Reporting and Geograp40
Segment Reporting and Geographic Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)itemsegment | Jun. 30, 2014USD ($) | |
Segment Reporting and Geographic Information | ||||
Number of operating segments | segment | 1 | |||
Number of reportable segments | segment | 1 | |||
Number of primary sales markets | item | 4 | |||
Revenue reporting by market and geographic location | ||||
Total Sales | $ 131,410 | $ 95,122 | $ 229,751 | $ 185,963 |
United States | ||||
Revenue reporting by market and geographic location | ||||
Total Sales | 19,632 | 13,466 | 47,601 | 20,943 |
China | ||||
Revenue reporting by market and geographic location | ||||
Total Sales | 66,437 | 51,088 | 110,718 | 83,926 |
EMEA | ||||
Revenue reporting by market and geographic location | ||||
Total Sales | 21,990 | 6,908 | 30,314 | 17,254 |
Rest of World | ||||
Revenue reporting by market and geographic location | ||||
Total Sales | 23,351 | 23,660 | 41,118 | 63,840 |
Lighting, Display & Power Electronics | ||||
Revenue reporting by market and geographic location | ||||
Total Sales | 82,122 | 66,221 | 146,450 | 130,112 |
Advanced Packaging, MEMS & RF | ||||
Revenue reporting by market and geographic location | ||||
Total Sales | 13,840 | 1,836 | 27,005 | 2,635 |
Scientific & Industrial | ||||
Revenue reporting by market and geographic location | ||||
Total Sales | 17,960 | 14,082 | 31,595 | 22,567 |
Data Storage | ||||
Revenue reporting by market and geographic location | ||||
Total Sales | $ 17,488 | $ 12,983 | $ 24,701 | $ 30,649 |