Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 13, 2023 | Jul. 01, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 0-16244 | ||
Entity Registrant Name | VEECO INSTRUMENTS INC | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 11-2989601 | ||
Entity Address, Address Line One | Terminal Drive | ||
Entity Address, City or Town | Plainview | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 11803 | ||
City Area Code | 516 | ||
Local Phone Number | 677-0200 | ||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | VECO | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Public Float | $ 906,413,355 | ||
Entity Common Stock, Shares Outstanding | 51,661,429 | ||
Auditor Name | KPMG LLP | ||
Auditor Firm ID | 185 | ||
Auditor Location | Santa Clara, California | ||
Entity Central Index Key | 0000103145 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 154,925 | $ 119,747 |
Restricted cash | 547 | 725 |
Short-term investments | 147,488 | 104,181 |
Accounts receivable, net | 124,221 | 109,609 |
Contract assets | 16,507 | 18,293 |
Inventories | 206,908 | 170,858 |
Prepaid expenses and other current assets | 18,305 | 25,974 |
Total current assets | 668,901 | 549,387 |
Property, plant, and equipment, net | 107,281 | 99,743 |
Operating lease right-of-use assets | 26,467 | 28,813 |
Intangible assets, net | 23,887 | 33,905 |
Goodwill | 181,943 | 181,943 |
Deferred income taxes | 116,349 | 1,639 |
Other assets | 3,355 | 3,546 |
Total assets | 1,128,183 | 898,976 |
Current liabilities: | ||
Accounts payable | 52,049 | 44,456 |
Accrued expenses and other current liabilities | 56,031 | 79,752 |
Customer deposits and deferred revenue | 127,223 | 63,136 |
Income taxes payable | 2,432 | 1,860 |
Current portion of long-term debt | 20,169 | |
Total current liabilities | 257,904 | 189,204 |
Deferred income taxes | 1,285 | 4,792 |
Long-term debt | 254,491 | 229,438 |
Long-term operating lease liabilities | 33,581 | 32,834 |
Other liabilities | 3,098 | 5,080 |
Total liabilities | 550,359 | 461,348 |
Stockholders' equity: | ||
Preferred stock, $0.01 par value; 500,000 shares authorized; no shares issued and outstanding. | ||
Common stock, $0.01 par value; 120,000,000 shares authorized; 51,660,409 shares issued and outstanding at December 31, 2022 and 50,652,864 shares issued and outstanding at December 31, 2021 | 517 | 507 |
Additional paid-in capital | 1,078,180 | 1,116,921 |
Accumulated deficit | (501,801) | (681,283) |
Accumulated other comprehensive income | 928 | 1,483 |
Total stockholders' equity | 577,824 | 437,628 |
Total liabilities and stockholders' equity | $ 1,128,183 | $ 898,976 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
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 | 51,660,409 | 50,652,864 |
Common stock, shares outstanding | 51,660,409 | 50,652,864 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Statements of Operations | |||
Net sales | $ 646,137 | $ 583,277 | $ 454,163 |
Cost of sales | 382,989 | 341,003 | 259,863 |
Gross profit | 263,148 | 242,274 | 194,300 |
Operating expenses, net: | |||
Research and development | 103,565 | 88,680 | 78,994 |
Selling, general, and administrative | 88,952 | 84,536 | 76,251 |
Amortization of intangible assets | 10,018 | 12,280 | 15,333 |
Restructuring | 1,097 | ||
Asset impairment | 281 | ||
Other operating expense (income), net | 317 | 68 | (221) |
Total operating expenses, net | 202,852 | 185,564 | 171,735 |
Operating income | 60,296 | 56,710 | 22,565 |
Interest income | 2,199 | 2,340 | 1,551 |
Interest expense | (11,510) | (28,360) | (24,739) |
Other income (expense), net | (5,010) | (7,841) | |
Income before income taxes | 50,985 | 25,680 | (8,464) |
Income tax expense (benefit) | (115,957) | (358) | (73) |
Net income | $ 166,942 | $ 26,038 | $ (8,391) |
Income per common share: | |||
Basic (in dollars per share) | $ 3.35 | $ 0.53 | $ (0.17) |
Diluted (in dollars per share) | $ 2.71 | $ 0.49 | $ (0.17) |
Weighted average number of shares: | |||
Basic (in shares) | 49,906 | 49,073 | 48,362 |
Diluted (in shares) | 65,607 | 53,643 | 48,362 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Statements of Comprehensive Income | |||
Net income | $ 166,942 | $ 26,038 | $ (8,391) |
Available-for-sale securities: | |||
Change in net unrealized gains or losses | (514) | (311) | (53) |
Unrealized gain (loss) on available-for-sale securities | (514) | (311) | (53) |
Currency translation adjustments: | |||
Change in currency translation adjustments | 41 | 52 | (5) |
Net changes related to currency translation adjustments | (41) | (52) | 5 |
Total other comprehensive income (loss), net of tax | (555) | (363) | (48) |
Total comprehensive income | $ 166,387 | $ 25,675 | $ (8,439) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital 2025 Notes | Additional Paid-in Capital 2027 Notes | Additional Paid-in Capital Cumulative Effect, Period of Adoption, Adjustment | Additional Paid-in Capital | Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment | Accumulated Deficit | Accumulated Other Comprehensive Income | 2025 Notes | 2027 Notes | Cumulative Effect, Period of Adoption, Adjustment | Total |
Balance at the beginning of the period at Dec. 31, 2019 | $ 490 | $ 1,071,058 | $ (698,930) | $ 1,894 | $ 374,512 | |||||||
Balance (in shares) at Dec. 31, 2019 | 48,994 | |||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net income (loss) | (8,391) | (8,391) | ||||||||||
Other comprehensive income (loss), net of tax | (48) | (48) | ||||||||||
Share-based compensation expense | 12,703 | 12,703 | ||||||||||
Net issuance under employee stock plans | $ 7 | 549 | 556 | |||||||||
Net issuance under employee stock plans (in shares) | 730 | |||||||||||
Extinguishment of equity component of repurchased/exchanged 2023 Notes | (14,714) | (14,714) | ||||||||||
Equity component of Notes | $ 20,706 | $ 33,363 | $ 20,706 | $ 33,363 | ||||||||
Purchase of capped calls | (10,313) | (10,313) | ||||||||||
Balance at the end of the period at Dec. 31, 2020 | $ 497 | 1,113,352 | (707,321) | 1,846 | 408,374 | |||||||
Balance (in shares) at Dec. 31, 2020 | 49,724 | |||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net income (loss) | 26,038 | 26,038 | ||||||||||
Other comprehensive income (loss), net of tax | (363) | (363) | ||||||||||
Share-based compensation expense | 15,249 | 15,249 | ||||||||||
Net issuance under employee stock plans | $ 10 | (5,600) | (5,590) | |||||||||
Net issuance under employee stock plans (in shares) | 929 | |||||||||||
Extinguishment of equity component of repurchased/exchanged 2023 Notes | (6,080) | (6,080) | ||||||||||
Balance at the end of the period at Dec. 31, 2021 | $ 507 | $ (56,800) | 1,116,921 | $ 12,540 | (681,283) | 1,483 | $ (44,260) | 437,628 | ||||
Balance (in shares) at Dec. 31, 2021 | 50,653 | |||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net income (loss) | 166,942 | 166,942 | ||||||||||
Other comprehensive income (loss), net of tax | (555) | (555) | ||||||||||
Share-based compensation expense | 22,994 | 22,994 | ||||||||||
Net issuance under employee stock plans | $ 10 | (4,935) | (4,925) | |||||||||
Net issuance under employee stock plans (in shares) | 1,007 | |||||||||||
Balance at the end of the period at Dec. 31, 2022 | $ 517 | $ 1,078,180 | $ (501,801) | $ 928 | $ 577,824 | |||||||
Balance (in shares) at Dec. 31, 2022 | 51,660 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flows from Operating Activities | |||
Net income | $ 166,942 | $ 26,038 | $ (8,391) |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 25,645 | 26,058 | 30,697 |
Non-cash interest expense | 962 | 13,819 | 13,792 |
Deferred income taxes | (118,040) | (651) | (299) |
Share-based compensation expense | 22,994 | 15,249 | 12,703 |
Loss on extinguishment of debt | 4,029 | 7,841 | |
Asset impairment | 281 | ||
Impairment of equity investments | 980 | ||
Provision for bad debts | 140 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable and contract assets | (12,826) | (26,664) | (30,361) |
Inventories | (37,288) | (24,803) | (11,528) |
Prepaid expenses and other current assets | 7,668 | 7,621 | (2,610) |
Accounts payable and accrued expenses | (13,115) | 20,225 | 15,959 |
Customer deposits and deferred revenue | 64,087 | (4,099) | 12,424 |
Income taxes receivable and payable, net | 557 | 947 | 86 |
Other, net | 897 | 8,993 | 2,287 |
Net cash provided by (used in) operating activities | 108,483 | 67,742 | 43,021 |
Cash Flows from Investing Activities | |||
Capital expenditures | (24,604) | (40,643) | (6,802) |
Proceeds from the sale of investments | 59,738 | 330,702 | 173,530 |
Payments for purchases of investments | (104,014) | (247,256) | (248,023) |
Proceeds from held for sale assets, net of costs to sell | 1,725 | 9,503 | |
Net cash provided by (used in) investing activities | (68,880) | 44,528 | (71,792) |
Cash Flows from Financing Activities | |||
Proceeds from issuance of 2027 Notes, net of issuance costs | 120,095 | ||
Purchase of capped calls | (10,313) | ||
Repurchase of 2023 Notes | (115,604) | (81,240) | |
Debt issuance costs | (835) | ||
Proceeds (net of tax withholdings) from option exercises and employee stock purchase plan | 3,698 | 3,402 | 2,878 |
Restricted stock tax withholdings | (8,248) | (8,992) | (2,322) |
Net cash provided by (used in) financing activities | (4,550) | (122,029) | 29,098 |
Effect of exchange rate changes on cash and cash equivalents | (53) | (52) | 5 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 35,000 | (9,811) | 332 |
Cash, cash equivalents, and restricted cash - beginning of period | 120,472 | 130,283 | 129,951 |
Cash, cash equivalents, and restricted cash - end of period | 155,472 | 120,472 | 130,283 |
Supplemental Disclosure of Cash Flow Information | |||
Interest paid | 10,139 | 12,551 | 12,700 |
Income taxes paid (refunds received) | 1,434 | (139) | 329 |
Non-cash activities | |||
Capital expenditures included in accounts payable and accrued expenses | 2,285 | 9,096 | 687 |
Net transfer of inventory to property, plant and equipment | 1,235 | (63) | (1,624) |
Right-of-use assets obtained in exchange for lease obligations | $ 2,938 | $ 23,777 | $ 1,741 |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Significant Accounting Policies | |
Significant Accounting Policies | Note 1 — Significant Accounting Policies (a) Description of Business Veeco Instruments Inc. (together with its consolidated subsidiaries, “Veeco,” or the “Company”) operates in a single segment: the development, manufacture, sales, and support of semiconductor and thin film process equipment primarily sold to make electronic devices. (b) Basis of Presentation The accompanying audited Consolidated Financial Statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“GAAP”). The Company reports interim quarters on a 13 -week basis ending on the last Sunday of each period, which is determined at the start of each year. The Company’s fourth quarter always ends on the last day of the calendar year, December 31. During 2022 the interim quarters ended on April 3, July 3, and October 2, and during 2021 the interim quarters ended on April 4, July 4, and October 3. The Company reports these interim quarters as March 31, June 30, and September 30 in its interim consolidated financial statements. (c) Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, these estimates may ultimately differ from actual results. Significant items subject to such estimates and assumptions include: (i) stand-alone selling prices for the Company’s products and services; (ii) allowances for doubtful accounts; (iii) inventory obsolescence; (iv) the useful lives and expected future cash flows of property, plant, and equipment and identifiable intangible assets; (v) the fair value of the Company’s reporting unit and related goodwill; (vi) investment valuations and the valuation of derivatives, deferred tax assets, and assets acquired in business combinations; (vii) the recoverability of long-lived assets; (viii) liabilities for product warranty and legal contingencies; (ix) share-based compensation; (x) lease term and incremental borrowing rates used in determining operating lease assets and liabilities; and (xi) income tax uncertainties. (d) Principles of Consolidation The Consolidated Financial Statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. Companies acquired during each reporting period are reflected in the results of the Company effective from their respective dates of acquisition through the end of the reporting period. (e) Foreign Currencies Assets and liabilities of the Company’s foreign subsidiaries that operate using functional currencies other than the U.S. dollar are translated using the exchange rates in effect at the balance sheet date. Results of operations are translated using monthly average exchange rates. Adjustments arising from the translation of the foreign currency financial statements of the Company’s subsidiaries into U.S. dollars, including intercompany transactions of a long-term nature, are reported as currency translation adjustments in “Accumulated other comprehensive income” in the Consolidated Balance Sheets. Foreign currency transaction gains or losses are included in “Other operating expense (income), net” in the Consolidated Statements of Operations. (f) Revenue Recognition Revenue is recognized upon the transfer of control of the promised product or service to the customer in an amount that reflects the consideration the Company expects to receive in exchange for such product or service. The Company’s contracts with customers generally do not contain variable consideration. In the rare instances where variable consideration is included, the Company estimates the amount of variable consideration and determines what portion of that, if any, has a high probability of significant subsequent revenue reversal, and if so, that amount is excluded from the transaction price. The Company’s contracts with customers frequently contain multiple deliverables, such as systems, upgrades, components, spare parts, installation, maintenance, and service plans. Judgment is required to properly identify the performance obligations within a contract and to determine how the revenue should be allocated among the performance obligations. The Company also evaluates whether multiple transactions with the same customer or related parties should be considered part of a single contract 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. When there are separate units of accounting, the Company allocates revenue to each performance obligation on a relative stand-alone selling price basis. The stand-alone selling prices are determined based on the prices at which the Company separately sells the systems, upgrades, components, spare parts, installation, maintenance, and service plans. For items that are not sold separately, the Company estimates stand-alone selling prices generally using an expected cost plus margin approach. Most of the Company’s revenue is recognized at a point in time when the performance obligation is satisfied. The Company considers many facts when evaluating each of its sales arrangements to determine the timing of revenue recognition, including its contractual obligations and the nature of the customer’s post-delivery acceptance provisions. The Company’s system sales arrangements, including certain upgrades, generally include field acceptance provisions that may include functional or mechanical test procedures. For many of these arrangements, a customer source inspection of the system is performed in the Company’s facility, test data is sent to the customer documenting that the system is functioning to the agreed upon specifications prior to delivery, or other quality assurance testing is performed internally to ensure system functionality prior to shipment. 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 the Company objectively demonstrates that the criteria specified in the contractual acceptance provisions are achieved prior to delivery either through customer testing or the Company’s historical experience of its tools meeting specifications, transfer of control of the product to the customer is considered to have occurred and revenue is recognized upon system delivery since there is no substantive contingency remaining related to the acceptance provisions at that date. For new products, new applications of existing products, or for products with substantive customer acceptance provisions where the Company 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. The Company recognizes such revenue and costs upon obtaining objective evidence that the acceptance provisions can be achieved, assuming all other revenue recognition criteria have been met. In certain cases, the Company’s contracts with customers contain a billing retention, which is billed by the Company and payable by the customer when field acceptance provisions are completed. Revenue recognized in advance of the amount that has been billed is recorded as a contract asset on the Consolidated Balance Sheets. The Company recognizes revenue related to maintenance and service contracts over time based upon the respective contract term. Installation revenue is recognized over time as the installation services are performed. The Company recognizes revenue from the sales of components, spare parts, and specified service engagements at a point in time, which is typically consistent with the time of delivery in accordance with the terms of the applicable sales arrangement. The Company may receive customer deposits on system transactions. The timing of the transfer of goods or services related to the deposits is either at the discretion of the customer or expected to be within one year from the deposit receipt. As such, the Company does not adjust transaction prices for the time value of money. Incremental direct costs incurred related to the acquisition of a customer contract, such as sales commissions, are expensed as incurred since the expected performance period is one year or less. The Company has elected to treat shipping and handling costs, including those costs incurred to move, package, and prepare the Company’s products for shipment and to move the products to a customer’s designated location, as a fulfillment activity, and the Company includes such costs in “Cost of sales” in the Consolidated Statements of Operations as incurred. These costs are generally comprised of payments to third-party shippers. Taxes assessed by governmental authorities that are collected by the Company from a customer are excluded from revenue. (g) Warranty Costs The Company typically provides standard warranty coverage on its systems for one year from the date of final acceptance by providing labor and parts necessary to repair the systems during the warranty period. The Company records the estimated warranty cost when revenue is recognized on the related system. Warranty cost is included in “Cost of sales” in the Consolidated Statements of Operations. The estimated warranty cost is based on the Company’s historical experience with its systems and regional labor costs. The Company calculates the average service hours by region and parts expense per system utilizing actual service records to determine the estimated warranty charge. The Company updates its warranty estimates on a quarterly basis when the actual product performance or field expense differs from original estimates. (h) Research and Development Costs Research and development costs are expensed as incurred and include charges for the development of new technology and the transition of existing technology into new products or services. (i) Advertising Expense The cost of advertising is expensed as incurred and totaled $0.3 million, $0.3 million, and $0.4 million for the years ended December 31, 2022, 2021, and 2020, respectively. (j) Accounting for Share-based Compensation Share-based awards exchanged for employee services are accounted for under the fair value method. Accordingly, share-based compensation cost is measured at the grant date based on the estimated fair value of the award. The expense for awards is recognized over the employee’s requisite service period (generally the vesting period of the award). The Company has elected to treat awards with only service conditions and with graded vesting as one award. Consequently, the total compensation expense is recognized straight-line over the entire vesting period, so long as the compensation cost recognized at any date at least equals the portion of the grant date fair value of the award that is vested at that date. In addition to stock options, restricted share awards (“RSAs”) and restricted stock units (“RSUs”) with time-based vesting, the Company grants performance share units and awards (“PSUs” and “PSAs”) that have either performance or market conditions. Compensation cost for PSUs and PSAs with performance conditions is recognized over the requisite service period based on the timing and expected level of achievement of the performance targets. A change in the assessment of performance attainment prior to the conclusion of the performance period is recognized in the period of the change in estimate. Compensation cost for PSUs and PSAs with market conditions is recognized over the requisite service period regardless of the expected level of achievement. For all PSUs and PSAs, the number of shares issued to the employee at the conclusion of the service period may vary from the original target based upon the level of attainment of the performance or market conditions. The Company uses the Black-Scholes option-pricing model to compute the estimated fair value of option awards and purchase rights under the Employee Stock Purchase Plan. The Company uses a Monte Carlo simulation to compute the estimated fair value of awards with market conditions. The Black-Scholes model and Monte Carlo simulation include assumptions regarding dividend yields, expected volatility, expected option term, and risk-free interest rates. See Note 12, “Stock Plans,” for additional information. (k) Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rate is recognized in income in the period that includes the enactment date. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will not be realized, which is dependent upon the generation of future taxable income. (l) Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, investments, derivative financial instruments used in hedging activities, and accounts receivable. The Company invests in a variety of financial instruments and, by policy, limits the amount of credit exposure with any one financial institution or commercial issuer. Historically, the Company has not experienced any material credit losses on its investments. The Company maintains an allowance reserve for potentially uncollectible accounts for estimated losses resulting from the inability of its customers to make required payments. The Company evaluates its allowance for doubtful accounts based on a combination of factors. In circumstances where specific invoices are deemed to be uncollectible, the Company provides a specific allowance for bad debt against the amount due to reduce the net recognized receivable to the amount reasonably expected to be collected. The Company also provides allowances based on its write-off history. Finally, the Company also considers its current expectations of future economic conditions, including the impact of COVID-19, when estimating its allowance for doubtful accounts. The allowance for doubtful accounts totaled $0.7 million at both December 31, 2022 and 2021. To further mitigate the Company’s exposure to uncollectable accounts, the Company may request certain customers provide a negotiable irrevocable letter of credit drawn on a reputable financial institution. These irrevocable letters of credit are typically issued to mature between zero and 90 days from the date the documentation requirements are met, typically when a system ships or upon receipt of final acceptance from the customer. The Company, at its discretion, may monetize these letters of credit on a non-recourse basis after they become negotiable but before maturity. The fees associated with the monetization are included in “Selling, general, and administrative” in the Consolidated Statements of Operations and were immaterial for the years ended December 31, 2022, 2021, and 2020. (m) Fair Value of Financial Instruments The carrying amounts of financial instruments, including cash equivalents, accounts receivable, accounts payable, and accrued expenses reflected in the consolidated financial statements approximate fair value due to their short-term maturities. The fair value of debt for footnote disclosure purposes, including current maturities, if any, is estimated using recently quoted market prices of the instrument, or if not available, a discounted cash flow analysis based on the estimated current incremental borrowing rates for similar types of instruments. (n) Cash, Cash Equivalents, and Short-term Investments All financial instruments purchased with an original maturity of three months or less at the time of purchase are considered cash equivalents. Such items may include liquid money market funds, certificate of deposit and time deposit accounts, U.S. treasuries, government agency securities, and corporate debt. Investments that are classified as cash equivalents are carried at cost, which approximates fair value. The Company’s cash and cash equivalents includes $61.5 million and $41.7 million of cash equivalents at December 31, 2022 and 2021, respectively. A portion of the Company’s cash and cash equivalents is held by its subsidiaries throughout the world, frequently in each subsidiary’s respective functional currency, which is typically the U.S. dollar. Approximately 18% and 32% of cash and cash equivalents were maintained outside the United States at December 31, 2022 and 2021, respectively. Short-term investments consist of marketable debt securities, and are generally classified as available-for-sale for use in current operations, if required, and are 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” on the Consolidated Balance Sheets. These securities can 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 operating expense (income), net” in the Consolidated Statements of Operations. The specific identification method is used to determine the realized gains and losses on investments. Non-marketable equity securities are equity securities without readily observable market prices and are included in “Other assets” in the Consolidated Balance Sheets. Non-marketable securities are measured at cost, adjusted for changes in observable prices minus impairment. Changes in fair value and impairment charges are included in “Other income (expense), net” in the Consolidated Statements of Operations. (o) Inventories Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. Each quarter the Company assesses the valuation and recoverability of all inventories: materials (raw materials, spare parts, and service inventory); work-in-process; and finished goods. Obsolete inventory or inventory in excess of management’s estimated usage requirement is written down to its estimated net realizable value if less than cost. The Company evaluates usage requirements by analyzing historical usage, anticipated demand, alternative uses of materials, and other qualitative factors. Unanticipated changes in demand for the Company’s products may require a write down of inventory, which would be reflected in cost of sales in the period the revision is made. Inventory acquired as part of a business combination is recorded at fair value on the date of acquisition. (p) Business Combinations The Company allocates the fair value of the purchase consideration of the Company’s acquisitions to the tangible assets, intangible assets, including in-process research and development (“IPR&D”), if any, and liabilities assumed, based on estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred. (q) Goodwill and Indefinite-Lived Intangible Assets 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. Goodwill is measured as the excess of the consideration transferred over the net fair value of identifiable assets acquired and liabilities assumed. Intangible assets with indefinite useful lives are measured at their respective fair values on the acquisition date. Intangible assets related to IPR&D projects are considered to be indefinite-lived until the completion or abandonment of the associated research and development (“R&D”) efforts. If and when development is complete, the associated assets would be deemed long-lived and would then be amortized based on their respective estimated useful lives at that point in time. Goodwill and indefinite-lived intangibles are not amortized into results of operations but instead are evaluated for impairment. The Company performs the evaluation in the beginning of the fourth quarter of each year or more frequently if impairment indicators arise. In testing goodwill for impairment, the Company may first perform a qualitative assessment of whether it is more likely than not that the reporting unit’s fair value is less than its carrying amount, and, if so, the Company then quantitatively compares the fair value of the reporting unit to its carrying amount. If the fair value exceeds the carrying amount, goodwill is not impaired. If the carrying amount exceeds fair value, the Company then records an impairment loss equal to the difference, up to the carrying value of goodwill. The Company determines the fair value of its reporting unit based on a reconciliation of the fair value of the reporting unit to the Company’s adjusted market capitalization. The adjusted market capitalization is calculated by multiplying the average share price of the Company’s common stock for the last ten trading days prior to the measurement date by the number of outstanding common shares and adding a control premium. The control premium is estimated using historical transactions in similar industries. In testing indefinite-lived intangible assets for impairment, the Company may first perform a qualitative assessment of whether it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount, and, if so, the Company then quantitatively compares the fair value of the indefinite-lived intangible asset to its carrying amount. The Company determines the fair value of its indefinite-lived intangible assets using a discounted cash flow method. (r) Long-lived Assets Long-lived intangible assets consist of purchased technology, customer relationships, patents, trademarks and tradenames, and backlog and are initially recorded at fair value. Long-lived intangible assets are amortized over their estimated useful lives in a method reflecting the pattern in which the economic benefits are consumed or straight-lined if such pattern cannot be reliably determined. Property, plant, and equipment are recorded at cost. Depreciation expense is calculated based on the estimated useful lives of the assets by using the straight-line method. Amortization of leasehold improvements is recognized using the straight-line method over the shorter of the remaining lease term or the estimated useful lives of the improvements. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, a recoverability test is performed utilizing undiscounted cash flows expected to be generated by that asset or asset group compared to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models or, when available, quoted market values and third-party appraisals. (s) Leases The Company determines at contract inception if an arrangement is a lease, or contains a lease, of an identified asset for which the Company has the right to obtain substantially all of the economic benefits from its use and the right to direct its use. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term, while lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term. The implicit discount rate in the Company’s leases generally cannot readily be determined, and therefore the Company uses its incremental borrowing rate based on information available at lease commencement date in determining the present value of future payments. The Company has options to renew or terminate certain leases. These options are included in the determination of lease term when it is reasonably certain that the Company will exercise such options. The Company does not separate lease and non-lease components in determining ROU assets or lease liabilities for real estate leases. Additionally, the Company does not recognize ROU assets or lease liabilities for leases with original terms or renewals of one year or less. (t) Recently Adopted Accounting Standards The Company adopted ASU 2019-12: Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes in the second quarter of 2020, effective as of the beginning of fiscal year 2020. This ASU simplifies the accounting for income taxes by eliminating certain exceptions to the general principles and simplifying several aspects of ASC 740, Income Taxes, including, but not limited to, requirements related to the following: a) exception to the incremental approach for intraperiod tax allocation; b) the tax basis step-up in goodwill obtained in a transaction that is not a business combination; c) ownership changes in investments - changes from a subsidiary to an equity method investment; d) separate financial statements of entities not subject to tax; e) interim-period accounting for enacted changes in tax law; and f) the year-to-date loss limitation in interim-period tax accounting. The adoption did not have a material impact on the Company’s consolidated financial statements as of the date of adoption. The Company adopted ASU 2020-06: Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity on January 1, 2022, using the modified retrospective method for all financial instruments that were outstanding as of the adoption date. This standard simplifies the accounting for convertible debt instruments by removing the separation models for convertible debt with a cash conversion feature, as well as convertible instruments with a beneficial conversion feature. As a result, entities will account for a convertible debt instrument wholly as debt, unless certain other conditions are met. The elimination of these models reduces non-cash interest expense for entities that have issued a convertible instrument that was within the scope of those models before the adoption of ASU 2020-06, such as the Company’s 2023 Notes, 2025 Notes, and 2027 Notes. Additionally, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share, and precludes the use of the treasury stock method for certain debt instruments, such as the Company’s 2023 Notes, 2025 Notes, and 2027 Notes. The adoption of ASU 2020-06 resulted in the following adjustments to the Consolidated Balance Sheets: December 31, 2021 Adoption of ASU 2020-06 January 1, 2022 (in thousands) Balance Sheet line item: Long-term debt $ 229,438 $ 44,260 $ 273,698 Additional paid-in capital 1,116,921 (56,800) 1,060,121 Accumulated deficit (681,283) 12,540 (668,743) The adoption of ASU 2020-06 resulted in the following adjustments to the Company’s calculations of basic and diluted income per share for the year ended December 31, 2022: Year ended December 31, 2022 Under Under ASU 2020-06 legacy accounting Difference Income per common share: Basic income per common share $ 3.35 $ 3.15 $ 0.20 Diluted income per common share 2.71 2.91 (0.20) (u) Recent Accounting Pronouncements Not Yet Adopted The Company is evaluating other pronouncements recently issued but not yet adopted. The adoption of these pronouncements is not expected to have a material impact on our consolidated financial statements. |
Income Per Common Share
Income Per Common Share | 12 Months Ended |
Dec. 31, 2022 | |
Income Per Common Share | |
Income Per Common Share | Note 2 — Income (Loss) Per Share Basic income (loss) per share is calculated by dividing net income (loss) by the weighted average number of shares outstanding during the period. Diluted income per share is calculated by dividing net income by the weighted average number of shares used to calculate basic income per share plus the weighted average number of common share equivalents outstanding during the period. The dilutive effect of outstanding options to purchase common stock and non-participating share-based awards is considered in diluted income per 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, or would have been achieved if the reporting date was the end of the contingency period. Upon the adoption of ASU 2020-06 on January 1, 2022, the Company includes the dilutive effect of shares issuable upon conversion of its Notes in the calculation of diluted income per share using the if-converted method. Prior to the adoption of ASU 2020-06, based on the Company’s ability and intent to settle the principal amount of its convertible senior notes in cash, and the excess of the principal portion in shares of its common stock, the Company accounted for the conversion spread using the treasury stock method, and the shares issuable upon conversion of the Notes were not included in the calculation of diluted earnings per share except to the extent that the conversion value of the Notes exceeds their principal amount and if the effect would be dilutive. The computations of basic and diluted income (loss) per share for the years ended December 31, 2022, 2021, and 2020 are as follows: For the year ended December 31, 2022 2021 2020 (in thousands, except per share amounts) Numerator: Net income $ 166,942 $ 26,038 $ (8,391) Interest expense associated with convertible notes 10,832 — — Net income available to common shareholders $ 177,774 $ 26,038 $ (8,391) Denominator: Basic weighted average shares outstanding 49,906 49,073 48,362 Effect of potentially dilutive share-based awards 734 1,090 — Dilutive effect of convertible notes 14,967 3,480 — Diluted weighted average shares outstanding 65,607 53,643 48,362 Net income per common share: Basic $ 3.35 $ 0.53 $ (0.17) Diluted $ 2.71 $ 0.49 $ (0.17) Unvested participating shares excluded from basic weighted average shares outstanding since the securityholders are not obligated to fund losses — 6 20 Common share equivalents excluded from the diluted weighted average shares outstanding since the Company incurred a net loss and their effect would be antidilutive — — 947 Potentially dilutive shares excluded from the diluted calculation as their effect would be antidilutive 815 456 923 Maximum potential shares to be issued for settlement of the convertible notes excluded from the diluted calculation as their effect would be antidilutive — 8,421 17,753 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Measurements | |
Fair Value Measurements | Note 3 — Fair Value Measurements 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. The Company is required to classify certain assets and liabilities 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. The Company 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 or estimation methodologies could have a significant effect on the estimated fair value amounts. The following table presents the Company’s assets that were measured at fair value on a recurring basis at December 31, 2022 and 2021: Level 1 Level 2 Level 3 Total (in thousands) December 31, 2022 Cash equivalents Certificate of deposits and time deposits $ 61,135 $ — $ — $ 61,135 Money market cash 405 — — 405 Total $ 61,540 $ — $ — $ 61,540 Short-term investments U.S. treasuries $ 62,849 $ — $ — $ 62,849 Government agency securities — 27,366 — 27,366 Corporate debt — 41,591 — 41,591 Commercial paper — 15,682 — 15,682 Total $ 62,849 $ 84,639 $ — $ 147,488 December 31, 2021 Cash equivalents Certificate of deposits and time deposits $ 41,544 $ — $ — $ 41,544 Money market cash 121 — — 121 Total $ 41,665 $ — $ — $ 41,665 Short-term investments U.S. treasuries $ 51,095 $ — $ — $ 51,095 Government agency securities — 12,052 — 12,052 Corporate debt — 40,035 — 40,035 Commercial paper — 999 — 999 Total $ 51,095 $ 53,086 $ — $ 104,181 The Company’s investments classified as Level 1 are based on quoted prices that are available in active markets, as well as certificates of deposits and time deposits that are classified as Level 1 due to their short-term nature. The Company’s investments classified as Level 2 are valued using observable inputs to quoted market prices, benchmark yields, reported trades, broker/dealer quotes, or alternative pricing sources with reasonable levels of price transparency. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2022 | |
Investments | |
Investments | Note 4 — Investments At December 31, 2022 and 2021 the amortized cost and fair value of marketable securities, which are included in “Short-term investments” on the Consolidated Balance Sheets, were as follows: Gross Gross Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value (in thousands) December 31, 2022 U.S. treasuries $ 63,331 $ — $ (482) $ 62,849 Government agency securities 27,464 — (98) 27,366 Corporate debt 42,006 — (415) 41,591 Commercial paper 15,682 — — 15,682 Total $ 148,483 $ — $ (995) $ 147,488 December 31, 2021 U.S. treasuries $ 51,269 $ — $ (174) $ 51,095 Government agency securities 12,075 — (23) 12,052 Corporate debt 40,169 — (134) 40,035 Commercial paper 999 — — 999 Total $ 104,512 $ — $ (331) $ 104,181 Available-for-sale securities in a loss position at December 31, 2022 and 2021 were as follows: December 31, 2022 December 31, 2021 Continuous Loss Position Continuous Loss Position Continuous Loss Position for Less than 12 Months for 12 Months or More for Less than 12 Months Gross Gross Gross Estimated Unrealized Estimated Unrealized Estimated Unrealized Fair Value Losses Fair Value Losses Fair Value Losses (in thousands) U.S. treasuries $ 39,791 $ (84) $ 23,057 $ (398) $ 51,095 $ (174) Government agency securities 22,528 (86) 4,838 (12) 12,052 (23) Corporate debt 19,693 (138) 21,898 (277) 40,035 (134) Total $ 82,012 $ (308) $ 49,793 $ (687) $ 103,182 $ (331) At December 31, 2021, 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 at December 31, 2022 were as follows: December 31, 2022 Amortized Estimated Cost Fair Value (in thousands) Due in one year or less $ 145,885 $ 144,959 Due after one year through two years 2,598 2,529 Total $ 148,483 $ 147,488 Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The realized gains or losses for the years ended December 31, 2022, 2021, and 2020 were immaterial. Other Investments Veeco has an ownership interest of less than 20% in a non-marketable investment in a separate entity, with a carrying value of $2.0 million at December 31, 2022 and 2021. The Company does not exert significant influence over this entity. This equity investment does not have a readily observable market price, and therefore the Company has elected to measure this investment at cost, adjusted for changes in observable market prices minus impairment. The investment is included in “Other assets” on the Consolidated Balance Sheets. The investment is subject to periodic impairment reviews which require judgment. The analyses include assessments of the companies’ financial condition, the business outlooks for their products and technologies, their projected results and cash flows, 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. During the year ended December 31, 2021, the Company identified impairment indicators on the Company’s investment, and recorded a non-cash impairment charge of $1.0 million. This impairment charge was included in “Other income (expense), net” in the Consolidated Statement of Operations. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2022 | |
Inventories | |
Inventories | Note 5 — Inventories Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. Inventories consist of the following: December 31, December 31, 2022 2021 (in thousands) Materials $ 134,940 $ 96,027 Work-in-process 68,765 54,128 Finished goods 3,203 20,703 Total $ 206,908 $ 170,858 |
Property, Plant, and Equipment
Property, Plant, and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant, and Equipment | |
Property, Plant, and Equipment | Note 6 — Property, Plant, and Equipment Property, plant, and equipment, net, consist of the following: December 31, December 31, 2022 2021 Average Useful Life (in thousands) Land $ 5,061 $ 5,061 N/A Building and improvements 64,198 63,946 10 – 40 years Machinery and equipment (1) 155,533 145,656 3 – 10 years Leasehold improvements 54,764 45,979 3 – 17 years Gross property, plant, and equipment 279,556 260,642 Less: accumulated depreciation and amortization 172,275 160,899 Net property, plant, and equipment $ 107,281 $ 99,743 (1) Machinery and equipment also includes software, furniture, and fixtures Depreciation expense was $15.6 million, $13.8 million, and $15.4 million for the years ended December 31, 2022, 2021, and 2020, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | Note 7 — Goodwill and Intangible Assets Goodwill represents the future economic benefits arising from assets acquired in a business combination that are not individually identified and separately recognized. There were no changes in goodwill balances during the years ended December 31, 2022 or 2021, while the below table reflects the gross carrying amounts and accumulated impairments as of the respective periods: Gross carrying Accumulated amount impairment Net amount (in thousands) Balance at December 31, 2022 and 2021 $ 430,331 $ 248,388 $ 181,943 The Company performs its annual goodwill impairment test at the beginning of the fourth quarter each year. As the Company maintains a single goodwill reporting unit, it determines the fair value of its reporting unit based upon the Company’s adjusted market capitalization. The annual test performed at the beginning of the fourth quarter of fiscal 2022, 2021, and 2020 did not result in any potential impairment as the fair value of the reporting unit was determined to exceed the carrying amount of the reporting unit. The valuation of goodwill will continue to be subject to changes in the Company’s market capitalization and observable market control premiums. This analysis is sensitive to changes in the Company’s stock price and absent other qualitative factors, the Company may be required to record goodwill impairment charges in future periods if the stock price declines and remains depressed for an extended period of time. The components of purchased intangible assets were as follows: December 31, 2022 December 31, 2021 Average Accumulated Accumulated Remaining Gross Amortization Gross Amortization Amortization Carrying and Net Carrying and Net Period Amount Impairment Amount Amount Impairment Amount (in years) (in thousands) Technology 2.6 $ 327,908 $ 316,918 $ 10,990 $ 327,908 $ 310,551 $ 17,357 Customer relationships 6.3 146,465 135,415 11,050 146,465 132,970 13,495 Trademarks and tradenames 1.5 30,910 29,063 1,847 30,910 27,857 3,053 Other - 3,686 3,686 — 3,686 3,686 — Total 4.2 $ 508,969 $ 485,082 $ 23,887 $ 508,969 $ 475,064 $ 33,905 Other intangible assets primarily consist of patents, licenses, and backlog. Based on the intangible assets recorded at December 31, 2022, and assuming no subsequent additions to or impairment of the underlying assets, the remaining estimated annual amortization expense, is expected to be as follows: Amortization (in thousands) 2023 $ 8,347 2024 6,708 2025 3,136 2026 2,134 2027 1,550 Thereafter 2,012 Total $ 23,887 |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Expenses and Other Liabilities | |
Accrued Expenses and Other Liabilities | Note 8 — Accrued Expenses and Other Liabilities The components of accrued expenses and other current liabilities were as follows: December 31, December 31, 2022 2021 (in thousands) Payroll and related benefits $ 30,044 $ 35,712 Warranty 8,601 7,878 Operating lease liabilities 3,333 4,437 Interest 2,853 2,757 Professional fees 2,102 1,467 Legal settlement — 15,000 Sales, use, and other taxes 2,027 4,889 Other 7,071 7,612 Total $ 56,031 $ 79,752 Customer deposits and deferred revenue Customer deposits totaled $110.2 million and $46.9 million at December 31, 2022 and 2021, respectively, which are included in “Customer deposits and deferred revenue” in the Consolidated Balance Sheets. Deferred revenue represents amounts billed, other than deposits, in excess of the revenue that can be recognized on a particular contract at the balance sheet date. Changes in deferred revenue were as follows: (in thousands) Balance - December 31, 2021 $ 16,276 Deferral of revenue 8,081 Recognition of unearned revenue (7,367) Balance - December 31, 2022 $ 16,990 As of December 31, 2022, the Company has approximately $192.0 million of remaining performance obligations on contracts with an original estimated duration of one year or more, of which approximately 37% is expected to be recognized within one year , with the remaining amounts expected to be recognized between one to three years . The Company has elected to exclude disclosures regarding remaining performance obligations that have an original expected duration of one year or less. Other liabilities At December 31, 2022 and 2021, other liabilities included (i) asset retirement obligations of $0.7 million and $2.8 million, respectively; (ii) income tax payables of $0.4 million for both periods, and (iii) medical and dental benefits for former executives of $2.0 million and $1.8 million, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 9 — Commitments and Contingencies Warranty Changes in the Company’s product warranty reserves were as follows: December 31, 2022 2021 2020 (in thousands) Balance - beginning of the year $ 7,878 $ 5,058 $ 7,067 Warranties issued 8,304 7,102 4,626 Consumption of reserves (7,527) (5,784) (6,691) Changes in estimate (54) 1,502 56 Balance - end of the year $ 8,601 $ 7,878 $ 5,058 Minimum Lease Commitments The Company’s operating leases primarily include real estate leases for properties used for manufacturing, R&D activities, sales and service, and administration, as well as certain equipment leases. Some leases may include options to renew for a period of up to 5 years , while others may include options to terminate the lease. The weighted average remaining lease term of the Company’s operating leases as of December 31, 2022 was 12 years , and the weighted average discount rate used in determining the present value of future lease payments was 5.6% . The following table provides the maturities of lease liabilities at December 31, 2022: Operating Leases (in thousands) Payments due by period: 2023 $ 3,757 2024 4,347 2025 3,812 2026 4,012 2027 3,620 Thereafter 34,244 Total future minimum lease payments 53,792 Less: Imputed interest (16,878) Total $ 36,914 Reported as of December 31, 2022 Accrued expenses and other current liabilities $ 3,333 Long-term operating lease liabilities 33,581 Total $ 36,914 Operating lease cost for the years ended December 31, 2022, 2021, and 2020 was $7.4 million, $6.6 million, and $5.4 million, respectively. Variable lease cost was $2.0 million for the year ended December 31, 2022, and $1.7 million for the years ended December 31, 2021, and 2020. Additionally, the Company has an immaterial amount of short-term leases. Lease expense, which includes operating lease costs and variable lease costs, was $9.4 million, $8.4 million, and $7.1 million for the years ended December 31, 2022, 2021, and 2020, respectively. In addition, the Company is obligated under such leases for certain other expenses, including real estate taxes and insurance. Operating cash outflows from operating leases for the year ended December 31, 2022, 2021, and 2020 were $7.5 million, $6.6 million (excluding landlord reimbursements for leasehold improvements of $6.1 million included within “Other, net” in the Consolidated Statements of Cash Flows), and $6.9 million, respectively. Legal Proceedings On June 8, 2018, an Ultratech shareholder who received Veeco stock as part of the consideration for the Ultratech acquisition filed a purported class action complaint in the Superior Court of the State of California, County of Santa Clara, captioned Wolther v. Maheshwari et al., Case No. 18CV329690, on behalf of himself and others who purchased or acquired shares of Veeco pursuant to the registration statement and prospectus which Veeco filed with the SEC in connection with the Ultratech acquisition (the “Wolther Action”). On August 2 and August 8, 2018, two purported class action complaints substantially similar to the Wolther Action were filed on behalf of different plaintiffs in the same court as the Wolther Action. These cases were consolidated with the Wolther Action, and a consolidated complaint was filed on December 11, 2018. The consolidated complaint sought to recover damages and fees under Sections 11, 12, and 15 of the Securities Act of 1933 for, among other things, alleged false/misleading statements in the registration statement and prospectus relating to the Ultratech acquisition, relating primarily to the alleged failure to disclose delays in the advanced packaging business, increased MOCVD competition in China, and an intellectual property dispute. In October 2021, Veeco and the court-appointed class representatives signed an agreement to settle the Wolther Action on a class-wide basis for $15.0 million, subject to court approval and class members’ opportunity to object and opt-out. On June 27, 2022, the court granted final approval to the class action settlement. The settlement amount was funded by insurance carriers. The corresponding receivable and liability had been included within “Prepaid expenses and other current assets” and “Accrued expenses and other current liabilities”, respectively, in the Consolidated Balance Sheets as of December 31, 2021. On December 21, 2018, a purported Veeco stockholder filed a derivative action in the Superior Court of the State of California, County of Santa Clara, captioned Vladimir Gusinsky Revocable Trust v. Peeler, et al., Case No. 18CV339925, on behalf of nominal defendant Veeco (the “Derivative Action”). The complaint seeks to assert claims for breach of fiduciary duty, waste of corporate assets, and unjust enrichment against current and former Veeco directors premised on purported misstatements and omissions in the registration statement relating to the Ultratech acquisition. On January 25, 2021, the court granted the defendants’ demurrer without leave to amend effecting the dismissal of the case. On March 26, 2021, plaintiff filed its notice of appeal of the trial court’s order granting defendants’ demurrer without leave to amend. In April 2022, Veeco and plaintiff reached an agreement to settle the Derivative Action subject to court approval. As part of the settlement and subject to court approval, Veeco agreed to make certain revisions to its internal Disclosure Committee Charter and its director education program. After the court gave final approval in November 2022 to the Derivative Action settlement and the request for fees and costs made by plaintiff’s counsel, $0.3 million was paid to plaintiff’s counsel for fees and expenses. The amount was funded by insurance that Veeco maintains in the normal course of its business. The Company is involved in various other legal proceedings arising in the normal course of business. The Company 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. Concentrations of Credit Risk The Company depends on purchases from its ten largest customers, which accounted for 63% and 65% of net accounts receivable at December 31, 2022 and 2021, respectively. Customers who accounted for more than 10% of net accounts receivable or net sales are as follows: Accounts Receivable Net Sales December 31, For the Year Ended December 31, Customer 2022 2021 2022 2021 2020 Customer A * 14 % * 15 % * Customer B * * * 10 % * Customer C * 12 % * * * Customer D * 10 % * * * Customer E * * * * 13 % Customer F 10 % * * * * * Less than 10% of aggregate accounts receivable or net sales The Company manufactures and sells its products to companies in different geographic locations. Refer to Note 16, “Segment Reporting and Geographic Information,” for additional information. In certain instances, the Company requires deposits from its customers for a portion of the sales price in advance of shipment and performs periodic credit evaluations on its customers. Where appropriate, the Company requires letters of credit on certain non-U.S. sales arrangements. Receivables generally are due within 30 to 90 days from the date of invoice. In some geographies, receivables may be payable up to 150 days from the date of the invoice. Receivable Purchase Agreement In December 2020, the Company entered into a receivable purchase agreement with a financial institution to sell certain of its trade receivables from customers without recourse, up to $15.0 million at any point in time. Pursuant to this agreement, the Company sold $13.2 million of receivables during the year ended December 31, 2022, of which $5.4 million remained outstanding as of December 31, 2022 as defined in the receivable purchase agreement, and $9.6 million was available under the agreement for additional sales of receivables. There were no sales of receivables under this agreement during 2021. The net sale of accounts receivable under the agreement is reflected as a reduction of accounts receivable in the Company’s Consolidated Balance Sheet at the time of sale and any fees for the sale of trade receivables were not material for the periods presented. Suppliers The Company outsources certain functions to third parties, including the manufacture of several of its systems. While the Company relies on its outsourcing partners to perform their contracted functions, the Company maintains some level of internal manufacturing capability for these systems. In addition, certain of the components and sub-assemblies included in the Company’s products are obtained from a single source or a limited group of suppliers. The failure of the Company’s present outsourcing partners and suppliers to meet their contractual obligations and the Company’s inability to make alternative arrangements or resume the manufacture of these systems could have a material adverse effect on the Company’s revenues, profitability, cash flows, and relationships with its customers. The Company had deposits with its suppliers of $9.4 million and $3.9 million at December 31, 2022 and 2021, respectively, that were included in “Prepaid expenses and other current assets” on the Consolidated Balance Sheets. Purchase Commitments The Company had purchase commitments of $289.2 million at December 31, 2022, the majority of which will come due within one year. Purchase commitments are primarily for inventory used in manufacturing products, as well as equipment and project materials used to support research and development activities, and are partially offset by existing deposits with suppliers. Bank Guarantees The Company has bank guarantees and letters of credit issued by a financial institution on its behalf as needed. At December 31, 2022, outstanding bank guarantees and letters of credit totaled $8.2 million and unused bank guarantees and letters of credit of $14.1 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt | |
Debt | Note 10 — Debt Convertible Senior Notes 2023 Notes On January 10, 2017, the Company issued $345.0 million of 2.70% convertible senior unsecured notes due 2023 (the “2023 Notes”). The Company received net proceeds, after deducting underwriting discounts and fees and expenses payable by the Company, of approximately $335.8 million. The 2023 Notes bear interest at a rate of 2.70% per year, payable semiannually in arrears on January 15 and July 15 of each year, commencing on July 15, 2017. The 2023 Notes mature on January 15, 2023, unless earlier purchased by the Company, redeemed, or converted. On May 18, 2020, in connection with the completion of a private offering of $125.0 million aggregate principal amount of 3.75% convertible senior notes due 2027 described below, the Company repurchased and retired approximately $88.3 million in aggregate principal amount of its outstanding 2023 Notes, with a carrying amount of $78.1 million, for approximately $81.2 million of cash. The Company accounted for the partial settlement of the 2023 Notes as an extinguishment, and as such, recorded a loss on extinguishment of approximately $3.0 million for the year ended December 31, 2020, which is included in “Other income (expense), net” in the Consolidated Statements of Operations, as well as a reduction of additional paid-in capital of $0.1 million for the repurchase of the conversion feature. Additionally, on November 11, 2020, the Company entered into a privately negotiated exchange agreement with a holder of its outstanding 2023 Notes, under which the Company agreed to retire $125.0 million in aggregate original principal amount of the 2023 Notes, with a carrying amount of $113.1 million, in exchange for the issuance of $132.5 million in aggregate principal amount of new 3.50% convertible senior notes due 2025 described below, which had a fair value that approximated the principal amount of notes issued. The Company accounted for the partial settlement of the 2023 Notes as an extinguishment, and as such, recorded a loss on extinguishment of approximately $4.8 million for the year ended December 31, 2020, which is included in “Other income (expense), net” in the Consolidated Statements of Operations, as well as a reduction of additional paid-in capital of $14.6 million for the exchange of the conversion feature. Finally, on November 5, 2021, the Company entered into a privately negotiated note purchase agreement with a holder of its outstanding 2023 Notes, under which the Company agreed to repurchase and retire approximately $111.5 million in aggregate original principal amount of the 2023 Notes, with a carrying amount of $105.5 million, for cash consideration of approximately $115.6 million, and approximately $1.0 million of accrued and unpaid interest. The Company accounted for the partial settlement of the 2023 Notes as an extinguishment, and as such, recorded a loss on extinguishment of approximately $4.0 million for the year ended December 31, 2021, which is included in “Other income (expense), net” in the Consolidated Statements of Operations, as well as a reduction of additional paid-in capital of $6.1 million for the repurchase of the conversion feature. The 2023 Notes matured on January 15, 2023 and were paid in cash and settled by the Company at that time. 2025 Notes On November 17, 2020, as part of the privately negotiated exchange agreement described above, the Company issued $132.5 million of 3.50% convertible senior notes due 2025 (the “2025 Notes”). The 2025 Notes bear interest at a rate of 3.50% per year, payable semiannually in arrears on January 15 and July 15 of each year, commencing on July 15, 2021. The 2025 Notes mature on January 15, 2025, unless earlier purchased by the Company, redeemed, or converted. 2027 Notes On May 18, 2020, the Company completed a private offering of $125.0 million of 3.75% convertible senior notes due 2027 (the “2027 Notes”). The Company received net proceeds of approximately $121.9 million, after deducting underwriting discounts and fees and expenses payable by the Company. Additionally, the Company used approximately $10.3 million of cash to purchase capped calls, discussed below. The 2027 Notes bear interest at a rate of 3.75% per year, payable semiannually in arrears on June 1 and December 1 of each year, commencing on December 1, 2020. The 2027 Notes mature on June 1, 2027, unless earlier purchased by the Company, redeemed, or converted. The 2023 Notes, 2025 Notes, and 2027 Notes (collectively, the “Notes”) are unsecured obligations of Veeco and rank senior in right of payment to any of Veeco’s subordinated indebtedness; equal in right of payment to all of Veeco’s unsecured indebtedness that is not subordinated; effectively subordinated in right of payment to any of Veeco’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally subordinated to all indebtedness and other liabilities (including trade payables) of Veeco’s subsidiaries. The Notes are convertible into cash, shares of the Company’s common stock, or a combination thereof, at the Company’s election, upon the satisfaction of specified conditions and during certain periods as described below. The initial conversion rates are 24.9800, 41.6667, and 71.5372 shares of the Company’s common stock per $1,000 principal amount of the 2023 Notes, 2025 Notes, and 2027 Notes, respectively, representing initial effective conversion prices of $40.03, $24.00, and $13.98 per share of common stock, respectively. The conversion rates may be subject to adjustment upon the occurrence of certain specified events. Holders may convert all or any portion of their notes, in multiples of one thousand dollar principal amount, at their option at any time prior to the close of business on the business day immediately preceding October 15, 2022 with respect to the 2023 Notes, October 15, 2024 with respect to the 2025 Notes, and October 1, 2027 with respect to the 2027 Notes, only under the following circumstances: (i) During any calendar quarter (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (ii) During the five consecutive business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per one thousand dollar principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of Veeco’s common stock and the conversion rate on each such trading day; (iii) If the Company calls any or all of applicable series of the Notes for redemption at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (iv) Upon the occurrence of specified corporate events. For the calendar quarter ended December 31, 2022, the last reported sales price of common stock during the 30 consecutive trading days, based on the criteria outlined in (i) above, was greater than 130% of the conversion price of the 2027 Notes, and as such the 2027 Notes are convertible by the holders until March 31, 2023. Holders may convert their notes at any time, regardless of the foregoing circumstances, on or after October 15, 2022 with respect to the 2023 Notes, October 15, 2024 with respect to the 2025 Notes, and October 1, 2026 with respect to the 2027 Notes, until the close of business on the business day immediately preceding the respective maturity date. Accounting for the Notes after the adoption of ASU 2020-06 The Company adopted ASU 2020-06 on January 1, 2022 as further described in Note 1, “Basis of Presentation”. Following the adoption of ASU 2020-06, the Notes are recorded as a single unit within liabilities in the consolidated balance sheets as the conversion features within the Notes are not derivatives that require bifurcation and the Notes do not involve a substantial premium. Transaction costs of $9.2 million, $1.9 million, and $3.1 million incurred in connection with the issuance of the 2023 Notes, 2025 Notes, and 2027 Notes, respectively, were recorded as direct deductions from the related debt liabilities and recognized as non-cash interest expense using the effective interest method over the expected terms of the Notes. Accounting for the Notes prior to the adoption of ASU 2020-06 Upon conversion by the holders, the Company may elect to settle such conversion in shares of its common stock, cash, or a combination thereof. As a result of its cash conversion options, prior to the adoption of ASU 2020-06, the Company segregated the liability component of the instruments from the equity components. The liability components were measured by estimating the fair value of a non-convertible debt instrument that is similar in its terms to the Notes. The calculation of the fair value of the debt components required the use of Level 3 inputs, including utilization of convertible investors’ credit assumptions and high yield bond indices. Fair value was estimated through discounting future interest and principal payments, an income approach, due under the Notes at a discount rate equal to the estimated borrowing rate for similar non-convertible debt, or 7.0% , 8.0% , and 9.1% with respect to the 2023 Notes, 2025 Notes, and 2027 Notes, respectively. The excess of the aggregate face values of the Notes over the estimated fair values of the liability components of $72.5 million, $21.0 million, and $34.2 million with respect to the 2023 Notes, 2025 Notes, and 2027 Notes, respectively, were recognized as debt discounts and recorded as an increase to additional paid-in capital and were to be amortized over the expected lives of the Notes using the effective interest rate method. Amortization of the debt discounts were recognized as non-cash interest expense. The transaction costs of $9.2 million, $1.9 million, and $3.1 million incurred in connection with the issuance of the 2023 Notes, 2025 Notes, and 2027 Notes, respectively, were allocated to the liability and equity components based on their relative values. Transaction costs allocated to the liability component were being amortized using the effective interest rate method and recognized as non-cash interest expense over the expected terms of the Notes. Transaction costs allocated to the equity component of $1.9 million, $0.3 million, and $0.8 million with respect to the 2023 Notes, 2025 Notes, and 2027 Notes, respectively, reduced the value of the equity components recognized in stockholders' equity. The carrying values of the Notes are as follows: December 31, 2022 December 31, 2021 Principal Amount Unamortized transaction costs Net carrying value Principal Amount Unamortized debt discount/ transaction costs Net carrying value (in thousands) 2023 Notes $ 20,173 $ (4) $ 20,169 $ 20,173 $ (967) $ 19,206 2025 Notes 132,500 (990) 131,510 132,500 (17,302) 115,198 2027 Notes 125,000 (2,019) 122,981 125,000 (29,966) 95,034 Net carrying value $ 277,673 $ (3,013) $ 274,660 $ 277,673 $ (48,235) $ 229,438 Total interest expense related to the Notes is as follows: For the year ended December 31, 2022 2021 2020 (in thousands) Cash Interest Expense Coupon interest expense - 2023 Notes $ 545 $ 3,138 $ 7,390 Coupon interest expense - 2025 Notes 4,637 4,637 554 Coupon interest expense - 2027 Notes 4,688 4,688 2,904 Non-cash Interest Expense Amortization of debt discount/transaction costs- 2023 Notes 97 4,932 10,887 Amortization of debt discount/transaction costs- 2025 Notes 457 4,795 546 Amortization of debt discount/transaction costs- 2027 Notes 408 4,092 2,359 Total Interest Expense $ 10,832 $ 26,282 $ 24,640 The Company determined the Notes are Level 2 liabilities in the fair value hierarchy and estimated their fair values as $19.5 million, $143.6 million, and $192.0 million at December 31, 2022 for the 2023 Notes, 2025 Notes, and 2027 Notes, respectively. Capped Call Transactions In connection with the offering of the 2027 Notes, on May 13, 2020, the Company entered into privately negotiated capped call transactions (the “Capped Call Transactions”), pursuant to capped call confirmations, covering the total principal amount of the 2027 Notes for an aggregate premium of $10.3 million. The Capped Call Transactions are expected generally to reduce the potential dilution to the Company’s common stock upon any conversion of the 2027 Notes and/or offset any cash payments the Company is required to make in excess of the aggregate principal amount of converted 2027 Notes, as the case may be, with such reduction and/or offset subject to a cap based on the capped price of the Capped Call Transactions. The Capped Call Transactions exercise price is equal to the initial conversion price of the 2027 Notes, and the capped price of the Capped Call Transactions is approximately $18.46 per share and is subject to certain adjustments under the terms of the capped call confirmations. The Capped Call Transactions are separate transactions entered into by the Company with the capped call counterparties, are not part of the terms of the 2027 Notes and do not change the holders’ rights under the 2027 Notes. Holders of the 2027 Notes do not have any rights with respect to the Capped Call Transactions. The cost of the Capped Call Transactions is not expected to be tax-deductible as the Company did not elect to integrate the Capped Call Transactions into the 2027 Notes for tax purposes. The Company used a portion of the net proceeds from the offering of the 2027 Notes to pay for the Capped Call Transactions, and the cost of the Capped Call Transactions was recorded as a reduction of the Company’s additional paid-in capital in the accompanying consolidated financial statements. Revolving Credit Facility On December 16, 2021, the Company entered into a loan and security agreement providing for a senior secured revolving credit facility in an aggregate principal amount of $150 million (the “Credit Facility”), including a $15 million letter of credit sublimit. The Credit Facility is guaranteed by the Company’s direct material U.S. subsidiaries, subject to customary exceptions. Borrowings under the Credit Facility are secured by a first-priority lien on substantially all of the assets of the Company, subject to customary exceptions. The Credit Facility has a term of five years , maturing on December 16, 2026, or earlier if certain liquidity measures are not met prior to the 2025 Notes maturing. Subject to certain conditions and the receipt of commitments from the lenders, the Loan and Security Agreement allows for revolving commitments under the Credit Facility to be increased by up to $75 million. The existing lenders under the Credit Facility are entitled, but not obligated, to provide such incremental commitments. Borrowings will bear interest at a floating rate which can be, at the Company’s option, either (a) an alternate base rate plus an applicable rate ranging from 0.50% to 1.25% or (b) a SOFR rate (with a floor of 0.00%) for the specified interest period plus an applicable rate ranging from 1.50% to 2.25%, in each case, depending on the Company’s Secured Net Leverage Ratio (as defined in the Loan and Security Agreement). The Company will pay an unused commitment fee ranging from 0.25% to 0.35% based on unused capacity under the Credit Facility and the Company’s Secured Net Leverage Ratio. The Company may use the proceeds of borrowings under the Credit Facility to pay transaction fees and expenses, provide for its working capital needs and reimburse drawings under letters of credit and for other general corporate purposes. The Loan and Security Agreement contains customary affirmative covenants for transactions of this type, including, among others, the provision of financial and other information to the administrative agent, notice to the administrative agent upon the occurrence of certain material events, preservation of existence, maintenance of properties and insurance, compliance with laws, including environmental laws, the provision of additional guarantees, and an affiliate transactions covenant, subject to certain exceptions. The Loan and Security Agreement contains customary negative covenants, including, among others, restrictions on the ability to merge and consolidate with other companies, incur indebtedness, refinance our existing convertible notes, grant liens or security interests on assets, make investments, acquisitions, loans, or advances, pay dividends, and sell or otherwise transfer assets. The Loan and Security Agreement contains financial maintenance covenants that require the Borrower to maintain an Interest Coverage Ratio (as defined in the Loan and Security Agreement) of not less than 3.00 to 1.00, a Total Net Leverage Ratio (as defined in the Loan and Security Agreement) of not more than 4.50 to 1.00, and a Secured Net Leverage Ratio (as defined in the Loan and Security Agreement) of not more than 2.50 to 1.00, in each case, tested at the end of each fiscal quarter commencing with the fiscal quarter ending March 31, 2022. The Loan and Security Agreement also provides for a number of customary events of default, including, among others: payment defaults to the lenders; voluntary and involuntary bankruptcy proceedings; covenant defaults; material inaccuracies of representations and warranties; certain change of control events; material money judgments; and other customary events of default. The occurrence of an event of default could result in the acceleration of obligations and the termination of lending commitments under the Loan and Security Agreement. No amounts were outstanding under the Credit Facility as of December 31, 2022 or December 31, 2021. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity | |
Stockholders' Equity | Note 11 — Stockholders’ Equity Accumulated Other Comprehensive Income (“AOCI”) The following table presents the changes in the balances of each component of AOCI, net of tax: Unrealized Gains (Losses) Foreign on Available Currency for Sale Translation Securities Total (in thousands) Balance - December 31, 2019 $ 1,861 $ 33 $ 1,894 Other comprehensive income (loss) 5 (53) (48) Balance - December 31, 2020 1,866 (20) 1,846 Other comprehensive income (loss) (52) (311) (363) Balance - December 31, 2021 $ 1,814 $ (331) $ 1,483 Other comprehensive income (loss) (41) (514) (555) Balance - December 31, 2022 $ 1,773 $ (845) $ 928 The Company did not allocate additional tax expense (benefit) to other comprehensive income (loss) for the years ended December 31, 2021 and 2020, as the Company was in a full valuation allowance position such that a deferred tax asset related to amounts recognized in other comprehensive income was not regarded as realizable on a more-likely-than-not basis. The Company allocated an immaterial amount of additional tax benefit to other comprehensive income (loss) for the year ended December 31, 2022, as the Company is no longer in a full valuation allowance position. Preferred Stock The Board of Directors has authority under the Company’s Certificate of Incorporation to issue shares of preferred stock, par value $0.01, with voting and economic rights to be determined by the Board of Directors. As of December 31, 2022, no preferred shares have been issued. |
Stock Plans
Stock Plans | 12 Months Ended |
Dec. 31, 2022 | |
Stock Plans | |
Stock Plans | Note 12 — Stock Plans Share-based incentive awards are provided to employees under the terms of the Company’s equity incentive compensation plans (the “Plans”), which are administered by the Compensation Committee of the Board of Directors. The 2019 Plan originated as the 2010 Stock Incentive Plan and was originally approved by the Company’s shareholders in May 2010. This Plan was subsequently amended, as approved by shareholders, in 2013, 2016, 2019 (at which time the Plan was renamed the 2019 Stock Incentive Plan), and 2022 (as amended to date, the “2019 Plan”). The Company’s employees, non-employee directors, and consultants are eligible to receive awards under the 2019 Plan, which can include non-qualified stock options, incentive stock options, RSAs, RSUs, PSAs, PSUs, share appreciation rights, dividend equivalent rights, or any combination thereof. In 2013, the Board of Directors granted equity awards to certain employees under the Company’s 2013 Inducement Stock Incentive Plan (the “Inducement Plan”). The Company issued 124,500 stock option shares and 87,000 RSUs under this plan. Stock options under this plan vest over a three year period and have a 10-year term, and RSUs under this plan vest over a two or four year period. At December 31, 2013, the Inducement Plan was merged into the 2019 Plan and is considered an inactive plan with no further shares available for grant. At December 31, 2022, there are 2,000 option shares and no RSUs outstanding under the Inducement Plan. The Company is authorized to issue up to 17.8 million shares under the 2019 Plan. Option awards are granted with an exercise price equal to the closing price of the Company’s common stock on the trading day prior to the date of grant; option awards generally vest over a three year period and have a seven or ten year term. RSAs and RSUs generally vest over one to five years . Certain option and share awards provide for accelerated vesting if there is a change in control, as defined in the 2019 Plan. At December 31, 2022, there are 0.2 million option shares and 0.8 million RSUs and PSUs outstanding under the 2019 Plan. The Company is authorized to issue up to 2.25 million shares under the approved 2016 employee stock purchase plan (“ESPP”), including additional shares authorized under plan amendments approved by shareholders in 2019 and 2021. Under the ESPP, substantially all employees in the U.S. may purchase the Company’s common stock through payroll deductions at a price equal to 85 percent of the lower of the fair market value of the Company’s common stock at the beginning or end of each six-month offer period, as defined in the ESPP, and subject to certain limits. The ESPP was approved by the Company’s shareholders. Shares Reserved for Future Issuance At December 31, 2022, the Company has 6.1 million shares reserved to cover exercises of outstanding stock options, vesting of RSUs, and additional grants under the 2019 Plan. Share-Based Compensation The Company recognized share-based compensation in the following line items in the Consolidated Statements of Operations for the periods indicated: For the year ended December 31, 2022 2021 2020 (in thousands) Cost of sales $ 4,551 $ 2,373 $ 1,870 Research and development 6,682 3,850 2,900 Selling, general, and administrative 11,761 9,026 7,933 Total $ 22,994 $ 15,249 $ 12,703 The Company did not realize any tax benefits associated with share-based compensation for the years ended December 31, 2021 and 2020 due to the full valuation allowance on its U.S. deferred tax assets. See Note 15, “Income Taxes” for additional information. The Company recognized a tax benefit of approximately $4.5 million associated with share-based compensation for the year ended December 31, 2022. The Company capitalized an immaterial amount of share-based compensation into inventory for the years ended December 31, 2022, 2021, and 2020. Unrecognized share-based compensation costs at December 31, 2022 are summarized below: Unrecognized Weighted Share-Based Average Period Compensation Expected to be Costs Recognized (in thousands) (in years) Restricted stock units $ 9,468 1.9 Restricted stock awards 24,610 1.9 Performance share units 3,310 2.0 Total unrecognized share-based compensation cost $ 37,388 1.9 Stock Option Awards Stock options are awards issued to employees that entitle the holder to purchase shares of the Company’s stock at a fixed price. The following table summarizes the equity activity related to stock options: Weighted Number of Average Shares Exercise Price (in thousands) Balance - December 31, 2019 1,119 $ 34.88 Expired (389) 34.15 Balance - December 31, 2020 730 35.26 Exercised (2) 23.36 Expired (285) 40.16 Balance - December 31, 2021 443 32.15 Expired (266) 32.95 Balance - December 31, 2022 177 30.94 The following table summarizes stock option information at December 31, 2022: Options Outstanding and Exercisable Weighted Aggregate Average Weighted Intrinsic Remaining Average Range of Exercise Prices Shares Value Contractual Life Exercise Price (in thousands) (in thousands) (in years) $20.00 - $30.00 10 $ — 0.8 $ 29.21 $30.01 - $40.00 167 — 0.8 31.02 177 $ — 0.8 30.94 There were no unvested options outstanding as of December 31, 2022. The following table summarizes information on options exercised for the periods indicated: Year ended December 31, 2022 2021 2020 (in thousands) Cash received from options exercised $ — $ 37 $ — Intrinsic value of options exercised $ — $ 6 $ — RSAs, RSUs, PSAs, PSUs RSAs are stock awards issued to employees and directors that are subject to specified restrictions and a risk of forfeiture. RSUs are stock awards issued to employees that entitle the holder to receive shares of common stock as the awards vest. PSAs and PSUs are awards that result in an issuance of shares of common stock to employees if certain performance or market conditions are achieved. All of these awards typically vest over one to four years and vesting is subject to the employee's continued service with the Company and, in the case of performance awards, meeting certain performance or market conditions. The fair value of the awards is determined and fixed based on the closing price of the Company’s common stock on the trading day prior to the date of grant, or, in the case of performance awards with market conditions, fair value is determined using a Monte Carlo simulation. The following table summarizes the equity activity of non-vested restricted shares and performance shares: Weighted Average Number of Grant Date Shares Fair Value (in thousands) Balance - December 31, 2019 2,257 $ 16.20 Granted 1,054 9.53 Performance award adjustments (51) 30.94 Vested (798) 16.01 Forfeited (422) 14.87 Balance - December 31, 2020 2,040 12.73 Granted 1,031 24.26 Performance award adjustments 159 18.38 Vested (1,014) 15.50 Forfeited (133) 15.08 Balance - December 31, 2021 2,083 17.33 Granted 1,253 29.12 Performance award adjustments 85 14.03 Vested (844) 15.00 Forfeited (81) 20.18 Balance - December 31, 2022 2,496 23.83 The total fair value of shares that vested during the years ended December 31, 2022, 2021, and 2020 was $22.1 million, $22.8 million, and $9.0 million, respectively. For performance awards, the final number of shares earned will vary depending on the achievement of the actual results relative to the performance or market conditions. Each performance award is included in the table above at the grant date target share amount until the end of the performance period if not previously forfeited. The fair value of performance awards with market conditions is estimated on the date of grant using a Monte Carlo simulation. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive these awards. The weighted average fair value and the assumptions used in calculating such values during fiscal years 2022, 2021, and 2020 for performance awards with market conditions were based on estimates at the date of grant as follows: Year ended December 31, 2022 2021 2020 Weighted average fair value $ 45.28 $ 27.81 $ 10.59 Dividend yield 0 % 0 % 0 % Expected volatility factor (1) 58 % 63 % 60 % Risk-free interest rate (2) 2.13 % 0.34 % 0.54 % Expected life (in years) (3) 3.0 3.0 3.0 (1) Expected volatility is measured using historical daily price changes of the Company’s stock over the respective expected term. (2) The risk-free rate for periods within the contractual term is based on the U.S. Treasury yield curve in effect at the time of grant. (3) The expected life is the number of years the Company estimates that the awards will be outstanding prior to exercise. Employee Stock Purchase Plan For the years ended December 31, 2022, 2021, and 2020 the Company received cash proceeds of $3.7 million, $3.4 million, and $2.9 million, and issued shares of 208,140, 196,024, and 254,703, respectively, under the ESPP Plan. The weighted average estimated values of employee purchase rights as well as the weighted average assumptions that were used in calculating such values during fiscal years 2022, 2021, and 2020 were based on estimates at the date of grant as follows: Year ended December 31, 2022 2021 2020 Weighted average fair value $ 6.00 $ 5.90 $ 4.81 Dividend yield 0 % 0 % 0 % Expected volatility factor (1) 43 % 52 % 70 % Risk-free interest rate (2) 1.73 % 0.07 % 0.95 % Expected life (in years) (3) 0.5 0.5 0.5 (1) Expected volatility is measured using historical daily price changes of the Company’s stock over the respective expected term. (2) The risk-free rate for periods within the contractual term is based on the U.S. Treasury yield curve in effect at the time of grant. (3) The expected life is the number of years the Company estimates that the purchase rights will be outstanding prior to exercise. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Plans | |
Retirement Plans | Note 13 — Retirement Plans The Company maintains a defined contribution plan for the benefit of its U.S. employees. The plan is intended to be tax qualified and contains a qualified cash or deferred arrangement as described under Section 401(k) of the Internal Revenue Code. Eligible participants may elect to contribute a percentage of their base compensation, and the Company may make matching contributions, generally equal to fifty cents for every dollar employees contribute, up to three percent of the employee’s eligible compensation, as limited by current Internal Revenue Code regulations. Generally, the plan calls for vesting in the Company contributions over the initial five years of a participant’s employment. The Company provided employer contributions associated with this plan of approximately $3.0 million, $2.6 million, and $2.4 million for the years ended December 31, 2022, 2021, and 2020, respectively. |
Dispositions
Dispositions | 12 Months Ended |
Dec. 31, 2022 | |
Dispositions | |
Dispositions | Note 14 — Dispositions In 2019, the Company determined that one of its non-core product lines (the “disposal group”) met the held for sale criteria. During 2020, the Company completed the sale of this product line for approximately $11.4 million, with approximately 85% of the transaction price received upon closing, and 15% held in escrow for a period of 18 months and subsequently collected in 2021. Long-lived assets and definite-lived intangible assets were not depreciated or amortized while classified as held for sale. The sale of this disposal group did not represent a strategic shift that will have a material effect on the Company’s operations and financial results, nor is it considered a component of the Company, and as such it did not meet the criteria to be reported as discontinued operations. During 2020, the Company recorded additional impairment charges of $0.3 million related to the finalization of the sale of this disposal group. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Income Taxes | Note 15 — Income Taxes The amounts of income (loss) before income taxes attributable to domestic and foreign operations were as follows: Year ended December 31, 2022 2021 2020 (in thousands) Domestic $ 47,368 $ 23,561 $ (10,292) Foreign 3,617 2,119 1,828 Total $ 50,985 $ 25,680 $ (8,464) Significant components of the expense (benefit) for income taxes consisted of the following: Year ended December 31, 2022 2021 2020 (in thousands) Current: Federal $ — $ — $ — Foreign 1,506 183 22 State and local 577 110 204 Total current expense (benefit) for income taxes 2,083 293 226 Deferred: Federal (96,811) 119 136 Foreign (484) (507) (320) State and local (20,745) (263) (115) Total deferred expense (benefit) for income taxes (118,040) (651) (299) Total expense (benefit) for income taxes $ (115,957) $ (358) $ (73) The income tax expense (benefit) was reconciled to the tax expense computed at the U.S. federal statutory tax rate as follows: Year ended December 31, 2022 2021 2020 (in thousands) Income tax expense (benefit) at U.S. statutory rates $ 10,706 $ 5,393 $ (1,777) State taxes, net of U.S. federal impact 1,101 (607) (121) Effect of international operations (11,149) 609 (131) Research and development tax credit (6,470) (3,964) 726 Net change in valuation allowance (104,972) (2,389) 388 Change in accrual for unrecognized tax benefits 3,349 398 (6) Share-based compensation 606 1,208 2,248 Asset impairment — — 728 Partial extinguishment of 2023 Notes — (1,090) (2,292) Adoption of new accounting standard (9,295) — — Other 167 84 164 Total expense (benefit) for income taxes $ (115,957) $ (358) $ (73) Deferred income taxes reflect the effect of temporary differences between the carrying amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for tax purposes. The tax effects of the temporary differences were as follows: December 31, 2022 2021 (in thousands) Deferred tax assets: Inventory valuation $ 11,931 $ 11,822 Net operating losses 5,647 38,816 Credit carry forwards 59,988 57,810 Warranty and installation accruals 1,862 1,730 Share-based compensation 5,267 4,033 Customer deposits and deferred revenue 24,504 9,908 Operating leases 8,349 8,464 Research and experimental ("R&E") capitalization 19,071 — Other 6,553 5,880 Total deferred tax assets 143,172 138,463 Valuation allowance (11,083) (116,054) Net deferred tax assets 132,089 22,409 Deferred tax liabilities: Purchased intangible assets 8,724 6,633 Convertible Senior Notes (39) 10,018 Operating leases 5,994 6,539 Depreciation 2,346 2,372 Total deferred tax liabilities 17,025 25,562 Net deferred taxes $ 115,064 $ (3,153) The Company does not permanently reinvest its earnings from certain foreign jurisdictions and has accrued for foreign tax withholdings of $0.9 million on its unremitted earnings as of December 31, 2022. During the year ended December 31, 2022, the Company recognized a net decrease of $104.9 million of its valuation allowance. This decrease was primarily related to the reversal of valuation allowances on domestic deferred tax assets. After considering recent significant positive evidence, including a consistent pattern of earnings in the past three years, as well as forecasted future earnings, it was determined that a valuation allowance was no longer required for certain deferred tax assets primarily recorded on tax credits and net operating losses in U.S. jurisdictions. The Company’s remaining valuation allowance of approximately $11.1 million relates primarily to state and local, and certain foreign jurisdiction tax attributes for which the Company could not conclude were realizable on a more-likely-than-not basis. At December 31, 2022, the Company had U.S. federal research and development credits of $36.5 million that will expire between 2023 and 2042. The Company also has $8.7 million of foreign tax credits that expire in 2027. Additionally, the Company has state and local NOL carryforwards of approximately $59.3 million (a net deferred tax asset of $4.1 million, net of federal tax benefits and before the valuation allowance) that will expire between 2023 and 2041. Finally, the Company has state credits of $32.6 million, some of which are indefinite and others that will expire between 2024 and 2037. A roll-forward of the Company’s uncertain tax positions for all U.S. federal, state, and foreign tax jurisdictions was as follows: December 31, 2022 2021 2020 (in thousands) Balance at beginning of year $ 12,761 $ 12,363 $ 12,369 Additions for tax positions related to current year 4,180 2,642 1,217 Additions for tax positions related to prior years — 50 47 Reductions for tax positions related to prior years (731) (1,196) (1,166) Reductions due to the lapse of the statute of limitations — — — Settlements (100) (1,098) (104) Balance at end of year $ 16,110 $ 12,761 $ 12,363 If the amount of unrecognized tax benefits at December 31, 2022 were recognized, the Company’s income tax provision would decrease by $13.5 million. The gross amount of interest and penalties accrued in income tax payable in the Consolidated Balance Sheets was approximately $0.5 million and $0.4 million at December 31, 2022 and 2021, respectively. The Company, or one of its subsidiaries, files income tax returns in the United States federal jurisdiction, and various state, local, and foreign jurisdictions. All material consolidated federal income tax matters have been concluded for years through 2017 subject to subsequent utilization of NOLs generated in such years. All material state and local income tax matters have been reviewed through 2012. The majority of the Company’s foreign jurisdictions have been reviewed through 2015. The Company’s major foreign jurisdictions’ statutes of limitation remain open with respect to the tax years 2015 through 2021 for Germany, 2017 through 2021 for China, 2021 for Taiwan, and 2020 and 2021 for Singapore. The Company does not anticipate that its uncertain tax position will change significantly within the next twelve months subject to the completion of the ongoing tax audits and any resultant settlement. |
Segment Reporting and Geographi
Segment Reporting and Geographic Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting and Geographic Information | |
Segment Reporting and Geographic Information | Note 16 — Segment Reporting and Geographic Information The Company operates and measures its results in one operating segment and therefore has one reportable segment: the development, manufacture, sales, and support of semiconductor and thin film process equipment primarily sold to make electronic devices. The Company’s Chief Operating Decision Maker, the Chief Executive Officer, evaluates performance of the Company and makes decisions regarding the allocation of resources based on total Company results. Sales by end-market is as follows: For the year ended December 31, 2022 2021 2020 (in thousands) Sales by end-market Semiconductor $ 369,369 $ 247,051 $ 165,909 Compound Semiconductor 121,194 106,972 107,922 Data Storage 87,544 168,760 123,288 Scientific & Other 68,030 60,494 57,044 Total $ 646,137 $ 583,277 $ 454,163 The Company’s significant operations outside the United States include sales and service offices in China, Europe, and Rest of APAC. For geographic reporting, sales are attributed to the location in which the customer facility is located. Sales and long-lived tangible assets by geographic region are as follows: Net Sales to Unaffiliated Customers Long-lived Tangible Assets 2022 2021 2020 2022 2021 2020 (in thousands) United States $ 197,433 $ 217,209 $ 145,353 $ 106,550 $ 99,220 $ 64,967 EMEA (1) 87,837 55,129 73,124 60 94 120 China 123,703 105,998 57,589 70 67 84 Rest of APAC 235,735 204,633 177,569 601 362 100 Rest of World 1,429 308 528 — — — Total $ 646,137 $ 583,277 $ 454,163 $ 107,281 $ 99,743 $ 65,271 (1) EMEA consists of Europe, the Middle East, and Africa |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events | |
Subsequent Events | Note 17 — Subseqent Events On January 31, 2023, the Company acquired Epiluvac AB, a privately held manufacturer of chemical vapor deposition epitaxy systems that enable advanced silicon carbide applications in the electric vehicle market. employees. The purchase price for the transaction, all payable in cash, was million in performance based earn-outs. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2022 | |
Schedule II - Valuation and Qualifying Accounts | |
Schedule II - Valuation and Qualifying Accounts | Schedule II — Valuation and Qualifying Accounts Additions Charged Balance at (Credited) Charged to Balance at Beginning to Costs and Other End of Deducted from asset accounts: of Period Expenses Accounts Deductions Period (in thousands) Year ended December 31, 2022 Allowance for doubtful accounts $ 736 $ — $ — $ — $ 736 Valuation allowance in net deferred tax assets 116,054 (104,971) — — 11,083 $ 116,790 $ (104,971) $ — $ — $ 11,819 Year ended December 31, 2021 Allowance for doubtful accounts $ 736 $ — $ — $ — $ 736 Valuation allowance in net deferred tax assets 118,443 — — (2,389) 116,054 $ 119,179 $ — $ — $ (2,389) $ 116,790 Year ended December 31, 2020 Allowance for doubtful accounts $ 602 $ 140 $ — $ (6) $ 736 Valuation allowance in net deferred tax assets 130,053 513 — (12,123) 118,443 $ 130,655 $ 653 $ — $ (12,129) $ 119,179 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Significant Accounting Policies | |
Basis of Presentation | (b) Basis of Presentation The accompanying audited Consolidated Financial Statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“GAAP”). The Company reports interim quarters on a 13 -week basis ending on the last Sunday of each period, which is determined at the start of each year. The Company’s fourth quarter always ends on the last day of the calendar year, December 31. During 2022 the interim quarters ended on April 3, July 3, and October 2, and during 2021 the interim quarters ended on April 4, July 4, and October 3. The Company reports these interim quarters as March 31, June 30, and September 30 in its interim consolidated financial statements. |
Use of Estimates | (c) Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, these estimates may ultimately differ from actual results. Significant items subject to such estimates and assumptions include: (i) stand-alone selling prices for the Company’s products and services; (ii) allowances for doubtful accounts; (iii) inventory obsolescence; (iv) the useful lives and expected future cash flows of property, plant, and equipment and identifiable intangible assets; (v) the fair value of the Company’s reporting unit and related goodwill; (vi) investment valuations and the valuation of derivatives, deferred tax assets, and assets acquired in business combinations; (vii) the recoverability of long-lived assets; (viii) liabilities for product warranty and legal contingencies; (ix) share-based compensation; (x) lease term and incremental borrowing rates used in determining operating lease assets and liabilities; and (xi) income tax uncertainties. |
Principles of Consolidation | (d) Principles of Consolidation The Consolidated Financial Statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. Companies acquired during each reporting period are reflected in the results of the Company effective from their respective dates of acquisition through the end of the reporting period. |
Foreign Currencies | (e) Foreign Currencies Assets and liabilities of the Company’s foreign subsidiaries that operate using functional currencies other than the U.S. dollar are translated using the exchange rates in effect at the balance sheet date. Results of operations are translated using monthly average exchange rates. Adjustments arising from the translation of the foreign currency financial statements of the Company’s subsidiaries into U.S. dollars, including intercompany transactions of a long-term nature, are reported as currency translation adjustments in “Accumulated other comprehensive income” in the Consolidated Balance Sheets. Foreign currency transaction gains or losses are included in “Other operating expense (income), net” in the Consolidated Statements of Operations. |
Revenue Recognition | (f) Revenue Recognition Revenue is recognized upon the transfer of control of the promised product or service to the customer in an amount that reflects the consideration the Company expects to receive in exchange for such product or service. The Company’s contracts with customers generally do not contain variable consideration. In the rare instances where variable consideration is included, the Company estimates the amount of variable consideration and determines what portion of that, if any, has a high probability of significant subsequent revenue reversal, and if so, that amount is excluded from the transaction price. The Company’s contracts with customers frequently contain multiple deliverables, such as systems, upgrades, components, spare parts, installation, maintenance, and service plans. Judgment is required to properly identify the performance obligations within a contract and to determine how the revenue should be allocated among the performance obligations. The Company also evaluates whether multiple transactions with the same customer or related parties should be considered part of a single contract 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. When there are separate units of accounting, the Company allocates revenue to each performance obligation on a relative stand-alone selling price basis. The stand-alone selling prices are determined based on the prices at which the Company separately sells the systems, upgrades, components, spare parts, installation, maintenance, and service plans. For items that are not sold separately, the Company estimates stand-alone selling prices generally using an expected cost plus margin approach. Most of the Company’s revenue is recognized at a point in time when the performance obligation is satisfied. The Company considers many facts when evaluating each of its sales arrangements to determine the timing of revenue recognition, including its contractual obligations and the nature of the customer’s post-delivery acceptance provisions. The Company’s system sales arrangements, including certain upgrades, generally include field acceptance provisions that may include functional or mechanical test procedures. For many of these arrangements, a customer source inspection of the system is performed in the Company’s facility, test data is sent to the customer documenting that the system is functioning to the agreed upon specifications prior to delivery, or other quality assurance testing is performed internally to ensure system functionality prior to shipment. 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 the Company objectively demonstrates that the criteria specified in the contractual acceptance provisions are achieved prior to delivery either through customer testing or the Company’s historical experience of its tools meeting specifications, transfer of control of the product to the customer is considered to have occurred and revenue is recognized upon system delivery since there is no substantive contingency remaining related to the acceptance provisions at that date. For new products, new applications of existing products, or for products with substantive customer acceptance provisions where the Company 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. The Company recognizes such revenue and costs upon obtaining objective evidence that the acceptance provisions can be achieved, assuming all other revenue recognition criteria have been met. In certain cases, the Company’s contracts with customers contain a billing retention, which is billed by the Company and payable by the customer when field acceptance provisions are completed. Revenue recognized in advance of the amount that has been billed is recorded as a contract asset on the Consolidated Balance Sheets. The Company recognizes revenue related to maintenance and service contracts over time based upon the respective contract term. Installation revenue is recognized over time as the installation services are performed. The Company recognizes revenue from the sales of components, spare parts, and specified service engagements at a point in time, which is typically consistent with the time of delivery in accordance with the terms of the applicable sales arrangement. The Company may receive customer deposits on system transactions. The timing of the transfer of goods or services related to the deposits is either at the discretion of the customer or expected to be within one year from the deposit receipt. As such, the Company does not adjust transaction prices for the time value of money. Incremental direct costs incurred related to the acquisition of a customer contract, such as sales commissions, are expensed as incurred since the expected performance period is one year or less. The Company has elected to treat shipping and handling costs, including those costs incurred to move, package, and prepare the Company’s products for shipment and to move the products to a customer’s designated location, as a fulfillment activity, and the Company includes such costs in “Cost of sales” in the Consolidated Statements of Operations as incurred. These costs are generally comprised of payments to third-party shippers. Taxes assessed by governmental authorities that are collected by the Company from a customer are excluded from revenue. |
Warranty Costs | (g) Warranty Costs The Company typically provides standard warranty coverage on its systems for one year from the date of final acceptance by providing labor and parts necessary to repair the systems during the warranty period. The Company records the estimated warranty cost when revenue is recognized on the related system. Warranty cost is included in “Cost of sales” in the Consolidated Statements of Operations. The estimated warranty cost is based on the Company’s historical experience with its systems and regional labor costs. The Company calculates the average service hours by region and parts expense per system utilizing actual service records to determine the estimated warranty charge. The Company updates its warranty estimates on a quarterly basis when the actual product performance or field expense differs from original estimates. |
Research and Development Costs | (h) Research and Development Costs Research and development costs are expensed as incurred and include charges for the development of new technology and the transition of existing technology into new products or services. |
Advertising Expense | (i) Advertising Expense The cost of advertising is expensed as incurred and totaled $0.3 million, $0.3 million, and $0.4 million for the years ended December 31, 2022, 2021, and 2020, respectively. |
Accounting for Share-Based Compensation | (j) Accounting for Share-based Compensation Share-based awards exchanged for employee services are accounted for under the fair value method. Accordingly, share-based compensation cost is measured at the grant date based on the estimated fair value of the award. The expense for awards is recognized over the employee’s requisite service period (generally the vesting period of the award). The Company has elected to treat awards with only service conditions and with graded vesting as one award. Consequently, the total compensation expense is recognized straight-line over the entire vesting period, so long as the compensation cost recognized at any date at least equals the portion of the grant date fair value of the award that is vested at that date. In addition to stock options, restricted share awards (“RSAs”) and restricted stock units (“RSUs”) with time-based vesting, the Company grants performance share units and awards (“PSUs” and “PSAs”) that have either performance or market conditions. Compensation cost for PSUs and PSAs with performance conditions is recognized over the requisite service period based on the timing and expected level of achievement of the performance targets. A change in the assessment of performance attainment prior to the conclusion of the performance period is recognized in the period of the change in estimate. Compensation cost for PSUs and PSAs with market conditions is recognized over the requisite service period regardless of the expected level of achievement. For all PSUs and PSAs, the number of shares issued to the employee at the conclusion of the service period may vary from the original target based upon the level of attainment of the performance or market conditions. The Company uses the Black-Scholes option-pricing model to compute the estimated fair value of option awards and purchase rights under the Employee Stock Purchase Plan. The Company uses a Monte Carlo simulation to compute the estimated fair value of awards with market conditions. The Black-Scholes model and Monte Carlo simulation include assumptions regarding dividend yields, expected volatility, expected option term, and risk-free interest rates. See Note 12, “Stock Plans,” for additional information. |
Income Taxes | (k) Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rate is recognized in income in the period that includes the enactment date. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will not be realized, which is dependent upon the generation of future taxable income. |
Concentration of Credit Risk | (l) Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, investments, derivative financial instruments used in hedging activities, and accounts receivable. The Company invests in a variety of financial instruments and, by policy, limits the amount of credit exposure with any one financial institution or commercial issuer. Historically, the Company has not experienced any material credit losses on its investments. The Company maintains an allowance reserve for potentially uncollectible accounts for estimated losses resulting from the inability of its customers to make required payments. The Company evaluates its allowance for doubtful accounts based on a combination of factors. In circumstances where specific invoices are deemed to be uncollectible, the Company provides a specific allowance for bad debt against the amount due to reduce the net recognized receivable to the amount reasonably expected to be collected. The Company also provides allowances based on its write-off history. Finally, the Company also considers its current expectations of future economic conditions, including the impact of COVID-19, when estimating its allowance for doubtful accounts. The allowance for doubtful accounts totaled $0.7 million at both December 31, 2022 and 2021. To further mitigate the Company’s exposure to uncollectable accounts, the Company may request certain customers provide a negotiable irrevocable letter of credit drawn on a reputable financial institution. These irrevocable letters of credit are typically issued to mature between zero and 90 days from the date the documentation requirements are met, typically when a system ships or upon receipt of final acceptance from the customer. The Company, at its discretion, may monetize these letters of credit on a non-recourse basis after they become negotiable but before maturity. The fees associated with the monetization are included in “Selling, general, and administrative” in the Consolidated Statements of Operations and were immaterial for the years ended December 31, 2022, 2021, and 2020. |
Fair Value of Financial Instruments | (m) Fair Value of Financial Instruments The carrying amounts of financial instruments, including cash equivalents, accounts receivable, accounts payable, and accrued expenses reflected in the consolidated financial statements approximate fair value due to their short-term maturities. The fair value of debt for footnote disclosure purposes, including current maturities, if any, is estimated using recently quoted market prices of the instrument, or if not available, a discounted cash flow analysis based on the estimated current incremental borrowing rates for similar types of instruments. |
Cash, Cash Equivalents, and Short-term Investments | (n) Cash, Cash Equivalents, and Short-term Investments All financial instruments purchased with an original maturity of three months or less at the time of purchase are considered cash equivalents. Such items may include liquid money market funds, certificate of deposit and time deposit accounts, U.S. treasuries, government agency securities, and corporate debt. Investments that are classified as cash equivalents are carried at cost, which approximates fair value. The Company’s cash and cash equivalents includes $61.5 million and $41.7 million of cash equivalents at December 31, 2022 and 2021, respectively. A portion of the Company’s cash and cash equivalents is held by its subsidiaries throughout the world, frequently in each subsidiary’s respective functional currency, which is typically the U.S. dollar. Approximately 18% and 32% of cash and cash equivalents were maintained outside the United States at December 31, 2022 and 2021, respectively. Short-term investments consist of marketable debt securities, and are generally classified as available-for-sale for use in current operations, if required, and are 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” on the Consolidated Balance Sheets. These securities can 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 operating expense (income), net” in the Consolidated Statements of Operations. The specific identification method is used to determine the realized gains and losses on investments. Non-marketable equity securities are equity securities without readily observable market prices and are included in “Other assets” in the Consolidated Balance Sheets. Non-marketable securities are measured at cost, adjusted for changes in observable prices minus impairment. Changes in fair value and impairment charges are included in “Other income (expense), net” in the Consolidated Statements of Operations. |
Inventories | (o) Inventories Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. Each quarter the Company assesses the valuation and recoverability of all inventories: materials (raw materials, spare parts, and service inventory); work-in-process; and finished goods. Obsolete inventory or inventory in excess of management’s estimated usage requirement is written down to its estimated net realizable value if less than cost. The Company evaluates usage requirements by analyzing historical usage, anticipated demand, alternative uses of materials, and other qualitative factors. Unanticipated changes in demand for the Company’s products may require a write down of inventory, which would be reflected in cost of sales in the period the revision is made. Inventory acquired as part of a business combination is recorded at fair value on the date of acquisition. |
Business Combinations | (p) Business Combinations The Company allocates the fair value of the purchase consideration of the Company’s acquisitions to the tangible assets, intangible assets, including in-process research and development (“IPR&D”), if any, and liabilities assumed, based on estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred. |
Goodwill and Indefinite-Lived Intangible Assets | (q) Goodwill and Indefinite-Lived Intangible Assets 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. Goodwill is measured as the excess of the consideration transferred over the net fair value of identifiable assets acquired and liabilities assumed. Intangible assets with indefinite useful lives are measured at their respective fair values on the acquisition date. Intangible assets related to IPR&D projects are considered to be indefinite-lived until the completion or abandonment of the associated research and development (“R&D”) efforts. If and when development is complete, the associated assets would be deemed long-lived and would then be amortized based on their respective estimated useful lives at that point in time. Goodwill and indefinite-lived intangibles are not amortized into results of operations but instead are evaluated for impairment. The Company performs the evaluation in the beginning of the fourth quarter of each year or more frequently if impairment indicators arise. In testing goodwill for impairment, the Company may first perform a qualitative assessment of whether it is more likely than not that the reporting unit’s fair value is less than its carrying amount, and, if so, the Company then quantitatively compares the fair value of the reporting unit to its carrying amount. If the fair value exceeds the carrying amount, goodwill is not impaired. If the carrying amount exceeds fair value, the Company then records an impairment loss equal to the difference, up to the carrying value of goodwill. The Company determines the fair value of its reporting unit based on a reconciliation of the fair value of the reporting unit to the Company’s adjusted market capitalization. The adjusted market capitalization is calculated by multiplying the average share price of the Company’s common stock for the last ten trading days prior to the measurement date by the number of outstanding common shares and adding a control premium. The control premium is estimated using historical transactions in similar industries. In testing indefinite-lived intangible assets for impairment, the Company may first perform a qualitative assessment of whether it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount, and, if so, the Company then quantitatively compares the fair value of the indefinite-lived intangible asset to its carrying amount. The Company determines the fair value of its indefinite-lived intangible assets using a discounted cash flow method. |
Long-lived Assets | (r) Long-lived Assets Long-lived intangible assets consist of purchased technology, customer relationships, patents, trademarks and tradenames, and backlog and are initially recorded at fair value. Long-lived intangible assets are amortized over their estimated useful lives in a method reflecting the pattern in which the economic benefits are consumed or straight-lined if such pattern cannot be reliably determined. Property, plant, and equipment are recorded at cost. Depreciation expense is calculated based on the estimated useful lives of the assets by using the straight-line method. Amortization of leasehold improvements is recognized using the straight-line method over the shorter of the remaining lease term or the estimated useful lives of the improvements. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, a recoverability test is performed utilizing undiscounted cash flows expected to be generated by that asset or asset group compared to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models or, when available, quoted market values and third-party appraisals. |
Leases | (s) Leases The Company determines at contract inception if an arrangement is a lease, or contains a lease, of an identified asset for which the Company has the right to obtain substantially all of the economic benefits from its use and the right to direct its use. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term, while lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term. The implicit discount rate in the Company’s leases generally cannot readily be determined, and therefore the Company uses its incremental borrowing rate based on information available at lease commencement date in determining the present value of future payments. The Company has options to renew or terminate certain leases. These options are included in the determination of lease term when it is reasonably certain that the Company will exercise such options. The Company does not separate lease and non-lease components in determining ROU assets or lease liabilities for real estate leases. Additionally, the Company does not recognize ROU assets or lease liabilities for leases with original terms or renewals of one year or less. |
Recently Adopted Accounting Standards and Recent Accounting Pronouncements Not Yet Adopted | (t) Recently Adopted Accounting Standards The Company adopted ASU 2019-12: Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes in the second quarter of 2020, effective as of the beginning of fiscal year 2020. This ASU simplifies the accounting for income taxes by eliminating certain exceptions to the general principles and simplifying several aspects of ASC 740, Income Taxes, including, but not limited to, requirements related to the following: a) exception to the incremental approach for intraperiod tax allocation; b) the tax basis step-up in goodwill obtained in a transaction that is not a business combination; c) ownership changes in investments - changes from a subsidiary to an equity method investment; d) separate financial statements of entities not subject to tax; e) interim-period accounting for enacted changes in tax law; and f) the year-to-date loss limitation in interim-period tax accounting. The adoption did not have a material impact on the Company’s consolidated financial statements as of the date of adoption. The Company adopted ASU 2020-06: Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity on January 1, 2022, using the modified retrospective method for all financial instruments that were outstanding as of the adoption date. This standard simplifies the accounting for convertible debt instruments by removing the separation models for convertible debt with a cash conversion feature, as well as convertible instruments with a beneficial conversion feature. As a result, entities will account for a convertible debt instrument wholly as debt, unless certain other conditions are met. The elimination of these models reduces non-cash interest expense for entities that have issued a convertible instrument that was within the scope of those models before the adoption of ASU 2020-06, such as the Company’s 2023 Notes, 2025 Notes, and 2027 Notes. Additionally, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share, and precludes the use of the treasury stock method for certain debt instruments, such as the Company’s 2023 Notes, 2025 Notes, and 2027 Notes. The adoption of ASU 2020-06 resulted in the following adjustments to the Consolidated Balance Sheets: December 31, 2021 Adoption of ASU 2020-06 January 1, 2022 (in thousands) Balance Sheet line item: Long-term debt $ 229,438 $ 44,260 $ 273,698 Additional paid-in capital 1,116,921 (56,800) 1,060,121 Accumulated deficit (681,283) 12,540 (668,743) The adoption of ASU 2020-06 resulted in the following adjustments to the Company’s calculations of basic and diluted income per share for the year ended December 31, 2022: Year ended December 31, 2022 Under Under ASU 2020-06 legacy accounting Difference Income per common share: Basic income per common share $ 3.35 $ 3.15 $ 0.20 Diluted income per common share 2.71 2.91 (0.20) (u) Recent Accounting Pronouncements Not Yet Adopted The Company is evaluating other pronouncements recently issued but not yet adopted. The adoption of these pronouncements is not expected to have a material impact on our consolidated financial statements. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Significant Accounting Policies | |
Schedule of adjustments to Consolidated Balance Sheets and adjustments to calculations of basic and diluted income per share | The adoption of ASU 2020-06 resulted in the following adjustments to the Consolidated Balance Sheets: December 31, 2021 Adoption of ASU 2020-06 January 1, 2022 (in thousands) Balance Sheet line item: Long-term debt $ 229,438 $ 44,260 $ 273,698 Additional paid-in capital 1,116,921 (56,800) 1,060,121 Accumulated deficit (681,283) 12,540 (668,743) The adoption of ASU 2020-06 resulted in the following adjustments to the Company’s calculations of basic and diluted income per share for the year ended December 31, 2022: Year ended December 31, 2022 Under Under ASU 2020-06 legacy accounting Difference Income per common share: Basic income per common share $ 3.35 $ 3.15 $ 0.20 Diluted income per common share 2.71 2.91 (0.20) |
Income Per Common Share (Tables
Income Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Per Common Share | |
Schedule of computations of basic and diluted income per share | For the year ended December 31, 2022 2021 2020 (in thousands, except per share amounts) Numerator: Net income $ 166,942 $ 26,038 $ (8,391) Interest expense associated with convertible notes 10,832 — — Net income available to common shareholders $ 177,774 $ 26,038 $ (8,391) Denominator: Basic weighted average shares outstanding 49,906 49,073 48,362 Effect of potentially dilutive share-based awards 734 1,090 — Dilutive effect of convertible notes 14,967 3,480 — Diluted weighted average shares outstanding 65,607 53,643 48,362 Net income per common share: Basic $ 3.35 $ 0.53 $ (0.17) Diluted $ 2.71 $ 0.49 $ (0.17) Unvested participating shares excluded from basic weighted average shares outstanding since the securityholders are not obligated to fund losses — 6 20 Common share equivalents excluded from the diluted weighted average shares outstanding since the Company incurred a net loss and their effect would be antidilutive — — 947 Potentially dilutive shares excluded from the diluted calculation as their effect would be antidilutive 815 456 923 Maximum potential shares to be issued for settlement of the convertible notes excluded from the diluted calculation as their effect would be antidilutive — 8,421 17,753 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Measurements | |
Schedule of assets measured on a recurring basis at fair value | Level 1 Level 2 Level 3 Total (in thousands) December 31, 2022 Cash equivalents Certificate of deposits and time deposits $ 61,135 $ — $ — $ 61,135 Money market cash 405 — — 405 Total $ 61,540 $ — $ — $ 61,540 Short-term investments U.S. treasuries $ 62,849 $ — $ — $ 62,849 Government agency securities — 27,366 — 27,366 Corporate debt — 41,591 — 41,591 Commercial paper — 15,682 — 15,682 Total $ 62,849 $ 84,639 $ — $ 147,488 December 31, 2021 Cash equivalents Certificate of deposits and time deposits $ 41,544 $ — $ — $ 41,544 Money market cash 121 — — 121 Total $ 41,665 $ — $ — $ 41,665 Short-term investments U.S. treasuries $ 51,095 $ — $ — $ 51,095 Government agency securities — 12,052 — 12,052 Corporate debt — 40,035 — 40,035 Commercial paper — 999 — 999 Total $ 51,095 $ 53,086 $ — $ 104,181 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments | |
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) December 31, 2022 U.S. treasuries $ 63,331 $ — $ (482) $ 62,849 Government agency securities 27,464 — (98) 27,366 Corporate debt 42,006 — (415) 41,591 Commercial paper 15,682 — — 15,682 Total $ 148,483 $ — $ (995) $ 147,488 December 31, 2021 U.S. treasuries $ 51,269 $ — $ (174) $ 51,095 Government agency securities 12,075 — (23) 12,052 Corporate debt 40,169 — (134) 40,035 Commercial paper 999 — — 999 Total $ 104,512 $ — $ (331) $ 104,181 |
Schedule of fair value and unrealized losses of available-for-sale securities in a loss position | December 31, 2022 December 31, 2021 Continuous Loss Position Continuous Loss Position Continuous Loss Position for Less than 12 Months for 12 Months or More for Less than 12 Months Gross Gross Gross Estimated Unrealized Estimated Unrealized Estimated Unrealized Fair Value Losses Fair Value Losses Fair Value Losses (in thousands) U.S. treasuries $ 39,791 $ (84) $ 23,057 $ (398) $ 51,095 $ (174) Government agency securities 22,528 (86) 4,838 (12) 12,052 (23) Corporate debt 19,693 (138) 21,898 (277) 40,035 (134) Total $ 82,012 $ (308) $ 49,793 $ (687) $ 103,182 $ (331) |
Schedule of contractual maturities of securities classified as available-for-sale | December 31, 2022 Amortized Estimated Cost Fair Value (in thousands) Due in one year or less $ 145,885 $ 144,959 Due after one year through two years 2,598 2,529 Total $ 148,483 $ 147,488 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventories | |
Schedule of inventories | December 31, December 31, 2022 2021 (in thousands) Materials $ 134,940 $ 96,027 Work-in-process 68,765 54,128 Finished goods 3,203 20,703 Total $ 206,908 $ 170,858 |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant, and Equipment | |
Schedule of property, plant, and equipment | December 31, December 31, 2022 2021 Average Useful Life (in thousands) Land $ 5,061 $ 5,061 N/A Building and improvements 64,198 63,946 10 – 40 years Machinery and equipment (1) 155,533 145,656 3 – 10 years Leasehold improvements 54,764 45,979 3 – 17 years Gross property, plant, and equipment 279,556 260,642 Less: accumulated depreciation and amortization 172,275 160,899 Net property, plant, and equipment $ 107,281 $ 99,743 (1) Machinery and equipment also includes software, furniture, and fixtures |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets | |
Schedule of changes in goodwill | Gross carrying Accumulated amount impairment Net amount (in thousands) Balance at December 31, 2022 and 2021 $ 430,331 $ 248,388 $ 181,943 |
Schedule of intangible assets excluding goodwill | December 31, 2022 December 31, 2021 Average Accumulated Accumulated Remaining Gross Amortization Gross Amortization Amortization Carrying and Net Carrying and Net Period Amount Impairment Amount Amount Impairment Amount (in years) (in thousands) Technology 2.6 $ 327,908 $ 316,918 $ 10,990 $ 327,908 $ 310,551 $ 17,357 Customer relationships 6.3 146,465 135,415 11,050 146,465 132,970 13,495 Trademarks and tradenames 1.5 30,910 29,063 1,847 30,910 27,857 3,053 Other - 3,686 3,686 — 3,686 3,686 — Total 4.2 $ 508,969 $ 485,082 $ 23,887 $ 508,969 $ 475,064 $ 33,905 |
Schedule of estimated annual amortization expense, excluding in-process R&D for intangible assets with definite useful lives | Amortization (in thousands) 2023 $ 8,347 2024 6,708 2025 3,136 2026 2,134 2027 1,550 Thereafter 2,012 Total $ 23,887 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Expenses and Other Liabilities | |
Schedule of accrued expenses and other current liabilities | December 31, December 31, 2022 2021 (in thousands) Payroll and related benefits $ 30,044 $ 35,712 Warranty 8,601 7,878 Operating lease liabilities 3,333 4,437 Interest 2,853 2,757 Professional fees 2,102 1,467 Legal settlement — 15,000 Sales, use, and other taxes 2,027 4,889 Other 7,071 7,612 Total $ 56,031 $ 79,752 |
Schedule of changes in deferred revenue | (in thousands) Balance - December 31, 2021 $ 16,276 Deferral of revenue 8,081 Recognition of unearned revenue (7,367) Balance - December 31, 2022 $ 16,990 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies | |
Schedule of changes in product warranty reserves | December 31, 2022 2021 2020 (in thousands) Balance - beginning of the year $ 7,878 $ 5,058 $ 7,067 Warranties issued 8,304 7,102 4,626 Consumption of reserves (7,527) (5,784) (6,691) Changes in estimate (54) 1,502 56 Balance - end of the year $ 8,601 $ 7,878 $ 5,058 |
Schedule of maturities of lease liabilities 2020 | Operating Leases (in thousands) Payments due by period: 2023 $ 3,757 2024 4,347 2025 3,812 2026 4,012 2027 3,620 Thereafter 34,244 Total future minimum lease payments 53,792 Less: Imputed interest (16,878) Total $ 36,914 Reported as of December 31, 2022 Accrued expenses and other current liabilities $ 3,333 Long-term operating lease liabilities 33,581 Total $ 36,914 |
Schedule of customers who accounted for more than 10% of our aggregate accounts receivable or net sales | Accounts Receivable Net Sales December 31, For the Year Ended December 31, Customer 2022 2021 2022 2021 2020 Customer A * 14 % * 15 % * Customer B * * * 10 % * Customer C * 12 % * * * Customer D * 10 % * * * Customer E * * * * 13 % Customer F 10 % * * * * * Less than 10% of aggregate accounts receivable or net sales |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt | |
Schedule of carrying value of Convertible Senior Notes | December 31, 2022 December 31, 2021 Principal Amount Unamortized transaction costs Net carrying value Principal Amount Unamortized debt discount/ transaction costs Net carrying value (in thousands) 2023 Notes $ 20,173 $ (4) $ 20,169 $ 20,173 $ (967) $ 19,206 2025 Notes 132,500 (990) 131,510 132,500 (17,302) 115,198 2027 Notes 125,000 (2,019) 122,981 125,000 (29,966) 95,034 Net carrying value $ 277,673 $ (3,013) $ 274,660 $ 277,673 $ (48,235) $ 229,438 |
Schedule of interest expense related to Convertible Senior Notes | For the year ended December 31, 2022 2021 2020 (in thousands) Cash Interest Expense Coupon interest expense - 2023 Notes $ 545 $ 3,138 $ 7,390 Coupon interest expense - 2025 Notes 4,637 4,637 554 Coupon interest expense - 2027 Notes 4,688 4,688 2,904 Non-cash Interest Expense Amortization of debt discount/transaction costs- 2023 Notes 97 4,932 10,887 Amortization of debt discount/transaction costs- 2025 Notes 457 4,795 546 Amortization of debt discount/transaction costs- 2027 Notes 408 4,092 2,359 Total Interest Expense $ 10,832 $ 26,282 $ 24,640 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity | |
Schedule of the changes in the balances of each component of AOCI, net of tax | Unrealized Gains (Losses) Foreign on Available Currency for Sale Translation Securities Total (in thousands) Balance - December 31, 2019 $ 1,861 $ 33 $ 1,894 Other comprehensive income (loss) 5 (53) (48) Balance - December 31, 2020 1,866 (20) 1,846 Other comprehensive income (loss) (52) (311) (363) Balance - December 31, 2021 $ 1,814 $ (331) $ 1,483 Other comprehensive income (loss) (41) (514) (555) Balance - December 31, 2022 $ 1,773 $ (845) $ 928 |
Stock Plans (Tables)
Stock Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stock Plans | |
Schedule of share-based compensation expense | For the year ended December 31, 2022 2021 2020 (in thousands) Cost of sales $ 4,551 $ 2,373 $ 1,870 Research and development 6,682 3,850 2,900 Selling, general, and administrative 11,761 9,026 7,933 Total $ 22,994 $ 15,249 $ 12,703 |
Summary of unrecognized share-based compensation costs | Unrecognized Weighted Share-Based Average Period Compensation Expected to be Costs Recognized (in thousands) (in years) Restricted stock units $ 9,468 1.9 Restricted stock awards 24,610 1.9 Performance share units 3,310 2.0 Total unrecognized share-based compensation cost $ 37,388 1.9 |
Summary of stock option activity | Weighted Number of Average Shares Exercise Price (in thousands) Balance - December 31, 2019 1,119 $ 34.88 Expired (389) 34.15 Balance - December 31, 2020 730 35.26 Exercised (2) 23.36 Expired (285) 40.16 Balance - December 31, 2021 443 32.15 Expired (266) 32.95 Balance - December 31, 2022 177 30.94 |
Summary of information about stock option information | Options Outstanding and Exercisable Weighted Aggregate Average Weighted Intrinsic Remaining Average Range of Exercise Prices Shares Value Contractual Life Exercise Price (in thousands) (in thousands) (in years) $20.00 - $30.00 10 $ — 0.8 $ 29.21 $30.01 - $40.00 167 — 0.8 31.02 177 $ — 0.8 30.94 |
Summary of stock options exercised | Year ended December 31, 2022 2021 2020 (in thousands) Cash received from options exercised $ — $ 37 $ — Intrinsic value of options exercised $ — $ 6 $ — |
Summary of non-vested restricted and performance shares activity | Weighted Average Number of Grant Date Shares Fair Value (in thousands) Balance - December 31, 2019 2,257 $ 16.20 Granted 1,054 9.53 Performance award adjustments (51) 30.94 Vested (798) 16.01 Forfeited (422) 14.87 Balance - December 31, 2020 2,040 12.73 Granted 1,031 24.26 Performance award adjustments 159 18.38 Vested (1,014) 15.50 Forfeited (133) 15.08 Balance - December 31, 2021 2,083 17.33 Granted 1,253 29.12 Performance award adjustments 85 14.03 Vested (844) 15.00 Forfeited (81) 20.18 Balance - December 31, 2022 2,496 23.83 |
Summary of valuation assumptions for performance awards | Year ended December 31, 2022 2021 2020 Weighted average fair value $ 45.28 $ 27.81 $ 10.59 Dividend yield 0 % 0 % 0 % Expected volatility factor (1) 58 % 63 % 60 % Risk-free interest rate (2) 2.13 % 0.34 % 0.54 % Expected life (in years) (3) 3.0 3.0 3.0 (1) Expected volatility is measured using historical daily price changes of the Company’s stock over the respective expected term. (2) The risk-free rate for periods within the contractual term is based on the U.S. Treasury yield curve in effect at the time of grant. (3) The expected life is the number of years the Company estimates that the awards will be outstanding prior to exercise. |
Summary of valuation assumptions for employee stock purchase plan | Year ended December 31, 2022 2021 2020 Weighted average fair value $ 6.00 $ 5.90 $ 4.81 Dividend yield 0 % 0 % 0 % Expected volatility factor (1) 43 % 52 % 70 % Risk-free interest rate (2) 1.73 % 0.07 % 0.95 % Expected life (in years) (3) 0.5 0.5 0.5 (1) Expected volatility is measured using historical daily price changes of the Company’s stock over the respective expected term. (2) The risk-free rate for periods within the contractual term is based on the U.S. Treasury yield curve in effect at the time of grant. (3) The expected life is the number of years the Company estimates that the purchase rights will be outstanding prior to exercise. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Schedule of income (loss) from continuing operations before income taxes | Year ended December 31, 2022 2021 2020 (in thousands) Domestic $ 47,368 $ 23,561 $ (10,292) Foreign 3,617 2,119 1,828 Total $ 50,985 $ 25,680 $ (8,464) |
Schedule of components of the expense (benefit) for income taxes | Year ended December 31, 2022 2021 2020 (in thousands) Current: Federal $ — $ — $ — Foreign 1,506 183 22 State and local 577 110 204 Total current expense (benefit) for income taxes 2,083 293 226 Deferred: Federal (96,811) 119 136 Foreign (484) (507) (320) State and local (20,745) (263) (115) Total deferred expense (benefit) for income taxes (118,040) (651) (299) Total expense (benefit) for income taxes $ (115,957) $ (358) $ (73) |
Schedule of reconciliation of the income tax expense computed using the Federal statutory rate to actual income tax provision | Year ended December 31, 2022 2021 2020 (in thousands) Income tax expense (benefit) at U.S. statutory rates $ 10,706 $ 5,393 $ (1,777) State taxes, net of U.S. federal impact 1,101 (607) (121) Effect of international operations (11,149) 609 (131) Research and development tax credit (6,470) (3,964) 726 Net change in valuation allowance (104,972) (2,389) 388 Change in accrual for unrecognized tax benefits 3,349 398 (6) Share-based compensation 606 1,208 2,248 Asset impairment — — 728 Partial extinguishment of 2023 Notes — (1,090) (2,292) Adoption of new accounting standard (9,295) — — Other 167 84 164 Total expense (benefit) for income taxes $ (115,957) $ (358) $ (73) |
Schedule of deferred tax assets and liabilities | December 31, 2022 2021 (in thousands) Deferred tax assets: Inventory valuation $ 11,931 $ 11,822 Net operating losses 5,647 38,816 Credit carry forwards 59,988 57,810 Warranty and installation accruals 1,862 1,730 Share-based compensation 5,267 4,033 Customer deposits and deferred revenue 24,504 9,908 Operating leases 8,349 8,464 Research and experimental ("R&E") capitalization 19,071 — Other 6,553 5,880 Total deferred tax assets 143,172 138,463 Valuation allowance (11,083) (116,054) Net deferred tax assets 132,089 22,409 Deferred tax liabilities: Purchased intangible assets 8,724 6,633 Convertible Senior Notes (39) 10,018 Operating leases 5,994 6,539 Depreciation 2,346 2,372 Total deferred tax liabilities 17,025 25,562 Net deferred taxes $ 115,064 $ (3,153) |
Schedule of reconciliation of beginning and ending amount of uncertain tax positions | December 31, 2022 2021 2020 (in thousands) Balance at beginning of year $ 12,761 $ 12,363 $ 12,369 Additions for tax positions related to current year 4,180 2,642 1,217 Additions for tax positions related to prior years — 50 47 Reductions for tax positions related to prior years (731) (1,196) (1,166) Reductions due to the lapse of the statute of limitations — — — Settlements (100) (1,098) (104) Balance at end of year $ 16,110 $ 12,761 $ 12,363 |
Segment Reporting and Geograp_2
Segment Reporting and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting and Geographic Information | |
Schedule of sales by end-market | For the year ended December 31, 2022 2021 2020 (in thousands) Sales by end-market Semiconductor $ 369,369 $ 247,051 $ 165,909 Compound Semiconductor 121,194 106,972 107,922 Data Storage 87,544 168,760 123,288 Scientific & Other 68,030 60,494 57,044 Total $ 646,137 $ 583,277 $ 454,163 |
Schedule of sales by geographic region | Net Sales to Unaffiliated Customers Long-lived Tangible Assets 2022 2021 2020 2022 2021 2020 (in thousands) United States $ 197,433 $ 217,209 $ 145,353 $ 106,550 $ 99,220 $ 64,967 EMEA (1) 87,837 55,129 73,124 60 94 120 China 123,703 105,998 57,589 70 67 84 Rest of APAC 235,735 204,633 177,569 601 362 100 Rest of World 1,429 308 528 — — — Total $ 646,137 $ 583,277 $ 454,163 $ 107,281 $ 99,743 $ 65,271 (1) EMEA consists of Europe, the Middle East, and Africa |
Significant Accounting Polici_4
Significant Accounting Policies - Description of Business and Basis of Presentation (Details) - segment | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2022 | |
Significant Accounting Policies | |||||
Number of operating segments | 1 | ||||
Fiscal period duration (in days) | 91 days | 91 days | 91 days | 91 days |
Significant Accounting Polici_5
Significant Accounting Policies - Revenue Recognition (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Significant Accounting Policies | |
Revenue, practical expedient, incremental cost of obtaining contract | true |
Significant Accounting Polici_6
Significant Accounting Policies - Warranty Costs (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Significant Accounting Policies | |
Warranty period | 1 year |
Significant Accounting Polici_7
Significant Accounting Policies - Advertising Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Significant Accounting Policies | |||
Advertising expense | $ 0.3 | $ 0.3 | $ 0.4 |
Significant Accounting Polici_8
Significant Accounting Policies - Accounting for Share-Based Compensation (Details) | Dec. 31, 2022 item |
Significant Accounting Policies | |
Number of awards with which entity has elected to treat awards with only service conditions and with graded vesting | 1 |
Significant Accounting Polici_9
Significant Accounting Policies - Concentration of Credit Risk (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Significant Accounting Policies | ||
Allowance for doubtful accounts receivable | $ 0.7 | $ 0.7 |
Maturity period of irrevocable letters of credit, minimum | 0 days | |
Maturity period of irrevocable letters of credit, maximum | 90 days |
Significant Accounting Polic_10
Significant Accounting Policies - Cash, Cash Equivalents, and Short-term Investments (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Significant Accounting Policies | ||
Cash equivalents | $ 61.5 | $ 41.7 |
Cash and cash equivalents maintained outside the United States (as a percent) | 18% | 32% |
Significant Accounting Polic_11
Significant Accounting Policies - Goodwill and Indefinite-Lived Intangibles (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Significant Accounting Policies | |
Number of trading days used in adjusted market capitalization calculation | 10 days |
Significant Accounting Polic_12
Significant Accounting Policies - Recently Adopted Accounting Standards (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Jan. 01, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Apr. 01, 2020 | |
Balance Sheet line item: | |||||
Long-term debt | $ 254,491 | $ 229,438 | |||
Additional paid-in capital | 1,078,180 | 1,116,921 | |||
Accumulated deficit | $ (501,801) | $ (681,283) | |||
Income per common share: | |||||
Basic income per common share (in dollars per share) | $ 3.35 | $ 0.53 | $ (0.17) | ||
Diluted earnings per share (in dollars per share) | 2.71 | $ 0.49 | $ (0.17) | ||
ASU 2019-12, Simplifying the Accounting for Income Taxes | |||||
Accounting Changes | |||||
Change in Accounting Principle, Accounting Standards Update, Adopted | true | ||||
ASU 2020-06: Debt | |||||
Accounting Changes | |||||
Change in Accounting Principle, Accounting Standards Update, Adopted | true | ||||
Change in Accounting Principle, Accounting Standards Update, Transition Option Elected | us-gaap:AccountingStandardsUpdate201602CumulativeEffectPeriodOfAdoptionMember | ||||
ASU 2020-06: Debt | Cumulative Effect, Period of Adoption, Adjustment | |||||
Balance Sheet line item: | |||||
Long-term debt | $ 44,260 | ||||
Additional paid-in capital | (56,800) | ||||
Accumulated deficit | 12,540 | ||||
ASU 2020-06: Debt | Cumulative Effect, Period of Adoption, Adjusted Balance | |||||
Balance Sheet line item: | |||||
Long-term debt | 273,698 | ||||
Additional paid-in capital | 1,060,121 | ||||
Accumulated deficit | $ (668,743) | ||||
Income per common share: | |||||
Basic income per common share (in dollars per share) | 3.35 | ||||
Diluted earnings per share (in dollars per share) | 2.71 | ||||
Under legacy accounting | |||||
Income per common share: | |||||
Basic income per common share (in dollars per share) | 3.15 | ||||
Diluted earnings per share (in dollars per share) | 2.91 | ||||
Difference between adoption of ASU 2020-06 and legacy accounting | ASU 2020-06: Debt | |||||
Income per common share: | |||||
Basic income per common share (in dollars per share) | 0.20 | ||||
Diluted earnings per share (in dollars per share) | $ (0.20) |
Income Per Common Share - Basic
Income Per Common Share - Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||
Net income | $ 166,942 | $ 26,038 | $ (8,391) |
Interest expense associated with convertible notes | 10,832 | ||
Net income available to common shareholders | $ 177,774 | $ 26,038 | $ (8,391) |
Denominator: | |||
Basic weighted average shares outstanding | 49,906 | 49,073 | 48,362 |
Effect of potentially dilutive share-based awards | 734 | 1,090 | |
Dilutive effect of convertible notes | 14,967 | 3,480 | |
Diluted weighted average shares outstanding | 65,607 | 53,643 | 48,362 |
Net income (loss) per common share: | |||
Basic (in dollars per share) | $ 3.35 | $ 0.53 | $ (0.17) |
Diluted (in dollars per share) | $ 2.71 | $ 0.49 | $ (0.17) |
Income Per Common Share - Share
Income Per Common Share - Shares Excluded from EPS (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Basic income (loss) per share | |||
Unvested participating shares excluded from basic weighted average shares outstanding since the securityholders are not obligated to fund losses | 6 | 20 | |
Common share equivalents | |||
Diluted income (loss) per share | |||
Securities excluded from the diluted calculation as their effect would be antidilutive | 947 | ||
Potentially dilutive shares | |||
Diluted income (loss) per share | |||
Securities excluded from the diluted calculation as their effect would be antidilutive | 815 | 456 | 923 |
Convertible Notes | |||
Diluted income (loss) per share | |||
Securities excluded from the diluted calculation as their effect would be antidilutive | 8,421 | 17,753 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Measured on a recurring basis - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Cash equivalents | ||
Total Cash equivalents | $ 61,540 | $ 41,665 |
Short-term investments | ||
Total Short-term investments | 147,488 | 104,181 |
U.S. treasuries | ||
Short-term investments | ||
Total Short-term investments | 62,849 | 51,095 |
Government agency securities, Short-term investments | ||
Short-term investments | ||
Total Short-term investments | 27,366 | 12,052 |
Corporate debt | ||
Short-term investments | ||
Total Short-term investments | 41,591 | 40,035 |
Commercial paper | ||
Short-term investments | ||
Total Short-term investments | 15,682 | 999 |
Certificate of deposits and time deposits | ||
Cash equivalents | ||
Total Cash equivalents | 61,135 | 41,544 |
Money market cash | ||
Cash equivalents | ||
Total Cash equivalents | 405 | 121 |
Level 1 | ||
Cash equivalents | ||
Total Cash equivalents | 61,540 | 41,665 |
Short-term investments | ||
Total Short-term investments | 62,849 | 51,095 |
Level 1 | U.S. treasuries | ||
Short-term investments | ||
Total Short-term investments | 62,849 | 51,095 |
Level 1 | Certificate of deposits and time deposits | ||
Cash equivalents | ||
Total Cash equivalents | 61,135 | 41,544 |
Level 1 | Money market cash | ||
Cash equivalents | ||
Total Cash equivalents | 405 | 121 |
Level 2 | ||
Short-term investments | ||
Total Short-term investments | 84,639 | 53,086 |
Level 2 | Government agency securities, Short-term investments | ||
Short-term investments | ||
Total Short-term investments | 27,366 | 12,052 |
Level 2 | Corporate debt | ||
Short-term investments | ||
Total Short-term investments | 41,591 | 40,035 |
Level 2 | Commercial paper | ||
Short-term investments | ||
Total Short-term investments | $ 15,682 | $ 999 |
Investments - Available-For-Sal
Investments - Available-For-Sale Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Total available-for-sale securities | ||
Amortized Cost | $ 148,483 | $ 104,512 |
Gross Unrealized Losses | (995) | (331) |
Estimated Fair Value | 147,488 | 104,181 |
Debt Securities, Available-for-Sale, Unrealized Loss Position [Abstract] | ||
Investments, Continuous loss position for less than 12 months, Estimated Fair Value | 82,012 | 103,182 |
Investments, Continuous loss position for less than 12 months, Gross Unrealized Losses | (308) | (331) |
Investments, Continuous loss position for 12 months or more, Estimated Fair Value | 49,793 | 0 |
Investments, Continuous loss position for 12 months or more, Gross Unrealized Losses | (687) | |
Contractual maturities - Amortized Cost | ||
Amortized Cost, Due in one year or less | 145,885 | |
Amortized Cost, Due after one year through two years | 2,598 | |
Amortized Cost | 148,483 | 104,512 |
Contractual maturities - Estimated Fair Value | ||
Estimated Fair Value, Due in one year or less | 144,959 | |
Estimated Fair Value, Due after one year through two years | 2,529 | |
Available-for-sale Securities, Debt Securities, Total | 147,488 | 104,181 |
U.S. treasuries | ||
Total available-for-sale securities | ||
Amortized Cost | 63,331 | 51,269 |
Gross Unrealized Losses | (482) | (174) |
Estimated Fair Value | 62,849 | 51,095 |
Debt Securities, Available-for-Sale, Unrealized Loss Position [Abstract] | ||
Investments, Continuous loss position for less than 12 months, Estimated Fair Value | 39,791 | 51,095 |
Investments, Continuous loss position for less than 12 months, Gross Unrealized Losses | (84) | (174) |
Investments, Continuous loss position for 12 months or more, Estimated Fair Value | 23,057 | |
Investments, Continuous loss position for 12 months or more, Gross Unrealized Losses | (398) | |
Contractual maturities - Amortized Cost | ||
Amortized Cost | 63,331 | 51,269 |
Contractual maturities - Estimated Fair Value | ||
Available-for-sale Securities, Debt Securities, Total | 62,849 | 51,095 |
Government agency securities, Short-term investments | ||
Total available-for-sale securities | ||
Amortized Cost | 27,464 | 12,075 |
Gross Unrealized Losses | (98) | (23) |
Estimated Fair Value | 27,366 | 12,052 |
Debt Securities, Available-for-Sale, Unrealized Loss Position [Abstract] | ||
Investments, Continuous loss position for less than 12 months, Estimated Fair Value | 22,528 | 12,052 |
Investments, Continuous loss position for less than 12 months, Gross Unrealized Losses | (86) | (23) |
Investments, Continuous loss position for 12 months or more, Estimated Fair Value | 4,838 | |
Investments, Continuous loss position for 12 months or more, Gross Unrealized Losses | (12) | |
Contractual maturities - Amortized Cost | ||
Amortized Cost | 27,464 | 12,075 |
Contractual maturities - Estimated Fair Value | ||
Available-for-sale Securities, Debt Securities, Total | 27,366 | 12,052 |
Corporate debt | ||
Total available-for-sale securities | ||
Amortized Cost | 42,006 | 40,169 |
Gross Unrealized Losses | (415) | (134) |
Estimated Fair Value | 41,591 | 40,035 |
Debt Securities, Available-for-Sale, Unrealized Loss Position [Abstract] | ||
Investments, Continuous loss position for less than 12 months, Estimated Fair Value | 19,693 | 40,035 |
Investments, Continuous loss position for less than 12 months, Gross Unrealized Losses | (138) | (134) |
Investments, Continuous loss position for 12 months or more, Estimated Fair Value | 21,898 | |
Investments, Continuous loss position for 12 months or more, Gross Unrealized Losses | (277) | |
Contractual maturities - Amortized Cost | ||
Amortized Cost | 42,006 | 40,169 |
Contractual maturities - Estimated Fair Value | ||
Available-for-sale Securities, Debt Securities, Total | 41,591 | 40,035 |
Commercial paper | ||
Total available-for-sale securities | ||
Amortized Cost | 15,682 | 999 |
Estimated Fair Value | 15,682 | 999 |
Contractual maturities - Amortized Cost | ||
Amortized Cost | 15,682 | 999 |
Contractual maturities - Estimated Fair Value | ||
Available-for-sale Securities, Debt Securities, Total | $ 15,682 | $ 999 |
Investments - Other Investment
Investments - Other Investment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2022 | |
Other Investment | ||
Impairment of equity investments | $ 980 | |
Separate non-marketable investment | ||
Other Investment | ||
Carrying value of investment | 2,000 | $ 2,000 |
Separate non-marketable investment | Other income (expense), net | ||
Other Investment | ||
Impairment of equity investments | $ 1,000 | |
Separate non-marketable investment | Maximum | ||
Other Investment | ||
Percentage ownership of cost method investee | 20% | 20% |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Inventories | ||
Materials | $ 134,940 | $ 96,027 |
Work-in-process | 68,765 | 54,128 |
Finished goods | 3,203 | 20,703 |
Total | $ 206,908 | $ 170,858 |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment - Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, plant, and equipment | |||
Gross property, plant and equipment | $ 279,556 | $ 260,642 | |
Less: accumulated depreciation and amortization | 172,275 | 160,899 | |
Net property, plant, and equipment | 107,281 | 99,743 | $ 65,271 |
Depreciation expense | 15,600 | 13,800 | $ 15,400 |
Land | |||
Property, plant, and equipment | |||
Gross property, plant and equipment | 5,061 | 5,061 | |
Building and improvements | |||
Property, plant, and equipment | |||
Gross property, plant and equipment | $ 64,198 | $ 63,946 | |
Building and improvements | Minimum | |||
Property, plant, and equipment | |||
Average Useful Life | 10 years | 10 years | |
Building and improvements | Maximum | |||
Property, plant, and equipment | |||
Average Useful Life | 40 years | 40 years | |
Machinery and equipment | |||
Property, plant, and equipment | |||
Gross property, plant and equipment | $ 155,533 | $ 145,656 | |
Machinery and equipment | Minimum | |||
Property, plant, and equipment | |||
Average Useful Life | 3 years | 3 years | |
Machinery and equipment | Maximum | |||
Property, plant, and equipment | |||
Average Useful Life | 10 years | 10 years | |
Leaseholds improvements | |||
Property, plant, and equipment | |||
Gross property, plant and equipment | $ 54,764 | $ 45,979 | |
Leaseholds improvements | Minimum | |||
Property, plant, and equipment | |||
Average Useful Life | 3 years | 3 years | |
Leaseholds improvements | Maximum | |||
Property, plant, and equipment | |||
Average Useful Life | 17 years | 17 years |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill | ||
Change in goodwill | $ 0 | $ 0 |
Gross carrying amount | 430,331 | 430,331 |
Accumulated impairment | 248,388 | 248,388 |
Net amount | $ 181,943 | $ 181,943 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Intangible assets | ||
Average Remaining Amortization Period | 4 years 2 months 12 days | |
Gross Carrying Amount, Intangible assets | $ 508,969 | $ 508,969 |
Accumulated Amortization and Impairment, Intangible assets | 485,082 | 475,064 |
Total Net Intangible Assets | $ 23,887 | 33,905 |
Technology | ||
Intangible assets | ||
Average Remaining Amortization Period | 2 years 7 months 6 days | |
Gross Carrying Amount, Intangible assets | $ 327,908 | 327,908 |
Accumulated Amortization and Impairment, Intangible assets | 316,918 | 310,551 |
Total Net Intangible Assets | $ 10,990 | 17,357 |
Customer relationship | ||
Intangible assets | ||
Average Remaining Amortization Period | 6 years 3 months 18 days | |
Gross Carrying Amount, Intangible assets | $ 146,465 | 146,465 |
Accumulated Amortization and Impairment, Intangible assets | 135,415 | 132,970 |
Total Net Intangible Assets | $ 11,050 | 13,495 |
Trademarks and tradenames | ||
Intangible assets | ||
Average Remaining Amortization Period | 1 year 6 months | |
Gross Carrying Amount, Intangible assets | $ 30,910 | 30,910 |
Accumulated Amortization and Impairment, Intangible assets | 29,063 | 27,857 |
Total Net Intangible Assets | 1,847 | 3,053 |
Other Intangible Assets | ||
Intangible assets | ||
Gross Carrying Amount, Intangible assets | 3,686 | 3,686 |
Accumulated Amortization and Impairment, Intangible assets | $ 3,686 | $ 3,686 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Estimated aggregate amortization expense | ||
2023 | $ 8,347 | |
2024 | 6,708 | |
2025 | 3,136 | |
2026 | 2,134 | |
2027 | 1,550 | |
Thereafter | 2,012 | |
Total Net Intangible Assets | $ 23,887 | $ 33,905 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities - Components (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued expenses and other current liabilities | ||
Payroll and related benefits | $ 30,044 | $ 35,712 |
Warranty | 8,601 | 7,878 |
Operating lease liabilities | 3,333 | 4,437 |
Interest | 2,853 | 2,757 |
Professional fees | 2,102 | 1,467 |
Legal settlement | 15,000 | |
Sales, use, and other taxes | 2,027 | 4,889 |
Other | 7,071 | 7,612 |
Total Accrued and Other Liabilities, Current | $ 56,031 | $ 79,752 |
Operating Lease, Liability, Current, Statement of Financial Position | Total Accrued and Other Liabilities, Current | Total Accrued and Other Liabilities, Current |
Accrued Expenses and Other Li_4
Accrued Expenses and Other Liabilities - Customer deposits and deferred revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Customer deposits and deferred revenue | ||
Customer deposits and deferred revenue | $ 110,200 | $ 46,900 |
Changes in deferred revenue | ||
Beginning balance | 16,276 | |
Deferral of revenue | 8,081 | |
Recognition of previously deferred revenue | (7,367) | |
Ending balance | $ 16,990 |
Accrued Expenses and Other Li_5
Accrued Expenses and Other Liabilities - Performance Obligation Amount (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Accrued Expenses and Other Liabilities | |
Remaining performance obligations | $ 192 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Performance obligations | |
Percentage of remaining performance obligation expected to be recognized | 37% |
Accrued Expenses and Other Li_6
Accrued Expenses and Other Liabilities - Performance Obligation Timing (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Expenses and Other Liabilities | |
Revenue, Practical Expedient, Remaining Performance Obligation | true |
Minimum | |
Performance obligations | |
Remaining performance obligations, expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Performance obligations | |
Remaining performance obligations, expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Minimum | |
Performance obligations | |
Remaining performance obligations, expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Maximum | |
Performance obligations | |
Remaining performance obligations, expected timing of satisfaction | 3 years |
Accrued Expenses and Other Li_7
Accrued Expenses and Other Liabilities - Other liabilities (Details) - Other Liabilities - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Other liabilities | ||
Asset retirement obligations | $ 0.7 | $ 2.8 |
Income taxes payable | 0.4 | |
Medical and dental benefits | $ 2 | $ 1.8 |
Commitments and Contingencies -
Commitments and Contingencies - Warranty (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Warranty | |||
Balance, beginning of the period | $ 7,878 | $ 5,058 | $ 7,067 |
Warranties issued | 8,304 | 7,102 | 4,626 |
Consumption of reserves | (7,527) | (5,784) | (6,691) |
Changes in estimate | (54) | 1,502 | 56 |
Balance, end of the period | $ 8,601 | $ 7,878 | $ 5,058 |
Commitments and Contingencies_2
Commitments and Contingencies - Lease terms (Details) | Dec. 31, 2022 |
Leases | |
Lease renewal term | 5 years |
Remaining lease term | 12 years |
Weighted average discount rate (as a percent) | 5.60% |
Commitments and Contingencies_3
Commitments and Contingencies - Minimum lease commitments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Minimum lease commitments, Payments due by period: | ||
2023 | $ 3,757 | |
2024 | 4,347 | |
2025 | 3,812 | |
2026 | 4,012 | |
2027 | 3,620 | |
Thereafter | 34,244 | |
Total future minimum lease payments | 53,792 | |
Less: Imputed interest | (16,878) | |
Total operating lease liabilities | 36,914 | |
Operating lease liability, current | $ 3,333 | $ 4,437 |
Operating Lease, Liability, Current, Statement of Financial Position | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities |
Long-term operating lease liabilities | $ 33,581 | $ 32,834 |
Total operating lease liabilities | $ 36,914 | |
Operating Lease, Liability, Statement of Financial Position | Long-term operating lease liabilities, Accrued expenses and other current liabilities |
Commitments and Contingencies_4
Commitments and Contingencies - Lease costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lease cost | |||
Operating lease cost | $ 7.4 | $ 6.6 | $ 5.4 |
Variable lease cost | 2 | 1.7 | 1.7 |
Lease expense | 9.4 | 8.4 | 7.1 |
Operating cash flows from operating leases | $ 7.5 | 6.6 | $ 6.9 |
Amount of reimbursement for leasehold improvements | $ 6.1 |
Commitments and Contingencies_5
Commitments and Contingencies - Legal Proceedings (Details) $ in Millions | 1 Months Ended | ||
Nov. 30, 2022 USD ($) | Oct. 31, 2021 USD ($) | Aug. 31, 2018 case | |
Ultratech acquisition litigation | |||
Legal Proceedings | |||
Number of purported class action complaints filed | case | 2 | ||
Wolther Action | |||
Legal Proceedings | |||
Settlement amount | $ 15 | ||
Derivative Action | |||
Legal Proceedings | |||
Settlement amount | $ 0.3 |
Commitments and Contingencies_6
Commitments and Contingencies - Concentration of Credit Risk (Details) - customer | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts Receivable | Credit Concentration Risk | Top Ten Customers | |||
Concentration of Credit Risk | |||
Number of customers | 10 | 10 | |
Concentration Risk (as a percent) | 63% | 65% | |
Accounts Receivable | Credit Concentration Risk | Customer A | |||
Concentration of Credit Risk | |||
Concentration Risk (as a percent) | 14% | ||
Accounts Receivable | Credit Concentration Risk | Customer C | |||
Concentration of Credit Risk | |||
Concentration Risk (as a percent) | 12% | ||
Accounts Receivable | Credit Concentration Risk | Customer D | |||
Concentration of Credit Risk | |||
Concentration Risk (as a percent) | 10% | ||
Accounts Receivable | Credit Concentration Risk | Customer F | |||
Concentration of Credit Risk | |||
Concentration Risk (as a percent) | 10% | ||
Net Sales | Customer Concentration Risk | Customer A | |||
Concentration of Credit Risk | |||
Concentration Risk (as a percent) | 15% | ||
Net Sales | Customer Concentration Risk | Customer B | |||
Concentration of Credit Risk | |||
Concentration Risk (as a percent) | 10% | ||
Net Sales | Customer Concentration Risk | Customer E | |||
Concentration of Credit Risk | |||
Concentration Risk (as a percent) | 13% |
Commitments and Contingencies_7
Commitments and Contingencies - Receivables (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Minimum | Geographic location, One | |
Concentration of Credit Risk | |
Credit period for accounts receivable | 30 days |
Maximum | Geographic location, One | |
Concentration of Credit Risk | |
Credit period for accounts receivable | 90 days |
Maximum | Geographic location, Two | |
Concentration of Credit Risk | |
Credit period for accounts receivable | 150 days |
Commitments and Contingencies_8
Commitments and Contingencies - Receivable Purchase Agreement (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies | |||
Maximum amount of trade receivables to be sold under agreement | $ 15 | ||
Receivables sold | $ 13.2 | $ 0 | |
Receivables sold remaining outstanding | 5.4 | ||
Amount of trade receivables available to be sold under agreement | $ 9.6 |
Commitments and Contingencies_9
Commitments and Contingencies - Suppliers (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Purchase Commitments | ||
Deposits with suppliers | $ 9.4 | $ 3.9 |
Commitments and Contingencie_10
Commitments and Contingencies - Purchase Commitments and Bank Guarantees (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Purchase commitments | |
Purchase commitments due within one year | $ 289.2 |
Bank guarantees | |
Bank guarantees and letters of credit outstanding | 8.2 |
Unused bank guarantees and letters of credit | $ 14.1 |
Debt - 2023. 2025 and 2027 Note
Debt - 2023. 2025 and 2027 Notes (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||||
Nov. 05, 2021 | Nov. 11, 2020 | May 18, 2020 | Jan. 10, 2017 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2022 | Nov. 17, 2020 | |
Debt | ||||||||
Principal amount | $ 277,673 | $ 277,673 | ||||||
Proceeds, net of issuance costs | $ 120,095 | |||||||
Cash paid for repurchase of notes | 115,604 | 81,240 | ||||||
Loss on extinguishment of debt | (4,029) | (7,841) | ||||||
Purchase of capped calls | $ 10,300 | 10,313 | ||||||
Reduction of additional paid-in capital for extinguishment of equity component of note repurchased/exchanged | 6,080 | $ 14,714 | ||||||
2023 Notes | ||||||||
Debt | ||||||||
Principal amount | $ 345,000 | 20,173 | 20,173 | |||||
Interest rate (as a percent) | 2.70% | |||||||
Proceeds, net of issuance costs | $ 335,800 | |||||||
Repurchased and retired amount | $ 111,500 | $ 125,000 | 88,300 | |||||
Carrying amount of debt extinguished | 105,500 | 113,100 | 78,100 | |||||
Cash paid for repurchase of notes | 115,600 | 81,200 | ||||||
Reduction of additional paid-in capital for extinguishment of equity component of note repurchased/exchanged | 6,100 | 14,600 | 100 | |||||
Accrued and unpaid interest | $ 1,000 | |||||||
2023 Notes | Other income (expense), net | ||||||||
Debt | ||||||||
Loss on extinguishment of debt | $ 4,800 | 3,000 | 4,000 | |||||
2025 Notes | ||||||||
Debt | ||||||||
Principal amount | 132,500 | 132,500 | $ 132,500 | |||||
Interest rate (as a percent) | 3.50% | |||||||
2027 Notes | ||||||||
Debt | ||||||||
Principal amount | $ 125,000 | $ 125,000 | $ 125,000 | |||||
Interest rate (as a percent) | 3.75% | |||||||
Proceeds, net of issuance costs | $ 121,900 |
Debt - Convertible Senior Notes
Debt - Convertible Senior Notes (Details) | 12 Months Ended | ||||
Nov. 17, 2020 USD ($) $ / shares | May 18, 2020 USD ($) $ / shares | Jan. 10, 2017 USD ($) $ / shares | Dec. 31, 2022 USD ($) D | Dec. 31, 2021 USD ($) | |
Debt | |||||
Transaction costs | $ 835,000 | ||||
Long-term Debt, Measurement Input | us-gaap:MeasurementInputDiscountRateMember | us-gaap:MeasurementInputDiscountRateMember | us-gaap:MeasurementInputDiscountRateMember | ||
Convertible Notes | |||||
Debt | |||||
Multiples of principal holders may convert | 1,000 | ||||
Trading days | 5 | ||||
Consecutive trading days | D | 30 | ||||
Stock price trigger (as a percent) | 130% | ||||
Number of consecutive business days | 5 days | ||||
Maximum percentage of common stock conversion | 98% | ||||
Convertible Notes | Minimum | |||||
Debt | |||||
Trading days | D | 20 | ||||
2023 Notes | |||||
Debt | |||||
Conversion rate | 0.0249800 | ||||
Conversion price (in dollars per share) | $ / shares | $ 40.03 | ||||
Transaction costs | $ 9,200,000 | ||||
Measurement input | 7 | ||||
Debt discount | $ 72,500,000 | ||||
Transaction costs allocated to the equity component | $ 1,900,000 | ||||
2025 Notes | |||||
Debt | |||||
Conversion rate | 0.0416667 | ||||
Conversion price (in dollars per share) | $ / shares | $ 24 | ||||
Transaction costs | $ 1,900,000 | ||||
Measurement input | 8 | ||||
Debt discount | $ 21,000,000 | ||||
Transaction costs allocated to the equity component | $ 300,000 | ||||
2027 Notes | |||||
Debt | |||||
Conversion rate | 0.0715372 | ||||
Conversion price (in dollars per share) | $ / shares | $ 13.98 | ||||
Transaction costs | $ 3,100,000 | ||||
Measurement input | 9.1 | ||||
Debt discount | $ 34,200,000 | ||||
Transaction costs allocated to the equity component | $ 800,000 |
Debt - Carrying Value (Details)
Debt - Carrying Value (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Nov. 17, 2020 | May 18, 2020 | Jan. 10, 2017 |
Debt | |||||
Principal amount | $ 277,673 | $ 277,673 | |||
Unamortized debt discount/transaction costs | (3,013) | (48,235) | |||
Net carrying value | 274,660 | 229,438 | |||
2023 Notes | |||||
Debt | |||||
Principal amount | 20,173 | 20,173 | $ 345,000 | ||
Unamortized debt discount/transaction costs | (4) | (967) | |||
Net carrying value | 20,169 | 19,206 | |||
2025 Notes | |||||
Debt | |||||
Principal amount | 132,500 | 132,500 | $ 132,500 | ||
Unamortized debt discount/transaction costs | (990) | (17,302) | |||
Net carrying value | 131,510 | 115,198 | |||
2027 Notes | |||||
Debt | |||||
Principal amount | 125,000 | 125,000 | $ 125,000 | ||
Unamortized debt discount/transaction costs | (2,019) | (29,966) | |||
Net carrying value | $ 122,981 | $ 95,034 |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Non-Cash Interest Expense | |||
Amortization of debt discount/transaction costs | $ 962 | $ 13,819 | $ 13,792 |
Total Interest Expense | 10,832 | 26,282 | 24,640 |
2023 Notes | |||
Cash Interest Expense | |||
Coupon interest expense | 545 | 3,138 | 7,390 |
Non-Cash Interest Expense | |||
Amortization of debt discount/transaction costs | 97 | 4,932 | 10,887 |
Estimated fair value | $ 19,500 | ||
Convertible Debt, Fair Value by Fair Value Hierarchy Level | Level 2 | ||
2025 Notes | |||
Cash Interest Expense | |||
Coupon interest expense | $ 4,637 | 4,637 | 554 |
Non-Cash Interest Expense | |||
Amortization of debt discount/transaction costs | 457 | 4,795 | 546 |
Estimated fair value | $ 143,600 | ||
Convertible Debt, Fair Value by Fair Value Hierarchy Level | Level 2 | ||
2027 Notes | |||
Cash Interest Expense | |||
Coupon interest expense | $ 4,688 | 4,688 | 2,904 |
Non-Cash Interest Expense | |||
Amortization of debt discount/transaction costs | 408 | $ 4,092 | $ 2,359 |
Estimated fair value | $ 192,000 | ||
Convertible Debt, Fair Value by Fair Value Hierarchy Level | Level 2 |
Debt - Capped Call Transactions
Debt - Capped Call Transactions (Details) - Capped Call Transactions $ / shares in Units, $ in Millions | May 13, 2020 USD ($) $ / shares |
Debt | |
Aggregate price of capped call transaction | $ | $ 10.3 |
Cap price of the capped call transactions (in dollars per share) | $ / shares | $ 18.46 |
Debt - Revolving Credit Facilit
Debt - Revolving Credit Facility (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 16, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Credit Facility | |||
Debt | |||
Borrowing capacity | $ 150,000 | ||
Debt instrument term | 5 years | ||
Additional increase in borrowing subject to certain conditions | $ 75,000 | ||
Outstanding amount | $ 0 | $ 0 | |
Credit Facility | Minimum | |||
Debt | |||
Unused commitment fee percentage (as a percent) | 0.25% | ||
Interest coverage ratio | 3 | ||
Credit Facility | Maximum | |||
Debt | |||
Unused commitment fee percentage (as a percent) | 0.35% | ||
Total net leverage ratio | 4.50 | ||
Secured net leverage ratio | 2.50 | ||
Credit Facility | Base rate | Minimum | |||
Debt | |||
Basis spread on base rate (as a percent) | 0.50% | ||
Credit Facility | Base rate | Maximum | |||
Debt | |||
Basis spread on base rate (as a percent) | 1.25% | ||
Credit Facility | SOFR | |||
Debt | |||
Floor rate on debt instrument (as a percent) | 0% | ||
Credit Facility | SOFR | Minimum | |||
Debt | |||
Basis spread on base rate (as a percent) | 1.50% | ||
Credit Facility | SOFR | Maximum | |||
Debt | |||
Basis spread on base rate (as a percent) | 2.25% | ||
Credit Facility, Letter of Credit | |||
Debt | |||
Borrowing capacity | $ 15,000 |
Stockholders' Equity - AOCI Rol
Stockholders' Equity - AOCI Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Changes in the balances of each component of AOCI | |||
Balance at the beginning of the period | $ 437,628 | $ 408,374 | $ 374,512 |
Other comprehensive income (loss) | (555) | (363) | (48) |
Balance at the end of the period | 577,824 | 437,628 | 408,374 |
Accumulated Other Comprehensive Income | |||
Changes in the balances of each component of AOCI | |||
Balance at the beginning of the period | 1,483 | 1,846 | 1,894 |
Other comprehensive income (loss) | (555) | (363) | (48) |
Balance at the end of the period | 928 | 1,483 | 1,846 |
Foreign Currency Translation | |||
Changes in the balances of each component of AOCI | |||
Balance at the beginning of the period | 1,814 | 1,866 | 1,861 |
Other comprehensive income (loss) | (41) | (52) | 5 |
Balance at the end of the period | 1,773 | 1,814 | 1,866 |
Unrealized Gains (Losses) on Available for Sale Securities | |||
Changes in the balances of each component of AOCI | |||
Balance at the beginning of the period | (331) | (20) | 33 |
Other comprehensive income (loss) | (514) | (311) | (53) |
Balance at the end of the period | $ (845) | $ (331) | $ (20) |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock (Details) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Stockholders' Equity | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares issued | 0 | 0 |
Stock Plans - 2019 Plan (Detail
Stock Plans - 2019 Plan (Details) - shares | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2013 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based compensation | |||||
Number of options outstanding (in shares) | 177,000 | 443,000 | 730,000 | 1,119,000 | |
Inducement Plan | |||||
Share-based compensation | |||||
Awards available for grant (in shares) | 0 | ||||
2019 Plan | |||||
Share-based compensation | |||||
Number of shares authorized | 17,800,000 | ||||
Stock options | Inducement Plan | |||||
Share-based compensation | |||||
Awards granted (in shares) | 124,500 | ||||
Vesting period | 3 years | ||||
Expiration term | 10 years | ||||
Number of options outstanding (in shares) | 2,000 | ||||
Stock options | 2019 Plan | |||||
Share-based compensation | |||||
Vesting period | 3 years | ||||
Number of options outstanding (in shares) | 200,000 | ||||
Stock options | 2019 Plan | Minimum | |||||
Share-based compensation | |||||
Expiration term | 7 years | ||||
Stock options | 2019 Plan | Maximum | |||||
Share-based compensation | |||||
Expiration term | 10 years | ||||
Restricted Stock Awards and Restricted Stock Units | 2019 Plan | Minimum | |||||
Share-based compensation | |||||
Vesting period | 1 year | ||||
Restricted Stock Awards and Restricted Stock Units | 2019 Plan | Maximum | |||||
Share-based compensation | |||||
Vesting period | 5 years | ||||
Restricted stock units | Inducement Plan | |||||
Share-based compensation | |||||
Awards granted (in shares) | 87,000 | ||||
Number of awards outstanding (in shares) | 0 | ||||
Restricted stock units | Inducement Plan | Minimum | |||||
Share-based compensation | |||||
Vesting period | 2 years | ||||
Restricted stock units | Inducement Plan | Maximum | |||||
Share-based compensation | |||||
Vesting period | 4 years | ||||
RSUs and PSUs | 2019 Plan | |||||
Share-based compensation | |||||
Number of awards outstanding (in shares) | 800,000 |
Stock Plans - ESPP (Details)
Stock Plans - ESPP (Details) - ESPP shares in Thousands | 12 Months Ended |
Dec. 31, 2016 shares | |
Share-based compensation | |
Number of shares authorized | 2,250 |
Share price (as a percent) | 85% |
Offer period | 6 months |
Stock Plans - Shares Reserved f
Stock Plans - Shares Reserved for Future Issuance (Details) shares in Millions | Dec. 31, 2022 shares |
2019 Plan | |
Shares reserved for future issuance | |
Total shares reserved | 6.1 |
ESPP | |
Shares reserved for future issuance | |
Total shares reserved | 0.6 |
Stock Plans - Recognized Share-
Stock Plans - Recognized Share-based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Recognized share-based compensation | |||
Total share-based compensation expense | $ 22,994 | $ 15,249 | $ 12,703 |
Share-based compensation tax benefit | 4,500 | ||
Cost of sales | |||
Recognized share-based compensation | |||
Total share-based compensation expense | 4,551 | 2,373 | 1,870 |
Research and development | |||
Recognized share-based compensation | |||
Total share-based compensation expense | 6,682 | 3,850 | 2,900 |
Selling, general and administrative | |||
Recognized share-based compensation | |||
Total share-based compensation expense | $ 11,761 | $ 9,026 | $ 7,933 |
Stock Plans - Unrecognized Shar
Stock Plans - Unrecognized Share-based Compensation Costs (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Unrecognized share-based compensation costs | |
Unrecognized Share-Based Compensation Costs | $ 37,388 |
Weighted Average Period Expected to be Recognized | 1 year 10 months 24 days |
Restricted stock units | |
Unrecognized share-based compensation costs | |
Unrecognized Share-Based Compensation Costs | $ 9,468 |
Weighted Average Period Expected to be Recognized | 1 year 10 months 24 days |
Restricted Stock Awards | |
Unrecognized share-based compensation costs | |
Unrecognized Share-Based Compensation Costs | $ 24,610 |
Weighted Average Period Expected to be Recognized | 1 year 10 months 24 days |
Performance Share Units | |
Unrecognized share-based compensation costs | |
Unrecognized Share-Based Compensation Costs | $ 3,310 |
Weighted Average Period Expected to be Recognized | 2 years |
Stock Plans - Stock Option Acti
Stock Plans - Stock Option Activity (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Shares | |||
Outstanding at the beginning of the period (in shares) | 443 | 730 | 1,119 |
Exercised (in shares) | (2) | ||
Expired (in shares) | (266) | (285) | (389) |
Outstanding at the end of the period (in shares) | 177 | 443 | 730 |
Weighted Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 32.15 | $ 35.26 | $ 34.88 |
Exercised (in dollars per share) | 23.36 | ||
Expired (in dollars per share) | 32.95 | 40.16 | 34.15 |
Outstanding at the end of the period (in dollars per share) | $ 30.94 | $ 32.15 | $ 35.26 |
Stock Plans - Option Exercise R
Stock Plans - Option Exercise Ranges (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Options Outstanding | |
Outstanding (in shares) | shares | 177 |
Weighted Average Remaining Contractual Life | 9 months 18 days |
Weighted-Average Exercise Price (in dollars per share) | $ 30.94 |
Options Exercisable | |
Outstanding (in shares) | shares | 177 |
Weighted Average Remaining Contractual life | 9 months 18 days |
Weighted Average Exercise Price (in dollars per share) | $ 30.94 |
Unvested options outstanding (in shares) | shares | 0 |
$20.00 - $30.00 | |
Stock plans | |
Exercise price, low end of range (in dollars per share) | $ 20 |
Exercise price, high end of range (in dollars per share) | $ 30 |
Options Outstanding | |
Outstanding (in shares) | shares | 10 |
Weighted Average Remaining Contractual Life | 9 months 18 days |
Weighted-Average Exercise Price (in dollars per share) | $ 29.21 |
Options Exercisable | |
Outstanding (in shares) | shares | 10 |
Weighted Average Remaining Contractual life | 9 months 18 days |
Weighted Average Exercise Price (in dollars per share) | $ 29.21 |
$30.01 - $40.00 | |
Stock plans | |
Exercise price, low end of range (in dollars per share) | 30.01 |
Exercise price, high end of range (in dollars per share) | $ 40 |
Options Outstanding | |
Outstanding (in shares) | shares | 167 |
Weighted Average Remaining Contractual Life | 9 months 18 days |
Weighted-Average Exercise Price (in dollars per share) | $ 31.02 |
Options Exercisable | |
Outstanding (in shares) | shares | 167 |
Weighted Average Remaining Contractual life | 9 months 18 days |
Weighted Average Exercise Price (in dollars per share) | $ 31.02 |
Stock Plans - Stock options exe
Stock Plans - Stock options exercised (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Stock Plans | |
Cash received from options exercised | $ 37 |
Intrinsic value of options exercised | $ 6 |
Share-based Compensation - Rest
Share-based Compensation - Restricted shares and performance shares (Details) - RSAs, RSUs, PSAs and PSUs - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Shares | |||
Outstanding at the beginning of the period (in shares) | 2,083 | 2,040 | 2,257 |
Granted (in shares) | 1,253 | 1,031 | 1,054 |
Performance award adjustments (in shares) | 85 | 159 | (51) |
Vested (in shares) | (844) | (1,014) | (798) |
Forfeited (in shares) | (81) | (133) | (422) |
Outstanding at the end of the period (in shares) | 2,496 | 2,083 | 2,040 |
Weighted Average Grant Date Fair Value | |||
Outstanding at the beginning of the period (in dollars per share) | $ 17.33 | $ 12.73 | $ 16.20 |
Granted (in dollars per share) | 29.12 | 24.26 | 9.53 |
Performance award adjustments (in dollars per share) | 14.03 | 18.38 | 30.94 |
Vested (in dollars per share) | 15 | 15.50 | 16.01 |
Forfeited (in dollars per share) | 20.18 | 15.08 | 14.87 |
Outstanding at the end of the period (in dollars per share) | $ 23.83 | $ 17.33 | $ 12.73 |
Total fair value of shares vested | $ 22.1 | $ 22.8 | $ 9 |
Minimum | |||
Weighted Average Grant Date Fair Value | |||
Vesting period | 1 year | ||
Maximum | |||
Weighted Average Grant Date Fair Value | |||
Vesting period | 4 years |
Stock Plans - Performance Award
Stock Plans - Performance Awards Assumptions (Details) - Performance awards with market conditions - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Assumptions | |||
Weighted average fair value (in dollars per share) | $ 45.28 | $ 27.81 | $ 10.59 |
Dividend yield (as a percent) | 0% | 0% | 0% |
Expected volatility factor (as a percent) | 58% | 63% | 60% |
Risk-free interest rate (as a percent) | 2.13% | 0.34% | 0.54% |
Expected life (in years) | 3 years | 3 years | 3 years |
Stock Plans - ESPP FV Assumptio
Stock Plans - ESPP FV Assumptions (Details) - ESPP - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based compensation | |||
Cash proceeds | $ 3.7 | $ 3.4 | $ 2.9 |
Number of shares issued | 208,140 | 196,024 | 254,703 |
Assumptions | |||
Weighted average fair value (in dollars per share) | $ 6 | $ 5.90 | $ 4.81 |
Dividend yield (as a percent) | 0% | 0% | 0% |
Expected volatility factor (as a percent) | 43% | 52% | 70% |
Risk-free interest rate (as a percent) | 1.73% | 0.07% | 0.95% |
Expected life (in years) | 6 months | 6 months | 6 months |
Retirement Plans - Defined Cont
Retirement Plans - Defined Contribution Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Defined contribution plan disclosures | |||
Employer's matching contribution for every dollar the employees contribute (as a percent) | 50% | ||
Employer's matching contribution, vesting period (in years) | 5 years | ||
Aggregate employer's contribution to pension plans | $ 3 | $ 2.6 | $ 2.4 |
Maximum | |||
Defined contribution plan disclosures | |||
Employer's contribution as a percentage of employee's eligible compensation | 3% |
Dispositions (Details)
Dispositions (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020 USD ($) | |
Dispositions | |
Asset impairment | $ 281 |
One non-core product line | Assets sold | |
Dispositions | |
Consideration | $ 11,400 |
Transaction price due upon closing (as a percent) | 85% |
Amount held in escrow (as a percent) | 15% |
Period over which portion of transaction price is held in escrow | 18 months |
Asset impairment | $ 300 |
Income Taxes - Income Attributa
Income Taxes - Income Attributable to Domestic and Foreign Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income (loss) from continuing operations before income taxes | |||
Domestic | $ 47,368 | $ 23,561 | $ (10,292) |
Foreign | 3,617 | 2,119 | 1,828 |
Income before income taxes | $ 50,985 | $ 25,680 | $ (8,464) |
Income Taxes - Components of Ex
Income Taxes - Components of Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
Foreign | $ 1,506 | $ 183 | $ 22 |
State and local | 577 | 110 | 204 |
Total current expense (benefit) for income taxes | 2,083 | 293 | 226 |
Deferred: | |||
Federal | (96,811) | 119 | 136 |
Foreign | (484) | (507) | (320) |
State and local | (20,745) | (263) | (115) |
Total deferred expense (benefit) for income taxes | (118,040) | (651) | (299) |
Total expense (benefit) for income taxes | $ (115,957) | $ (358) | $ (73) |
Income Taxes - Reconciliation t
Income Taxes - Reconciliation to Statutory Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | |||
Income tax expense (benefit) at U.S. statutory rates | $ 10,706 | $ 5,393 | $ (1,777) |
State taxes, net of U.S. federal impact | 1,101 | (607) | (121) |
Effect of international operations | (11,149) | 609 | (131) |
Research and development tax credit | (6,470) | (3,964) | 726 |
Net change in valuation allowance | (104,972) | (2,389) | 388 |
Change in accrual for unrecognized tax benefits | 3,349 | 398 | (6) |
Share-based compensation | 606 | 1,208 | 2,248 |
Asset impairment | 728 | ||
Partial extinguishment of 2023 Notes | (1,090) | (2,292) | |
Adoption of new accounting standard | (9,295) | ||
Other | 167 | 84 | 164 |
Total expense (benefit) for income taxes | $ (115,957) | $ (358) | $ (73) |
Income Taxes - Deferred Taxes (
Income Taxes - Deferred Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred tax assets: | ||
Inventory valuation | $ 11,931 | $ 11,822 |
Net operating losses | 5,647 | 38,816 |
Credit carry forwards | 59,988 | 57,810 |
Warranty and installation accruals | 1,862 | 1,730 |
Share-based compensation | 5,267 | 4,033 |
Customer deposits and deferred revenue | 24,504 | 9,908 |
Operating leases | 8,349 | 8,464 |
Research and experimental ("R&E") capitalization | 19,071 | |
Other | 6,553 | 5,880 |
Total deferred tax assets | 143,172 | 138,463 |
Valuation allowance | (11,083) | (116,054) |
Net deferred tax assets | 132,089 | 22,409 |
Deferred tax liabilities: | ||
Purchased intangible assets | 8,724 | 6,633 |
Convertible Senior Notes | (39) | 10,018 |
Operating leases | 5,994 | 6,539 |
Depreciation | 2,346 | 2,372 |
Total deferred tax liabilities | 17,025 | 25,562 |
Net deferred taxes, asset | 115,064 | |
Net deferred taxes, liability | $ (3,153) | |
Accrual for foreign tax withholdings on unremitted earnings | 900 | |
Valuation allowance | ||
Increase (decrease) in valuation allowance | $ (104,900) |
Income Taxes - Operating Loss C
Income Taxes - Operating Loss Carryforwards (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating loss carryforwards disclosures | ||
Net deferred tax asset | $ 5,647 | $ 38,816 |
State and local | ||
Operating loss carryforwards disclosures | ||
Net operating loss carryforwards | 59,300 | |
Net deferred tax asset | $ 4,100 |
Income Taxes - Tax Credit Carry
Income Taxes - Tax Credit Carryforwards (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Federal | Research and development tax credit carryforward | |
Tax credit carryforward | |
Tax credit carry forwards | $ 36.5 |
State and local | |
Tax credit carryforward | |
Tax credit carry forwards | 32.6 |
Foreign tax | |
Tax credit carryforward | |
Tax credit carry forwards | $ 8.7 |
Income Taxes - Uncertain Tax Po
Income Taxes - Uncertain Tax Positions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Change in unrecognized tax benefits | |||
Balance at beginning of year | $ 12,761 | $ 12,363 | $ 12,369 |
Additions for tax positions related to current year | 4,180 | 2,642 | 1,217 |
Additions for tax positions relating to prior years | 50 | 47 | |
Reductions for tax positions relating to prior years | (731) | (1,196) | (1,166) |
Settlements | (100) | (1,098) | (104) |
Balance at end of year | 16,110 | 12,761 | $ 12,363 |
Unrecognized tax benefits that would impact effective tax rate if recognized | 13,500 | ||
Accrued interest and penalties | $ 500 | $ 400 |
Segment Reporting and Geograp_3
Segment Reporting and Geographic Information - Segment (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Revenue reporting by end-market and geographic region | |||
Number of operating segments | segment | 1 | ||
Number of reportable segments | segment | 1 | ||
Net sales | $ 646,137 | $ 583,277 | $ 454,163 |
Semiconductor | |||
Revenue reporting by end-market and geographic region | |||
Net sales | 369,369 | 247,051 | 165,909 |
Compound Semiconductor | |||
Revenue reporting by end-market and geographic region | |||
Net sales | 121,194 | 106,972 | 107,922 |
Data Storage | |||
Revenue reporting by end-market and geographic region | |||
Net sales | 87,544 | 168,760 | 123,288 |
Scientific & Other | |||
Revenue reporting by end-market and geographic region | |||
Net sales | $ 68,030 | $ 60,494 | $ 57,044 |
Segment Reporting and Geograp_4
Segment Reporting and Geographic Information - Geographic (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue reporting by end-market and geographic region | |||
Net sales | $ 646,137 | $ 583,277 | $ 454,163 |
Long-lived tangible assets | 107,281 | 99,743 | 65,271 |
United States | |||
Revenue reporting by end-market and geographic region | |||
Net sales | 197,433 | 217,209 | 145,353 |
Long-lived tangible assets | 106,550 | 99,220 | 64,967 |
EMEA | |||
Revenue reporting by end-market and geographic region | |||
Net sales | 87,837 | 55,129 | 73,124 |
Long-lived tangible assets | 60 | 94 | 120 |
China | |||
Revenue reporting by end-market and geographic region | |||
Net sales | 123,703 | 105,998 | 57,589 |
Long-lived tangible assets | 70 | 67 | 84 |
Rest of APAC | |||
Revenue reporting by end-market and geographic region | |||
Net sales | 235,735 | 204,633 | 177,569 |
Long-lived tangible assets | 601 | 362 | 100 |
Rest Of World | |||
Revenue reporting by end-market and geographic region | |||
Net sales | $ 1,429 | $ 308 | $ 528 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent event $ in Millions | Jan. 31, 2023 USD ($) employee |
Epiluvac AB | |
Subsequent Events | |
Number of employees | employee | 11 |
Epiluvac AB | |
Subsequent Events | |
Payment to acquire business gross | $ 30 |
Potential additional performance based earn-outs | $ 35 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Valuation and Qualifying Accounts | |||
Balance at Beginning of Period | $ 116,790 | $ 119,179 | $ 130,655 |
Charged (Credited) to Costs and Expenses | (104,971) | 653 | |
Deductions | (2,389) | (12,129) | |
Balance at End of Period | 11,819 | 116,790 | 119,179 |
Allowance for doubtful accounts | |||
Valuation and Qualifying Accounts | |||
Balance at Beginning of Period | 736 | 736 | 602 |
Charged (Credited) to Costs and Expenses | 140 | ||
Deductions | (6) | ||
Balance at End of Period | 736 | 736 | 736 |
Valuation allowance in net deferred tax assets | |||
Valuation and Qualifying Accounts | |||
Balance at Beginning of Period | 116,054 | 118,443 | 130,053 |
Charged (Credited) to Costs and Expenses | (104,971) | 513 | |
Deductions | (2,389) | (12,123) | |
Balance at End of Period | $ 11,083 | $ 116,054 | $ 118,443 |