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EXHIBIT 99.1
[VEECO LOGO]
NEWS
Veeco Instruments Inc., 100 Sunnyside Blvd., Woodbury, NY 11797
Tel. 516-677-0200 FAX 516-677-0380
FOR IMMEDIATE RELEASE
FINANCIAL CONTACT: DEBRA WASSER, VP OF IR & CORP. COMM., 516-677-0200, X1472
TRADE CONTACT: FRAN BRENNEN, DIR. OF MARKETING COMMUNICATIONS, 516-677-0200
X1222
VEECO REPORTS FOURTH QUARTER AND YEAR-END 2003 RESULTS
Woodbury, NY, February 6, 2004 -Veeco Instruments Inc. (Nasdaq: VECO) today
announced its financial results for the fourth quarter and year ended December
31, 2003. Veeco reports its results on a GAAP basis, and also provides results
excluding certain charges. Investors should refer to the attached table for
further details of the reconciliation of GAAP (loss) to earnings excluding
certain charges. Veeco completed two acquisitions during the fourth quarter of
2003: the acquisition of the TurboDisc(R) MOCVD ("TurboDisc") operations of
Emcore Corporation and the purchase of Advanced Imaging, Inc., ("Aii") a leading
manufacturer of precision lapping equipment for the data storage industry,
referred to collectively as the "acquisitions" below.
HIGHLIGHTS
Veeco's fourth quarter 2003 sales were $76.9 million, up 22% sequentially
from the $63.1 million reported in the third quarter of 2003. Veeco reported a
net loss of $4.8 million, or a loss of $0.16 per share. Earnings excluding
certain charges were $0.03 per diluted share (in line with Veeco's guidance).
(See tables for explanation of purchase accounting and reconciliation to GAAP
loss).
The Company's fourth quarter guidance (provided on October 27, 2003 and
updated for the acquisitions in November) was: revenues of $70-$76 million and
earnings excluding certain charges between $0.00 and $0.03 per diluted share.
The Company's fourth quarter 2003 bookings were $96.8 million, up 51%
sequentially from the third quarter, including bookings from the acquired
companies post-acquisition. Veeco's fourth quarter book-to-bill was 1.26 to 1.
Veeco's fourth quarter 2003 orders without acquisitions were $84.1 million, up
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31% sequentially from $64.0 million reported in the third quarter of 2003.
Veeco's fourth quarter order guidance (without acquisitions) was $64-$70
million. Veeco's year-ending backlog was $124.4 million.
Edward H. Braun, Veeco's Chairman and Chief Executive Officer, commented,
"Veeco's fourth quarter orders, revenues and EBITA improved both sequentially
and year-over-year. Order strength reflected a broad industry upturn across all
of our markets and in all geographic regions. Capacity and technology drivers
were evident in semiconductor, data storage, wireless, compound semiconductor
and scientific research. Fourth quarter orders of $96.8 million (up 51%
sequentially) were Veeco's strongest overall orders in ten quarters. Fourth
quarter revenue of $76.9 million was up 22% sequentially."
"The November 2003 acquisitions of TurboDisc MOCVD and Advanced Imaging
Inc.'s precision lapping technologies allow us to significantly broaden our
product and technology offerings to Veeco's core markets in 2004," commented Mr.
Braun.
Mr. Braun commented on Veeco's full year 2003, adding, "Overall 2003 was a
challenging year for the equipment industry and for our customers. Veeco's 2003
sales of $279.3 million were down 7% from 2002, while orders of $297.6 were up a
modest 3%. Significant 2003 focus on cost reduction and profitability resulted
in improved gross margins (up 2.2 points) to 46.0% (exclusive of purchase
accounting adjustments), and 2003 EBITA (earnings excluding certain charges
before interest, income taxes and amortization) was $13.0 million, up from $1.3
million in 2002 despite the decrease in revenue. Veeco also generated $21.8
million of cash from operations during 2003 and our balance sheet remains strong
with $106.8 million in cash after the completion of acquisitions."
FOURTH QUARTER 2003 RESULTS
Veeco's bookings for the fourth quarter of 2003 were $96.8 million, a 36%
increase from the $71.3 million reported in the fourth quarter of 2002, and a
51% increase compared with the $64.0 million reported in the third quarter of
2003. Fourth quarter 2003 Metrology bookings were $46.7 million, compared to
$42.0 million reported in the fourth quarter of 2002. Fourth quarter 2003
Process Equipment bookings were $50.1 million, compared to the $29.3 million
reported in the fourth quarter of 2002. Veeco's bookings by market in the fourth
quarter were 23% data storage, 18% semiconductor, 27%
telecommunications/wireless and 32% scientific research. Q4 orders by region
were 33% North America, 23% Europe, 25% APAC and 19% Japan. The Company's fourth
quarter book-to-bill ratio was 1.26 to 1.
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Veeco's sales for the fourth quarter of 2003 were $76.9 million, a 12%
increase from the $68.6 million reported for the fourth quarter of 2002.
Metrology sales were $35.5 million in the fourth quarter of 2003, compared to
$34.2 million reported in the fourth quarter of 2002. Veeco's Process Equipment
sales were $41.4 million in the fourth quarter of 2003, compared with $34.4
million in the fourth quarter of 2002. Veeco's sales by market in the fourth
quarter of 2003 were 36% data storage, 12% semiconductor, 17%
telecommunications/wireless and 35% scientific research. Revenue by geographic
region was 42% North America, 16% Europe, 26% APAC and 16% Japan, with strong
growth in APAC (up 127% from the fourth quarter of 2002).
Veeco incurred an operating loss of $6.0 million in the fourth quarter of
2003, compared to an operating loss of $130.6 million in the fourth quarter of
2002. Included in the fourth quarter 2003 operating result was a $1.5 million
charge for the write-off of in-process R&D, a $1.7 million reduction in gross
profit from purchase accounting adjustments due to the required capitalization
of profit in inventory and permanent elimination of certain deferred revenue, as
well as $2.1 million of merger and restructuring costs. Exclusive of these
charges, Veeco's fourth quarter 2003 EBITA was $3.5 million compared to a loss
of $3.4 million in the fourth quarter of 2002, which also excludes restructuring
charges. Veeco's fourth quarter 2003 net loss was $4.8 million (($0.16) per
share) compared to a net loss of $116.5 million (($4.00) per share) in the
fourth quarter of 2002. Excluding certain charges, fourth quarter 2003 earnings
were $0.03 per share compared to a loss of ($0.11) per share in the fourth
quarter of 2002.
YEAR-END 2003 RESULTS
Veeco's 2003 bookings were $297.6 million, an increase of 3% from the
$289.1 million reported in 2002. Metrology 2003 bookings were $154.4 million
compared to $154.1 million in 2002. Process Equipment 2003 bookings were $143.2
million, compared to $135.0 million reported in 2002. Veeco's 2003 bookings by
market were 31% data storage, 15% semiconductor, 18% telecommunications/wireless
and 36% scientific research. Veeco's bookings by region were 38% North America,
18% Europe, 24% APAC and 20% Japan. The Company's 2003 book-to-bill ratio was
1.07 to 1.
Veeco's 2003 sales were $279.3 million, a 7% decrease from the $298.9
million reported in 2002. Metrology 2003 sales were $149.1 million versus $152.2
million in 2002. Process Equipment 2003 sales were $130.2 million versus $146.7
million in 2002. Veeco's sales by market in 2003 were 33% data storage, 14%
semiconductor, 14% telecommunications/wireless and 39% scientific research.
Veeco's 2003 sales by region were 39% North America, 17% Europe, 24% APAC and
20% Japan.
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Veeco incurred an operating loss of $9.3 million in 2003, compared to an
operating loss of $137.9 million in 2002. Included in the 2003 operating loss
was a $1.5 million charge for the write-off of in-process R&D, a $1.7 million
reduction in gross profit from purchase accounting adjustments due to the
required capitalization of profit in inventory and permanent elimination of
certain deferred revenue, and $5.4 million of merger and restructuring costs.
Exclusive of these charges, Veeco's 2003 EBITA was $13.0 million compared to
$1.3 million in 2002, which also excludes restructuring charges. Veeco's net
loss for 2003 was $9.7 million (($0.33) per share) compared to a net loss of
$123.7 million (($4.25) per share) in 2002. Excluding certain charges, 2003
earnings were $0.11 per diluted share compared to a loss of ($0.10) per share in
2002.
VEECO'S OUTLOOK
Mr. Braun commented, "Industry market conditions improved dramatically in
the fourth quarter, and we appear to be at the start of a sustainable recovery
cycle after two years of historically low capex investment by our customers.
Veeco's diversification strategy should serve us well as multiple Veeco markets
are forecasted to experience 2004 growth."
"We intend to work closely with our key customers to be aligned with their
technology roadmaps and capacity planning requirements including: the continued
80GB production ramp and 120GB disk drive development programs, 90nm and 300mm
ramps in semiconductor, growth in high brightness light-emitting diodes
(HB-LEDs) for backlighting of color displays, RF devices and other
wireless/lighting applications, and continued use of our atomic force
microscopes in nanoscience research." Mr. Braun concluded, "Veeco's goal is to
achieve higher levels of revenue and profitability in 2004 through a combination
of improved business conditions, a continued focus on cost control, and a
broadened product line of key enabling process equipment and metrology
technologies."
Veeco currently forecasts that first quarter 2004 bookings and revenue will
increase approximately 10% sequentially. First quarter 2004 orders are
forecasted to be in the range of $105 to $109 million and sales in the range of
$84 to $88 million. Veeco's book-to-bill is forecasted to remain at
approximately 1.2 to 1. The Company currently forecasts that it will incur a net
loss between ($0.09 and $0.05) per share on a GAAP basis and will earn between
$0.05 and $0.09 per share, excluding amortization of $5.0 million and purchase
accounting adjustments related to the acquisitions of $1.9 million, using a 35%
tax rate.
INVESTOR CONFERENCE CALL/ WEBCAST
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Veeco will host an investor conference call this morning, February 6th at
10 am EST to review these fourth quarter and full year 2003 results. You may
listen to the call live at 1-800-810-0924 or through an audio webcast at
http://www.veeco.com (Investor Information). VEECO HAS PREPARED A SLIDE
PRESENTATION WITH FINANCIAL HIGHLIGHTS THAT IS ALSO AVAILABLE AT THIS LOCATION
ON THE COMPANY'S WEBSITE. The conference call will be archived for future
reference. A telephonic playback of the conference call will also be available
starting this afternoon through February 13, 2004 at 888-203-1112 or
719-457-0820 (code 500330) or on the Veeco Web site.
ABOUT VEECO
Veeco Instruments Inc. provides solutions for nanoscale applications in the
worldwide semiconductor, data storage, telecommunications/wireless and
scientific research markets. Our Metrology products are used to measure at the
nanoscale and our Process Equipment tools help create nanoscale devices. Veeco's
manufacturing and engineering facilities are located in New York, Arizona,
California, Colorado, Minnesota and New Jersey. Global sales and service offices
are located throughout the United States, Europe, Japan and Asia Pacific.
Additional information on Veeco can be found at http://www.veeco.com/.
TO THE EXTENT THAT THIS NEWS RELEASE DISCUSSES EXPECTATIONS ABOUT MARKET
CONDITION, MARKET ACCEPTANCE AND FUTURE SALES OF VEECO'S PRODUCTS, VEECO'S
FUTURE FINANCIAL PERFORMANCE, OR OTHERWISE MAKES STATEMENTS ABOUT THE FUTURE,
SUCH STATEMENTS ARE FORWARD-LOOKING AND ARE SUBJECT TO A NUMBER OF RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE
STATEMENTS MADE. THESE FACTORS INCLUDE THE CHALLENGES OF CONTINUING WEAKNESS IN
END MARKET CONDITIONS AND THE CYCLICAL NATURE OF THE
TELECOMMUNICATIONS/WIRELESS, DATA STORAGE, SEMICONDUCTOR AND RESEARCH MARKETS,
RISKS ASSOCIATED WITH INTEGRATING ACQUIRED BUSINESSES AND THE ACCEPTANCE OF NEW
PRODUCTS BY INDIVIDUAL CUSTOMERS AND BY THE MARKETPLACE AND OTHER FACTORS
DISCUSSED IN THE BUSINESS DESCRIPTION AND MANAGEMENT'S DISCUSSION AND ANALYSIS
SECTIONS OF VEECO'S ANNUAL REPORT ON FORM 10-K, SUBSEQUENT QUARTERLY REPORTS ON
FORM 10-Q AND CURRENT REPORTS ON FORM 8-K .
-FINANCIAL TABLES ATTACHED-
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VEECO INSTRUMENTS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<Table>
<Caption>
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2003 2002 2003 2002
----------------------------- -----------------------------
Net sales $ 76,949 $ 68,644 $ 279,321 $ 298,885
Cost of sales 44,234 56,086 152,307 183,042
----------------------------- -----------------------------
Gross profit 32,715 12,558 127,014 115,843
Costs and expenses:
Selling, general and administrative expense 17,969 18,494 67,986 75,899
Research and development expense 13,361 12,717 48,868 53,889
Amortization expense 4,237 3,207 13,800 13,323
Other income, net (469) (228) (1,218) (284)
Asset impairment charge - 99,663 - 99,663
Merger and restructuring expense 2,142 9,278 5,403 11,248
Write-off of purchased in-process technology 1,500 - 1,500 -
----------------------------- -----------------------------
Operating loss (6,025) (130,573) (9,325) (137,895)
Interest expense, net 2,108 1,651 7,811 6,002
----------------------------- -----------------------------
Loss from continuing operations, before income taxes (8,133) (132,224) (17,136) (143,897)
Income tax benefit (3,333) (15,693) (7,389) (20,513)
----------------------------- -----------------------------
Net loss from continuing operations (4,800) (116,531) (9,747) (123,384)
Loss from discontinued operations, net of income taxes - - - (346)
----------------------------- -----------------------------
Net loss $ (4,800) $ (116,531) $ (9,747) $ (123,730)
============================= =============================
Net loss per common share from continuing operations $ (0.16) $ (4.00) $ (0.33) $ (4.24)
Loss from discontinued operations - - - (0.01)
----------------------------- -----------------------------
Net loss per common share $ (0.16) $ (4.00) $ (0.33) $ (4.25)
============================= =============================
Weighted average shares outstanding 29,316 29,142 29,263 29,096
</Table>
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VEECO INSTRUMENTS INC.
RECONCILIATION OF GAAP LOSS TO EARNINGS (LOSS) EXCLUDING CERTAIN CHARGES
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<Table>
<Caption>
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2003 2002 2003 2002
------------ ------------ ------------ ------------
Operating loss $ (6,025) $ (130,573) $ (9,325) $ (137,895)
Adjustments:
Amortization expense 4,237 3,207 13,800 13,323
Asset impairment charge - 99,663(1) - 99,663(1)
Write-off of inventory - 15,000(2) - 15,000(2)
Merger and restructuring expense 2,142(3) 9,278(4) 5,403(5) 11,248(6)
Purchase accounting adjustments 1,664(7) - 1,664(7) -
Write-off of purchased in-process technology 1,500(8) - 1,500(8) -
------------ ------------ ------------ ------------
Earnings (loss) excluding certain charges before
interest, income taxes and amortization ("EBITA") 3,518 (3,425) 13,042 1,339
Interest expense, net 2,108 1,651 7,811 6,002
------------ ------------ ------------ ------------
Earnings (loss) excluding certain charges
before income taxes 1,410 (5,076) 5,231 (4,663)
Income tax provision (benefit) at 35% 494 (1,777) 1,831 (1,632)
------------ ------------ ------------ ------------
Earnings (loss) excluding certain charges $ 916 $ (3,299) $ 3,400 $ (3,031)
============ ============ ============ ============
Earnings (loss) excluding certain charges per
diluted share $ 0.03 $ (0.11) $ 0.11 $ (0.10)
Diluted weighted average shares outstanding 29,929 29,142 29,600 29,096
</Table>
(1) The $99.7 million asset impairment charge for 2002 is comprised of a $94.4
million write-down of goodwill, a $3.5 million write-down of buildings available
for sale and a $1.8 million write-off of other fixed assets.
(2) The write-off of inventory is included in cost of sales in the Consolidated
Statement of Operations.
(3) The $2.1 million merger and restructuring charge in the fourth quarter of
2003 is comprised of $1.5 million in severance and business relocation costs and
$0.6 million in merger related expenses.
(4) The $9.3 million merger and restructuring charge in the fourth quarter of
2002 is comprised of a $6.4 million write-off of costs associated with the
terminated FEI merger agreement, $2.6 million of severance and business
relocation costs and $0.3 million of prepayment penalty on the early
extinguishment of debt.
(5) The $5.4 million merger and restructuring charge for 2003 is comprised of
$4.8 million in severance and business relocation costs and $0.6 million in
merger related expenses.
(6) The $11.2 million merger and restructuring charge for the year ended
December 31, 2002 is comprised of a $6.4 million write-off of costs associated
with the terminated FEI merger agreement, $5.4 million of severance and business
relocation costs and $0.3 million of prepayment penalty on the early
extinguishment of debt, partially offset by a $0.9 million gain from the
settlement of a post-retirement benefit plan.
(7) The $1.7 million in purchase accounting adjustments for the quarter and year
ended December 31, 2003 is for the required adjustments to gross profit to
reflect the required capitalization of profit in inventory and permanent
elimination of certain deferred revenue from the TurboDisc and Aii acquisitions.
(8) The $1.5 million write-off of purchased in-process technology for the
quarter and year ended December 31, 2003 is comprised of a $1.0 million
write-off from the Aii acquisition and a $0.5 million write-off from the
Turbodisc acquisition.
NOTE - THE ABOVE RECONCILIATION IS INTENDED TO PRESENT VEECO'S OPERATING
RESULTS, EXCLUDING CERTAIN CHARGES AND PROVIDING INCOME TAXES (BENEFITS) AT A
35% STATUTORY RATE. THIS RECONCILIATION IS NOT IN ACCORDANCE WITH, OR AN
ALTERNATIVE METHOD FOR, GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN THE UNITED
STATES, AND MAY BE DIFFERENT FROM SIMILAR MEASURES PRESENTED BY OTHER COMPANIES.
MANAGEMENT OF THE COMPANY EVALUATES PERFORMANCE OF ITS BUSINESS UNITS BASED ON
EBITA, WHICH IS THE PRIMARY INDICATOR USED BY MANAGEMENT TO PLAN AND FORECAST
FUTURE PERIODS. THE PRESENTATION OF THIS FINANCIAL MEASURE FACILITATES
MEANINGFUL COMPARISON WITH PRIOR PERIODS, AS MANAGEMENT OF THE COMPANY BELIEVES
EBITA REPORTS BASELINE PERFORMANCE AND THUS PROVIDES USEFUL INFORMATION.
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VEECO INSTRUMENTS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<Table>
<Caption>
DECEMBER 31, DECEMBER 31,
2003 2002
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 106,830 $ 214,295
Accounts receivable, net 69,890 67,346
Inventories 97,622 86,250
Prepaid expenses and other current assets 15,823 18,392
Deferred income taxes 24,693 31,549
------------ ------------
Total current assets 314,858 417,832
Property, plant and equipment, net 72,742 55,872
Goodwill 72,989 30,658
Long-term investments 12,376 17,483
Deferred income taxes 18,136 28,888
Other assets, net 105,363 54,654
------------ ------------
Total assets $ 596,464 $ 605,387
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 19,603 $ 13,078
Accrued expenses 31,616 44,993
Deferred profit 2,140 4,535
Current portion of long-term debt 333 312
Income taxes payable 3,700 3,808
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Total current liabilities 57,392 66,726
Long-term debt 229,935 230,273
Other non-current liabilities 2,808 815
------------ ------------
Total non-current liabilities 232,743 231,088
Shareholders' equity 306,329 307,573
------------ ------------
Total liabilities and shareholders' equity $ 596,464 $ 605,387
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