Veeco Reports 2001 Third Quarter and Nine Month Results.Business & Technology Editors
WOODBURY, N.Y.--(BUSINESS WIRE)--Oct. 26, 2001
Veeco Instruments Inc. (NASDAQ NASDAQ
in full National Association of Securities Dealers Automated Quotations
U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : VECO VECO Vernier Engine Cut Off ) today announced its financial results for the third quarter and nine months ended September 30, 2001.
These results reflect Veeco's acquisitions of ThermoMicroscopes and Applied Epi, which were completed on July 16th and September 17th respectively, using the purchase method of accounting. Despite a difficult business environment, Veeco continues to report significant growth in sales and earnings for both the third quarter and the nine month periods compared to last year.
Third Quarter Results
Veeco's sales for the third quarter of 2001 were $116.0 million, a 43% increase over the $81.1 million reported in the third quarter of 2000, and up 2% sequentially. Veeco's Process Equipment sales were $65.9 million compared with $38.8 million in the third quarter of last year. Third quarter Metrology metrology
Science of measurement. Measuring a quantity means establishing its ratio to another fixed quantity of the same kind, known as the unit of that kind of quantity. sales were $48.4 million compared to sales of $39.8 million in the third quarter of 2000. Third quarter sales increased in each of Veeco's markets and were distributed as follows: 33% data storage, 21% optical/wireless, 21% semiconductor and 25% research.
Operating income Operating Income
The profit realized from a business' own operations.
This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (excluding an $8.2 million in-process R&D write-off Write-Off
A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. related to the acquisitions) was $12.3 million in the third quarter of 2001, an increase of 414% over third quarter 2000 operating income of $2.4 million. Third quarter 2001 net income was $1.8 million ($0.07 per diluted di·lute
tr.v. di·lut·ed, di·lut·ing, di·lutes
1. To make thinner or less concentrated by adding a liquid such as water.
2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share) compared to $3.2 million ($0.12 per diluted share) in the third quarter of last year. Pro-forma diluted earnings per share diluted earnings per share
An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the third quarter of 2001 was $0.32 (using a 35% tax rate and excluding the in-process R&D write-off) compared with $0.07 (using a 35% tax rate) in the third quarter of 2000.
Bookings for the third quarter of 2001 were $62.6 million, a 65% decrease from the $179.9 million in the third quarter of 2000, and down 23% sequentially from the second quarter of 2001. Bookings declined in all of the Company's markets with the exception of research. Veeco's Process Equipment bookings were $30.4 million, a decrease from the $125.4 million in the third quarter of 2000. Veeco's third quarter Metrology bookings were $31.1 million compared to $52.1 million in the third quarter of 2000. Veeco's third quarter book-to-bill ratio Book-to-Bill Ratio
The technology industry's demand-to-supply ratio for orders on a "firm's book" to number of orders filled.
This ratio tells whether the company has more orders than it can deliver (if greater than 1), has the same amount of orders that it can was 0.54. Veeco's bookings by market were 37% data storage, 13% optical/wireless, 13% semiconductor and 37% research.
Nine Month Results
Veeco's sales for the 2001 nine month period were a record $356.7 million, up 32% from the year 2000 nine months of $270.3 million Process Equipment nine month sales were a record $219.4 million compared to $151.7 million in the nine months of 2000. Nine month 2001 Metrology sales were a record $132.3 million compared to $110.5 million in the nine months of 2000. Nine month sales included significant increases in Veeco's atomic force microscope atomic force microscope (AFM), device that uses a spring-mounted probe to image individual atoms on the surface of a material. Unlike the scanning tunneling microscope, which is also a scanning probe microscope, the AFM can be used on materials that do not conduct (AFM (Atomic Force Microscope) A device used to image materials at the atomic level. AFMs are used to solve processing and materials problems in electronics, telecom, biology and other high-tech industries. ) business, up 64%, and Ion Tech ion beam deposition Ion Beam Deposition is a process of applying materials to a target through the application of an ion beam.
In an ion source source materials - gases or evaporated solids - are ionized using electron ionization or by application of high electric fields (Penning ion source). , up 132%, while sales of interferometers decreased 36%.
In the nine months of 2001, Veeco's operating income (excluding an $8.2 million in- process R&D write-off and $1.0 million of restructuring charges restructuring charge
The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. ) was a record $47.0 million compared to $21.9 million (excluding merger and reorganization expenses) in the nine months of 2000. Net income for the 2001 nine month period was $24.7 million ($0.97 per diluted share) versus a net loss of $23.3 million last year (($0.99) per share). Included in the 2000 net loss was the cumulative effect charge for the change in accounting principle of $18.4 million ($0.78 per share, net of tax) associated with the adoption of SAB SAB Spontaneous abortion. See Abortion. 101 effective January 1, 2000. Pro-forma diluted earnings per share for the 2001 nine month period was $1.24 (using a 35% tax rate and excluding in-process R&D write-off and restructuring charge) compared to $0.59 (using a 35% tax rate and excluding merger and restructure expenses and cumulative effect of accounting charge) for the prior year.
Veeco's nine month 2001 bookings were $256.9 million, a 39% decrease from the $423.6 million booked in the nine months of 2000. Process Equipment nine month bookings were $143.4 million, compared to $269.6 million reported in the prior year nine month period. Metrology nine month bookings were $108.5 million compared to $145.7 million last year. Veeco's nine-month book-to-bill ratio was 0.72.
Management Review of Results
Edward H. Braun, Veeco's Chairman, President and Chief Executive Officer commented, "Despite a weak business environment, Veeco continues to deliver year-over-year sales and earnings growth; sales increased 43% and operating profit Operating profit (or loss)
Revenue from a firm's regular activities less costs and expenses and before income deductions.
See operating income. improved over 400% from the prior year third quarter. Our market and product diversification Diversification
A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance.
Diversification is possibly the greatest way to reduce the risk. will allow 2001 to be a year of significant revenue and earnings growth for the Company. However, third quarter bookings of $63 million were below our prior expectations, reflecting continued weak business conditions impacting worldwide information age markets. During the third quarter, customer cancellations represented 26% of our opening backlog Backlog
The total value of sales orders waiting to be fulfilled.
This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. . Our current backlog represents five months' sales. As a result of the deteriorating de·te·ri·o·rate
v. de·te·ri·o·rat·ed, de·te·ri·o·rat·ing, de·te·ri·o·rates
To diminish or impair in quality, character, or value: business environment, we are taking cost reduction steps including an additional 15% staff reduction, plant consolidations, selective work-week reductions and reduced management salaries. We are taking these aggressive measures to maintain Veeco's continued profitability throughout this downturn Downturn
The transition point between a rising, expanding economy to a falling, contracting one.
A decline in security prices or economic activity following a period of rising or stable prices or activity. ."
Mr. Braun continued, "Commenting on our individual markets, the semiconductor industry overall appears to be at a bottom. Semiconductor customers continued to purchase automated au·to·mate
v. au·to·mat·ed, au·to·mat·ing, au·to·mates
1. To convert to automatic operation: automate a factory.
2. AFMs for 0.10 micron micron: see micrometer.
One micrometer, which is one millionth of a meter or approximately 1/25,000 of an inch. The tiny elements that make up a transistor on a chip are measured in micrometers and nanometers. See process technology. feature size, 300mm wafers wafers
compressed roughage in flat plates useful for feeding to animals in transit. , CMP CMP (cytidine monophosphate): see cytosine.
(1) (CMP Media LLC, Manhasset, NY, www.cmp.com) Part of United Business Media, CMP is a leading integrated media company that offers a wide variety of publications and services in the information and advanced etch To create a design in a material by digging out the material. The circuit designs on printed circuit boards and chips are etched by acid. See chip and printed circuit board. applications. Our purchase of ThermoMicroscopes during the third quarter further expands our research AFM business. The data storage industry continues to invest in the development of advanced 50 to 100Gb/in2 thin film magnetic heads requiring the purchase of our advanced 10-target, ultra-high vacuum cluster deposition Deposition
Christ is taken from the cross and enshrouded. [N.T.: Matthew 27:57–60; Christian Art: Appleton, 55]
See : Passion of Christ systems. In optical telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. we have broadened our product line to include molecular beam epitaxy A technique that "grows" atomic-sized layers on a chip rather than creating layers by diffusion. (MBE MBE (in Britain) Member of the Order of the British Empire
MBE n abbr (BRIT) (= Member of the Order of the British Empire) → título ceremonial
MBE n abbr (Brit) (= ) process equipment for fabrication fabrication (fab´rikā´shn),
n the construction or making of a restoration. of active wireless devices. With Applied Epi's MBE capabilities, we are well positioned to play a leading role in the future integration of III-V compound semiconductor and silicon device development. Despite a weak market, selected enabling technology buys have allowed Veeco to outperform Outperform
An analyst recommendation meaning a stock is expected to do slightly better than the market return.
Exact definitions vary by brokerage, but in general this rating is better than neutral and worse than buy or strong buy. during this downturn, evidenced by our nine-month book-to-bill ratio of 0.72, higher than the industry average."
Veeco's Fourth Quarter Guidance
Veeco currently estimates that fourth quarter sales will be in the range of $95 - $100 million, with cash earnings per share (using a tax rate of 35% and excluding amortization expenses and non-recurring charges) between $0.05 and $0.10. Veeco currently forecasts that fourth quarter bookings will be greater than $70 million. Veeco expects to record a restructuring charge in the fourth quarter of approximately $15-20 million. Fourth quarter guidance excludes amortization and any one-time charges discussed herein.
Veeco's acquisition of Applied Epi was reported under purchase accounting rules. As a result of new purchase accounting guidance, deferred revenue (SAB 101) and related gross profit not recognized by Applied Epi prior to the acquisition will be treated as an adjustment to the opening balance sheet. As a result, approximately $4 million of Applied Epi's sales and $0.05 earnings per share will not be reported in Veeco's fourth quarter results.
Investor Conference Call/ Webcast
Veeco is hosting an investor conference call this morning, Friday, October 26th at 9 am ET to review the Company's financials and operations for the third quarter of 2001. Interested parties may listen to the call live by calling 800-289-0730 or through an audio webcast at http://www.veeco.com (click on Investor Information), where this call will be archived for future reference. A telephonic playback Playback could mean:
Veeco Instruments Inc. is a worldwide leader in process equipment and metrology tools for the optical telecommunications/wireless, data storage, semiconductor and research markets. Manufacturing and engineering facilities are located in New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , California, Colorado, Arizona and Minnesota. Global sales and service offices are located throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , 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 conditions or about market acceptance and future sales of Veeco's products, 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 cyclical cyclical
Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. nature of the telecommunications/wireless, data storage, semiconductor and research markets, risks associated with 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 Management's discussion and analysis (MD&A)
A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial sections of Veeco's Report on Form 10-K Form 10-K
A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information.
See 10-K. and Annual Report to Shareholders.
Veeco Instruments Inc. Consolidated Statements of Operations (In thousands, except per share data) Unaudited Unaudited Quarter Ended Nine Months Ended September 30, September 30, 2001 2000 2001 2000 -------------------- ------------------------ Net sales $115,951 $81,146 $356,674 $270,301 Cost of sales 65,115 43,805 193,050 163,597 Gross profit 50,836 37,341 163,624 106,704 Costs and expenses: Research and development expense 15,414 13,115 46,530 40,523 Selling, general and administrative expense 21,348 20,164 64,327 56,450 Amortization expense 1,039 1,180 3,356 2,665 Other expense, net 765 496 2,397 537 In-process R&D write-off 8,200 - 8,200 - Merger and restructuring expenses - - 1,000 14,206 Asset impairment charge - - - 3,722 Operating income (loss) 4,070 2,386 37,814 (11,399) Interest income, net (263) (407) (1,426) (928) Income (loss) before income taxes and cumulative effect of change in accounting principle 4,333 2,793 39,240 (10,471) Income tax provision (benefit) 2,485 (392) 14,519 (5,578) Net income (loss) before cumulative effect of change in accounting principle 1,848 3,185 24,721 (4,893) Cumulative effect of change in accounting principle, net of taxes - - - (18,382) Net income (loss) $ 1,848 $ 3,185 $ 24,721 $ (23,275) Net income (loss) per common share before cumulative effect of change in accounting principle $ 0.07 $ 0.13 $ 0.99 $ (0.21) Cumulative effect of change in accounting principle - - - (0.78) Net income (loss) per common share $ 0.07 $ 0.13 $ 0.99 $ (0.99) Diluted net income (loss) per common share before cumulative effect of change in accounting principle $ 0.07 $ 0.12 $ 0.97 $ (0.21) Cumulative effect of change in accounting principle - - - (0.78) Diluted net income (loss) per common share $ 0.07 $ 0.12 $ 0.97 $ (0.99) Pro forma diluted net income per share, excluding charges $ 0.32(1) $ 0.07 $ 1.24(1) $ 0.59(2) Weighted average shares outstanding 25,413 24,098 24,956 23,537 Diluted weighted average shares outstanding 25,669 25,561 25,373 25,026 (1) Pro forma diluted net income per share is calculated using a 35% tax rate and excludes an $8.2 million charge to earnings taken in the third quarter 2001, related to in-process R&D write-offs in connection with the acquisition of Applied Epi ($7 million) and ThermoMicroscopes ($1.2 million) and a $1 million charge taken in the second quarter 2001 for restructuring costs. (2) Pro forma diluted net income per share is calculated using a 35% tax rate and excludes a $33.3 million charge to earnings, principally associated with the merger with CVC, Inc., which closed on May 5, 2000. This transaction was accounted for as a pooling of interests. The $33.3 million of charges includes $15.3 million for the write-off of inventory related to the consolidation of product lines (included in cost of sales), $14.3 million related to merger and restructuring costs and $3.7 million related to the write-down of long-lived assets. Pro forma diluted net income per share also excludes an $18.4 million charge (net of taxes) for the cumulative effect of change in accounting principle related to the adoption of SAB 101, effective January 1, 2000. Veeco Instruments Inc. Condensed Consolidated Balance Sheets (In thousands) September 30, December 31, 2001 2000 -------------------- ------------------ (Unaudited) (Audited) ASSETS Current assets: Cash and cash equivalents $55,117 $63,420 Short-term investments 43 26,895 Accounts receivable, net 94,001 98,248 Inventories 142,202 100,062 Other current assets 52,211 53,610 Total current assets 343,574 342,235 Property, plant and equipment, net 75,493 60,094 Excess of cost over net assets acquired, net 129,871 9,481 Other assets, net 65,311 11,473 Total assets $614,249 $423,283 LIABILITIES AND SHAREHOLDERS' EQUITY Other current liabilities $99,465 $93,001 Deferred gross profit 14,489 28,771 Current liabilities 113,954 121,772 Long-term liabilities 67,362 18,603 Shareholders' equity 432,933 282,908 Total liabilities and shareholders' equity $614,249 $423,283