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Veeco Reports Fourth Quarter and Fiscal Year 2022 Financial Results
Source: Nasdaq GlobeNewswire / 15 Feb 2023 16:05:01 America/New_York
Fourth Quarter 2022 Highlights:
- Revenues of $153.8 million, compared with $153.0 million in the same period last year
- GAAP net income of $128.9 million, or $2.00 per diluted share, compared with $8.2 million, or $0.15 per diluted share in the same period last year
- Non-GAAP net income of $21.9 million, or $0.38 per diluted share, compared with $22.6 million, or $0.43 per diluted share in the same period last year
Fiscal Year 2022 Highlights:
- Revenues of $646.1 million, compared with $583.3 million in the same period last year
- GAAP net income of $166.9 million, or $2.71 per diluted share, compared with $26.0 million, or $0.49 per diluted share in the same period last year
- Non-GAAP net income of $89.6 million, or $1.57 per diluted share, compared with $73.6 million, or $1.43 per diluted share in the same period last year
PLAINVIEW, N.Y., Feb. 15, 2023 (GLOBE NEWSWIRE) -- Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its fourth quarter and fiscal year ended December 31, 2022. Results are reported in accordance with U.S. generally accepted accounting principles (“GAAP”) and are also reported adjusting for certain items (“Non-GAAP”). A reconciliation between GAAP and Non-GAAP operating results is provided at the end of this press release.
U.S. Dollars in millions, except per share data 4th Quarter Full Year GAAP Results Q4 '22 Q4 '21 2022 2021 Revenue $ 153.8 $ 153.0 $ 646.1 $ 583.3 Net income $ 128.9 $ 8.2 $ 166.9 $ 26.0 Diluted earnings per share $ 2.00 $ 0.15 $ 2.71 $ 0.49 4th Quarter Full Year Non-GAAP Results Q4 '22 Q4 '21 2022 2021 Operating income $ 23.8 $ 24.9 $ 99.8 $ 86.6 Net income $ 21.9 $ 22.6 $ 89.6 $ 73.6 Diluted earnings per share $ 0.38 $ 0.43 $ 1.57 $ 1.43 “2022 was another year of growth for Veeco,” commented Bill Miller, Ph.D., Veeco’s Chief Executive Officer. “We achieved record revenue with our semiconductor products led by increased traction in laser annealing for both advanced and trailing nodes. We grew our backlog with strong order activity while also strengthening our balance sheet with robust cashflow from operations.”
“We enter 2023 cautiously optimistic,” continued Dr. Mr. Miller. “We’re focused on investing R&D in our product roadmaps and integrating our recently acquired silicon carbide epitaxy business. We expect to outperform the wafer fab equipment market with our semiconductor products, grow in the data storage market and maintain profitability during the current macroeconomic challenges.”
Guidance and Outlook
The following guidance is provided for Veeco’s first quarter 2023:
- Revenue is expected in the range of $130 million to $150 million
- GAAP diluted earnings (loss) per share are expected in the range of $(0.03) to $0.16
- Non-GAAP diluted earnings per share are expected in the range of $0.12 to $0.28
Conference Call Information
A conference call reviewing these results has been scheduled for today, February 15, 2023 starting at 5:00pm ET. To join the call, dial 1-877-407-8029 (toll free) or 1-201-689-8029. Participants may also access a live webcast of the call by visiting the investor relations section of Veeco's website at ir.veeco.com. A replay of the webcast will be made available on the Veeco website that evening. We will post an accompanying slide presentation to our website prior to the beginning of the call.
About Veeco
Veeco (NASDAQ: VECO) is an innovative manufacturer of semiconductor process equipment. Our proven ion beam, laser annealing, lithography, MOCVD, and single wafer etch & clean technologies play an integral role in the fabrication and packaging of advanced semiconductor devices. With equipment designed to optimize performance, yield and cost of ownership, Veeco holds leading technology positions in the markets we serve. To learn more about Veeco’s systems and service offerings, visit www.veeco.com.
Forward-looking Statements
This press release contains “forward-looking statements”, within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, as amended, that are based on management’s expectations, estimates, projections and assumptions. Words such as “expects,” “anticipates,” “plans,” “believes,” “scheduled,” “estimates” and variations of these words and similar expressions are intended to identify forward-looking statements. Forward-looking statements include, but are not limited to, those regarding anticipated growth and trends in our businesses and markets, industry outlooks and demand drivers, our investment and growth strategies, our development of new products and technologies, our business outlook for current and future periods, the impact of the COVID-19 pandemic, our ongoing transformation initiative and the effects thereof on our operations and financial results; and other statements that are not historical facts. These statements and their underlying assumptions are subject to risks and uncertainties and are not guarantees of future performance. Factors that could cause actual results to differ materially from those expressed or implied by such statements include, without limitation: the level of demand for our products; global economic and industry conditions; the effects of regional or global health epidemics, including the effects of the COVID-19 pandemic on the Company’s operations and on those of our customers and suppliers; global trade issues, including the ongoing trade disputes between the U.S. and China, and changes in trade and export license policies; our dependency on third-party suppliers and outsourcing partners; the timing of customer orders; our ability to develop, deliver and support new products and technologies; our ability to expand our current markets, increase market share and develop new markets; the concentrated nature of our customer base; our ability to obtain and protect intellectual property rights in key technologies; our ability to achieve the objectives of operational and strategic initiatives and attract, motivate and retain key employees; the variability of results among products and end-markets, and our ability to accurately forecast future results, market conditions, and customer requirements; the impact of our indebtedness, including our convertible senior notes and our capped call transactions; and other risks and uncertainties described in our SEC filings on Forms 10-K, 10-Q and 8-K, and from time-to-time in our other SEC reports. All forward-looking statements speak only to management’s expectations, estimates, projections and assumptions as of the date of this press release or, in the case of any document referenced herein or incorporated by reference, the date of that document. The Company does not undertake any obligation to update or publicly revise any forward-looking statements to reflect events, circumstances or changes in expectations after the date of this press release.
-financial tables attached-
Veeco Contacts: Investors: Anthony Bencivenga (516) 252-1438 abencivenga@veeco.com Media: Kevin Long (516) 714-3978 klong@veeco.com Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)Three months ended December 31, Year ended December 31, 2022 2021 2022 2021 Net sales $ 153,799 $ 152,972 $ 646,137 $ 583,277 Cost of sales 90,881 88,949 382,989 341,003 Gross profit 62,918 64,023 263,148 242,274 Operating expenses, net: Research and development 26,327 22,283 103,565 88,680 Selling, general, and administrative 20,965 21,211 88,952 84,536 Amortization of intangible assets 2,505 2,974 10,018 12,280 Other operating expense (income), net (271 ) (71 ) 317 68 Total operating expenses, net 49,526 46,397 202,852 185,564 Operating income 13,392 17,626 60,296 56,710 Interest expense, net (1,558 ) (5,799 ) (9,311 ) (26,020 ) Other income (expense), net — (5,010 ) — (5,010 ) Income before income taxes 11,834 6,817 50,985 25,680 Income tax expense (benefit) (117,081 ) (1,387 ) (115,957 ) (358 ) Net income $ 128,915 $ 8,204 $ 166,942 $ 26,038 Income per common share: Basic $ 2.58 $ 0.17 $ 3.35 $ 0.53 Diluted $ 2.00 $ 0.15 $ 2.71 $ 0.49 Weighted average number of shares: Basic 49,912 49,187 49,906 49,073 Diluted 65,684 54,931 65,607 53,643 Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)December 31, December 31, 2022 2021 (unaudited) Assets 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 Liabilities and stockholders’ equity 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 Total stockholders’ equity 577,824 437,628 Total liabilities and stockholders’ equity $ 1,128,183 $ 898,976 Note on Reconciliation Tables
The below tables include financial measures adjusted for the impact of certain items; these financial measures are therefore not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These Non-GAAP financial measures exclude items such as: share-based compensation expense; charges relating to restructuring initiatives; non-cash asset impairments; certain other non-operating gains and losses; and acquisition-related items such as transaction costs, non-cash amortization of acquired intangible assets, and certain integration costs.
These Non-GAAP financial measures may be different from Non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. By excluding these items, Non-GAAP financial measures are intended to facilitate meaningful comparisons to historical operating results, competitors’ operating results, and estimates made by securities analysts. Management is evaluated on key performance metrics including Non-GAAP Operating income (loss), which is used to determine management incentive compensation as well as to forecast future periods. These Non-GAAP financial measures may be useful to investors in allowing for greater transparency of supplemental information used by management in its financial and operational decision-making. In addition, similar Non-GAAP financial measures have historically been reported to investors; the inclusion of comparable numbers provides consistency in financial reporting. Investors are encouraged to review the reconciliation of the Non-GAAP financial measures used in this news release to their most directly comparable GAAP financial measures.
Reconciliation of GAAP to Non-GAAP Financial Data (Q4 2022)
(in thousands)
(unaudited)Non-GAAP Adjustments Share-Based Three months ended December 31, 2022 GAAP Compensation Amortization Other Non-GAAP Net sales $ 153,799 $ 153,799 Gross profit 62,918 1,167 1,011 65,096 Gross margin 40.9 % 42.3 % Operating expenses 49,526 (4,858 ) (2,505 ) (821 ) 41,342 Operating income 13,392 6,025 2,505 1,832 ^ 23,754 Net income 128,915 6,025 2,505 (115,554 ) ^ 21,891 ^ - See table below for additional details. Other Non-GAAP Adjustments (Q4 2022)
(in thousands)
(unaudited)Three months ended December 31, 2022 Transition expenses related to San Jose expansion project $ 1,788 Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 44 Subtotal 1,832 Non-cash interest expense 244 Release of valuation allowance on deferred tax assets (104,971 ) Non-GAAP tax adjustment * (12,659 ) Total Other $ (115,554 ) * - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments. Net Income per Common Share (Q4 2022)
(in thousands, except per share amounts)
(unaudited)Three months ended December 31, 2022 GAAP Non-GAAP Numerator: Net income $ 128,915 $ 21,891 Interest expense associated with convertible notes 2,712 2,467 Net income available to common shareholders $ 131,627 $ 24,358 Denominator: Basic weighted average shares outstanding 49,912 49,912 Effect of potentially dilutive share-based awards 805 805 Dilutive effect of 2023 Convertible Senior Notes 504 504 Dilutive effect of 2025 Convertible Senior Notes 5,521 5,521 Dilutive effect of 2027 Convertible Senior Notes (1) 8,942 6,771 Diluted weighted average shares outstanding 65,684 63,513 Net income per common share: Basic $ 2.58 $ 0.44 Diluted $ 2.00 $ 0.38 (1) The non-GAAP incremental dilutive shares includes the impact of the Company’s capped call transaction issued concurrently with our 2027 Notes, and as such, an effective conversion price of $18.46 is used when determining incremental shares to add to the dilutive share count. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, an effective conversion price of $13.98 is used when determining incremental shares to add to the dilutive share count. Reconciliation of GAAP to Non-GAAP Financial Data (Q4 2021)
(in thousands, except per share amounts)
(unaudited)Non-GAAP Adjustments Share-based Three months ended December 31, 2021 GAAP Compensation Amortization Other Non-GAAP Net sales $ 152,972 $ 152,972 Gross profit 64,023 608 235 64,866 Gross margin 41.9 % 42.4 % Operating expenses 46,397 (2,906 ) (2,974 ) (537 ) 39,980 Operating income 17,626 3,514 2,974 772 ^ 24,886 Net income 8,204 3,514 2,974 7,950 ^ 22,642 Income per common share: Basic $ 0.17 $ 0.46 Diluted 0.15 0.43 Weighted average number of shares: Basic 49,187 49,187 Diluted (1) 54,931 52,761 ^ - See table below for additional details. (1) The non-GAAP incremental dilutive shares includes the impact of the Company’s capped call transaction issued concurrently with our 2027 Notes, and as such, no incremental shares are added to the dilutive share count in periods in which the average stock price per share is below $18.46. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, incremental shares are added to the dilutive share count in periods in which the average stock price per share is above $13.98, and the Company is in a net income position. The average stock price for the three months ended December 31, 2021 was $25.53, and therefore 1.9 million shares were included in the non-GAAP diluted share count, and 4.0 million shares were included in the GAAP diluted share count related to the 2027 Notes.
Other Non-GAAP Adjustments (Q4 2021)
(in thousands)
(unaudited)Three months ended December 31, 2021 Transition expenses related to San Jose expansion project $ 698 Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 74 Subtotal 772 Non-cash interest expense 3,057 Other (income) expense, net 5,010 Non-GAAP tax adjustment * (889 ) Total Other $ 7,950 * - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments. Reconciliation of GAAP Net Income to Non-GAAP Operating Income (Q4 2022 and 2021)
(in thousands)
(unaudited)Three months ended Three months ended December 31, 2022 December 31, 2021 GAAP Net income $ 128,915 $ 8,204 Share-based compensation 6,025 3,514 Amortization 2,505 2,974 Transition expenses related to San Jose expansion project 1,788 698 Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 44 74 Interest (income) expense, net 1,558 5,799 Other (income) expense, net — 5,010 Income tax expense (benefit) (117,081 ) (1,387 ) Non-GAAP Operating income $ 23,754 $ 24,886 Reconciliation of GAAP to Non-GAAP Financial Data (FY 2022)
(in thousands)
(unaudited)Non-GAAP Adjustments Share-based For the year ended December 31, 2022 GAAP Compensation Amortization Other Non-GAAP Net sales $ 646,137 $ 646,137 Gross profit 263,148 4,551 3,300 270,999 Gross margin 40.7 % 41.9 % Operating expenses 202,852 (18,443 ) (10,018 ) (3,212 ) 171,179 Operating income (loss) 60,296 22,994 10,018 6,512 ^ 99,820 Net income (loss) 166,942 22,994 10,018 (110,379 ) ^ 89,575 ^ - See table below for additional details. Other Non-GAAP Adjustments (FY 2022)
(in thousands)
(unaudited)For the year ended December 31, 2022 Transition expenses related to San Jose expansion project $ 6,202 Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 310 Subtotal 6,512 Non-cash interest expense 962 Release of valuation allowance on deferred tax assets (104,971 ) Non-GAAP tax adjustment * (12,882 ) Total Other $ (110,379 ) * - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments. Net Income per Common Share (FY 2022)
(in thousands, except per share amounts)
(unaudited)Year ended December 31, 2022 GAAP Non-GAAP Numerator: Net income $ 166,942 $ 89,575 Interest expense associated with convertible notes 10,832 9,870 Net income available to common shareholders $ 177,774 $ 99,445 Denominator: Basic weighted average shares outstanding 49,906 49,906 Effect of potentially dilutive share-based awards 734 734 Dilutive effect of 2023 Convertible Senior Notes 504 504 Dilutive effect of 2025 Convertible Senior Notes 5,521 5,521 Dilutive effect of 2027 Convertible Senior Notes (1) 8,942 6,771 Diluted weighted average shares outstanding 65,607 63,436 Net income per common share: Basic $ 3.35 $ 1.79 Diluted $ 2.71 $ 1.57 (1) The non-GAAP incremental dilutive shares includes the impact of the Company’s capped call transaction issued concurrently with our 2027 Notes, and as such, an effective conversion price of $18.46 is used when determining incremental shares to add to the dilutive share count. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, an effective conversion price of $13.98 is used when determining incremental shares to add to the dilutive share count. Reconciliation of GAAP to Non-GAAP Financial Data (FY 2021)
(in thousands, except per share amounts)
(unaudited)Non-GAAP Adjustments Share-based For the year ended December 31, 2021 GAAP Compensation Amortization Other Non-GAAP Net sales $ 583,277 $ 583,277 Gross profit 242,274 2,373 448 245,095 Gross margin 41.5 % 42.0 % Operating expenses 185,564 (12,876 ) (12,280 ) (1,918 ) 158,490 Operating income (loss) 56,710 15,249 12,280 2,366 ^ 86,605 Net income (loss) 26,038 15,249 12,280 20,082 ^ 73,649 Income (loss) per common share: Basic $ 0.53 $ 1.50 Diluted 0.49 1.43 Weighted average number of shares: Basic 49,073 49,073 Diluted 53,643 51,472 ^ - See table below for additional details. Other Non-GAAP Adjustments (FY 2021)
(in thousands)
(unaudited)For the year ended December 31, 2021 Transition expenses related to San Jose expansion project $ 2,021 Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 345 Subtotal 2,366 Non-cash interest expense 13,819 Other (income) expense, net 5,010 Non-GAAP tax adjustment * (1,113 ) Total Other $ 20,082 * - The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments. Reconciliation of GAAP Net Income to Non-GAAP Operating Income (FY 2022 and 2021)
(in thousands)
(unaudited)Year ended Year ended December 31, 2022 December 31, 2021 GAAP Net income (loss) $ 166,942 $ 26,038 Share-based compensation 22,994 15,249 Amortization 10,018 12,280 Transition expenses related to San Jose expansion project 6,202 2,021 Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 310 345 Interest (income) expense, net 9,311 26,020 Other (income) expense, net — 5,010 Income tax expense (benefit) (115,957 ) (358 ) Non-GAAP Operating income (loss) $ 99,820 $ 86,605 Reconciliation of GAAP to Non-GAAP Financial Data (Q1 2023)
(in millions, except per share amounts)
(unaudited)Non-GAAP Adjustments Guidance for the three months ending Share-based March 31, 2023 GAAP Compensation Amortization Other Non-GAAP Net sales $ 130 - $ 150 $ 130 - $ 150 Gross profit 48 - 61 1 — — 49 - 62 Gross margin 37 % - 40 % 39 % - 41 % Operating expenses 49 - 51 (5 ) (2 ) (1 ) 42 - 44 Operating income (loss) (1 ) - 10 6 2 1 8 - 19 Net income (loss) $ (1 ) - $ 8 6 2 (1 ) $ 6 - $ 15 Income (loss) per diluted common share $ (0.03 ) - $ 0.16 $ 0.12 - $ 0.28 Income per Diluted Common Share (Q1 2023)
(in millions, except per share amounts)
(unaudited)Guidance for the three months ending March 31, 2023 GAAP Non-GAAP Numerator: Net income (loss) $ (1 ) - $ 8 $ 6 - $ 15 Interest expense associated with convertible notes — 1 — 2 Net income (loss) available to common shareholders $ (1 ) - $ 9 $ 6 - $ 17 Denominator: Basic weighted average shares outstanding 50 50 50 50 Effect of potentially dilutive share-based awards 1 1 1 1 Dilutive effect of 2023 Convertible Senior Notes — — — — Dilutive effect of 2025 Convertible Senior Notes — — — 6 Dilutive effect of 2027 Convertible Senior Notes (1) — 9 — 7 Diluted weighted average shares outstanding 51 60 51 64 Net income (loss) per common share: Income (loss) per diluted common share $ (0.03 ) - $ 0.16 $ 0.12 - $ 0.28 (1) The non-GAAP incremental dilutive shares includes the impact of the Company’s capped call transaction issued concurrently with our 2027 Notes, and as such, an effective conversion price of $18.46 is used when determining incremental shares to add to the dilutive share count. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, an effective conversion price of $13.98 is used when determining incremental shares to add to the dilutive share count. Reconciliation of GAAP Net Income to Non-GAAP Operating Income (Q1 2023)
(in millions)
(unaudited)Guidance for the three months ending March 31, 2023 GAAP Net income (loss) $ (1 ) - $ 8 Share-based compensation 6 - 6 Amortization 2 - 2 Interest expense, net 1 - 1 Income tax expense (benefit) — - 1 Other — - 1 Non-GAAP Operating income $ 8 - $ 19 Note: Amounts may not calculate precisely due to rounding.
