Veeco: Fiscal 3Q09 Financial Results

Veeco Instruments, Inc. announced its financial results for the third quarter and nine months ended September 30, 2009.

John R. Peeler, Veeco’s Chief Executive Officer, commented: “I am pleased to report that our third quarter performance exceeded guidance on every metric, and that Veeco has quickly returned to profitability. Third quarter revenue was $99 million, well above our guidance of $80-88 million, and gross margins increased over 700 basis points sequentially to 41.4%. Veeco’s swift restructuring actions decreased operating expenses by 19% in the third quarter versus a year ago. We delivered EBITA of $9 million, positive GAAP earnings per share, and non-GAAP EPS of $0.16, significantly ahead of guidance. All three of our businesses, LED & Solar, Data Storage, and Metrology, returned to EBITA profitability in the third quarter. Veeco’s third quarter 2009 cash balance increased $12 million sequentially, resulting in a positive net cash position. We are executing to plan and doing what we said we would do.”

“We completed the highest bookings quarter in Veeco’s history, with third quarter orders of approximately $226 million: $179M in LED & Solar (80% of total orders), $17M in Data Storage (7% of total) and $29M in Metrology (13% of total),” continued Mr. Peeler. “We have seen an unprecedented demand from LED manufacturers in China, Korea and Taiwan for our TurboDisc Metal Organic Chemical Vapor Deposition (MOCVD) systems as they ramp production for laptop and TV backlighting. Veeco MOCVD systems were also selected by two leading U.S. LED manufacturers to ramp production for general illumination. Momentum continued in our CIGS solar business in the third quarter, with a second key customer win for our FastFlex Web Coating Systems and a repeat multi-million dollar order for thermal deposition components from a leading CIGS manufacturer. We experienced a 27% sequential improvement in Metrology orders, driven by new product success and a modest pick-up in activity from both research and industrial customers.”

Q4’09 Guidance
Veeco’s fourth quarter 2009 revenues are currently forecasted to be between $120-$130 million, with earnings per share between $0.25 to $0.35 on a GAAP basis and $0.29 to $0.35 on a non-GAAP basis. Please refer to the attached financial tables for more details. Veeco currently anticipates a positive book-to-bill ratio for the fourth quarter. Veeco’s 2009 revenue guidance is now $353-$363 million, up from previous guidance of $310-$325 million.

Outlook
Regarding Veeco’s outlook, Mr. Peeler commented: “Veeco’s backlog at the end of September was $287 million, with $239M in LED & Solar. We continue to experience positive business trends in our MOCVD business, with a high level of demand for our K465 MOCVD System due to its industry-leading productivity. We are ramping up our manufacturing capacity to satisfy customer demand. While it is challenging to predict quarterly bookings trends in this dynamic environment, it is clear to us that MOCVD quoting activity remains well above historic levels.”

Mr. Peeler added: “As we look toward the future, we believe Veeco is at the beginning of a multi-year MOCVD tool investment cycle as LEDs increase their penetration in laptop and TV backlighting and gain momentum for general illumination. We are also seeing strong interest in our thermal deposition systems for manufacturing of CIGS solar cells, and believe that Veeco is well positioned to capture share in this market. In addition, overall business conditions in Data Storage and Metrology appear to be improving from the trough levels we experienced earlier this year, and we remain well aligned with customers’ technology roadmaps.”