Veeco: Fiscal 1Q11 Financial Results

Veeco Instruments Inc. announced its financial results for the first quarter ended March 31, 2011.

All results presented herein are for Veeco’s Continuing Operations which excludes the Metrology business sold to Bruker Corporation on October 7, 2010.
                
John R. Peeler, Veeco’s Chief Executive Officer, commented: "Veeco reported a strong first quarter, with revenues of $255 million, gross margin of 51% and non-GAAP net income of $57 million, all in line with our guidance. As expected, revenues were down 15% sequentially, but increased 89% from the prior year first quarter. LED & Solar revenues were $215 million and Data Storage revenues were $40 million. Veeco’s first quarter bookings totaled $231 million," continued Mr. Peeler. "With another solid quarter in LED & Solar of $198 million and Data Storage orders were $33 million. We continued to experience strong demand for MOCVD systems and, while China remained the majority of our bookings, we also received orders from key customers in Taiwan, Korea and the U.S."

The Company’s Q1 2011 book-to-bill ratio was .91 to 1, and quarter-end backlog was $530 million. Veeco’s operating cash flow during Q1 was extremely strong at $75 million, resulting in cash and short term investments at the end of the quarter of $779 million.

Fast Adoption of MaxBright MOCVD System
In February, Veeco announced its newest generation MOCVD system, the TurboDisc MaxBright Multi-Reactor (‘cluster’) MOCVD System. Mr. Peeler commented: "Our customers are excited about MaxBright, as evidenced by the strong quoting and purchase order activity underway with key LED customers in all regions. During the first quarter, we shipped three MaxBright 4-chamber systems. Orders have been received from three of the top tier Taiwanese LED makers, as well as from key customers in Korea and China. Customers are clearly recognizing that we are helping to enable the industry’s transition to LED lighting with a unique value position and the most productive MOCVD systems on the market."

Veeco Announces Redemption of 4.125%
Convertible Subordinated Notes Due 2012
Veeco also announced that it is calling for redemption all of its outstanding 4.125% Convertible Subordinated Notes due 2012. Approximately $91.6 million aggregate principal amount of the Notes were outstanding as of April 20, 2011.

Second Quarter 2011 Guidance
Veeco’s second quarter 2011 revenue is currently forecasted to be between $255 and $285 million. Earnings per share are currently forecasted to be between $1.08 to $1.32 on a GAAP basis and $1.20 to $1.45 on a non-GAAP basis. Please refer to the attached financial table for more details. Note that the EPS impact of the note redemption has been included in this guidance.

"We currently forecast Q2 2011 orders at 25% or more above the Q1 level, and we have visibility for continued order strength through Q3," added Mr. Peeler. "We are experiencing extremely strong levels of quoting activity, very positive customer reaction to MaxBright, and a large number of multi-system deals currently on the table. We expect MOCVD order patterns to remain lumpy from quarter to quarter depending upon the timing of customer deposits. We see order strength continuing in China as it builds its LED infrastructure for solid state lighting, and quoting activity in Korea and Taiwan is also picking up with improved utilization rates being reported at key customers. Orders for our Data Storage products should also improve sequentially as customer quoting activity for technology and capacity buys are improving to support anticipated hard drive unit growth in the second half of 2011."

Full Year 2011 Guidance
"Veeco’s $530 million in backlog, combined with our forecasted Q2 revenue increase and very positive order outlook give us even greater confidence in our full year 2011 guidance of over $1 billion in revenues and non-GAAP earnings per share of greater than $5.00," continued Mr. Peeler. "We are optimistic about the future and confident that we are well positioned from a technology, product, and operational standpoint to grow our LED & Solar and Data Storage businesses in 2011 and beyond."