May 5, 2014 - Veeco Instruments announced its financial results for the first quarter ended March 31, 2014. Veeco reports its results on a U.S. generally accepted accounting principles ("GAAP") basis, and also provides results excluding certain items.
Veeco's first quarter GAAP results include a one-time gain of $29 million from the reversal of Synos acquisition related contingency accruals since we determined that the post-closing milestones necessary to trigger such contingency payments were not expected to be achieved.
GAAP Results ($M except per share data)
Q1 '14 Q1 '13
Revenues $90.8 $61.8
Net income (loss) $19.2 ($10.1)
Per share income (loss) $0.48 ($0.26)
Non-GAAP Results ($M except per share data)
Q1 '14 Q1 '13
Adjusted EBITA ($2.7) ($15.7)
Net income (loss) ($2.4) ($7.5)
Per share income (loss) ($0.06) ($0.19)
"Veeco's first quarter top and bottom line performance improved meaningfully from the fourth quarter of last year," commented John R. Peeler, Chairman and Chief Executive Officer. "We delivered $91 million in revenue, up 24% from the fourth quarter of 2013, driven primarily by an increase in LED & Solar revenue to $71 million ($64 million in MOCVD). First quarter 2014 Data Storage revenues were $20 million, up from $17 million in the fourth quarter of 2013. EBITA loss was $3 million, significantly improved from last quarter's loss, benefiting from higher volume, an improvement in gross margins to 37%, and lower operating spending. As forecasted, our investments in next generation products and in our growth businesses caused cash to decline modestly during the quarter. Yet our cash and investments balance remains strong at $483 million."
Peeler continued, "Veeco's first quarter 2014 orders improved by 21% from the fourth quarter of 2013 to $103 million, the highest level we have reported in nearly two years. This increase was driven by a 59% sequential improvement in MOCVD orders to $83 million, which represents the highest amount booked since the third quarter of 2011. Orders were received from top LED customers throughout Asia and elsewhere." First quarter 2014 Data Storage and MBE orders each declined from the fourth quarter of 2013, to $15 million and $5 million, respectively.
Second Quarter 2014 Guidance and Outlook
Veeco's second quarter 2014 revenue is currently forecasted to be between $87 million and $97 million. Earnings per share are currently forecasted to be between ($0.46) to ($0.36) on a GAAP basis, and ($0.23) to ($0.14) on a non-GAAP basis. Please refer to the attached financial table for more details.
Peeler commented, "After a long downturn in our MOCVD business, LED fab utilization rates have improved to high levels at most key accounts and LED adoption is happening faster than many had expected. Our customers are also reporting better market demand for LED backlighting products. It is encouraging to see that our leading customers are beginning to place orders for capacity expansions. We currently anticipate that Veeco's second quarter 2014 orders will be similar to or better than first quarter orders. Yet, the timing and magnitude of key customer expansions could cause MOCVD orders to be lumpy and somewhat unpredictable on a quarterly basis, and we lack the visibility to see into the second half of the year. We continue to invest in MOCVD product and technology development to further improve our customers' cost of ownership and manufacturing capability."
Peeler concluded "We are pleased to have made progress improving Veeco's profitability and remain focused on our strategy to turn around our performance: 1) developing and launching game-changing new products that enable cost effective LED lighting, flexible OLED encapsulation and other emerging technologies; 2) improving customer cost of ownership as well as our gross margins; 3) driving process improvement initiatives to make us more efficient; and 4) lowering expenses."