Veeco Reports Fourth Quarter and Fiscal Year 2017 Financial Results

Fourth Quarter 2017 Highlights:

  • Revenues of $143.4 million, compared with $93.6 million in the same period last year
  • GAAP net loss of $5.6 million, or $0.12 loss per share
  • Non-GAAP net income of $9.1 million, or $0.19 per diluted share

Full Year 2017 Highlights:

  • Revenues of $484.8 million
  • GAAP net loss of $44.8 million, or $1.01 loss per share
  • Non-GAAP net income of $23.4 million, or $0.53 per diluted share

PLAINVIEW, N.Y., Feb. 12, 2018 (GLOBE NEWSWIRE) — Veeco Instruments Inc. (Nasdaq:VECO) today announced financial results for its fourth quarter and fiscal year ended December 31, 2017.  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 ‘17 Q4 ‘16  2017
 2016
Revenue $143.4 $93.6 $484.8 $332.5
Net income (loss) ($5.6) ($5.0) ($44.8) ($122.2)
Diluted earnings (loss) per share ($0.12) ($0.13) ($1.01) ($3.11)
           
    4th Quarter
Full Year
Non-GAAP Results Q4 ‘17 Q4 ‘16  2017
 2016
Net income (loss) $9.1 $3.8 $23.4 ($11.3)
Operating income (loss) $10.5 $3.3 $31.3 ($8.5)
Diluted earnings (loss) per share $0.19 $0.09 $0.53 ($0.29)

“2017 was a transformational year for Veeco.  We diversified our revenue base through the acquisition of Ultratech, completed a major manufacturing consolidation, and ended the year with strong bookings and historically high backlog,” commented John R. Peeler, Chairman and Chief Executive Officer.  “Sales growth in the fourth quarter was driven primarily by shipment of our MOCVD and Laser Anneal systems, and we announced a large multi tool order for our EPIK® 868 from Focus Lightings for the production of high-volume light emitting diodes (LEDs).”

“Entering 2018, we expect to grow in all of our target  markets, and we are seeing particularly healthy demand  in  Advanced Packaging, MEMS and RF Filter and Front-End Semiconductor markets,” continued Mr. Peeler.

“Lastly, as we announced on February 8, 2018, I am pleased to report that we have reached a mutually agreed settlement of the pending patent disputes with AMEC and SGL Carbon, and all legal actions related to this matter will be dismissed or withdrawn. We are back to normal operations in our MOCVD business,” concluded Mr. Peeler.

Guidance and Outlook

The following guidance is provided for Veeco’s first quarter 2018:

  • Revenue is expected in the range of $140 million to $165 million
  • Non-GAAP operating income is expected in the range of $2 million to $10 million
  • GAAP earnings (loss) per share are expected in the range of ($0.50) to ($0.32)
  • Non-GAAP earnings (loss) per share are expected in the range of ($0.04) to $0.14

Please refer to the tables at the end of this press release for further details.

Conference Call Information

A conference call reviewing these results has been scheduled for today, February 12, 2018 starting at 5:00pm ET. To join the call, dial 1-800-239-9839 (toll free) or 1-323-794-2551 and use passcode 3939388. 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 beginning at 8:00pm ET this evening. We will post an accompanying slide presentation to our website prior to the beginning of the call.

About Veeco

Veeco (NASDAQ:VECO) is a leading manufacturer of innovative semiconductor process equipment. Our proven MOCVD, lithography, laser annealing, ion beam and single wafer etch & clean technologies play an integral role in producing LEDs for solid-state lighting and displays, and in the fabrication of advanced semiconductor devices. With equipment designed to maximize performance, yield and cost of ownership, Veeco holds technology leadership positions in all these served markets. To learn more about Veeco’s innovative equipment and services, visit www.veeco.com.

Forward-looking Statements

To the extent that this news release discusses expectations 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 risks discussed in the Business Description and Management’s Discussion and Analysis sections of Veeco’s Annual Report on Form 10-K for the year ended December 31, 2016 and in our subsequent quarterly reports on Form 10-Q, current reports on Form 8-K and press releases. Veeco does not undertake any obligation to update any forward-looking statements to reflect future events or circumstances after the date of such statements.

financial tables attached-

Veeco Contacts:  
   
Investors: Media:
Anthony Bencivenga 516-677-0200 x1272 David Pinto 408-325-6157
abencivenga@veeco.com dpinto@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,  
   
    2017     2016     2017     2016    
Net sales $ 143,432   $ 93,609   $ 484,756   $ 332,451    
Cost of sales   85,095     57,601     300,438     199,593    
Gross profit   58,337     36,008     184,318     132,858    
Operating expenses, net:                          
Research and development   24,318     17,471     81,987     81,016    
Selling, general, and administrative   28,675     19,412     100,250     77,642    
Amortization of intangible assets   13,753     3,434     35,475     19,219    
Restructuring   2,246     1,646     11,851     5,640    
Acquisition costs   1,510         17,786        
Asset impairment       (142 )   1,139     69,520    
Other, net   (165 )   (660 )   (392 )   223    
Total operating expenses, net   70,337     41,161     248,096     253,260    
Operating income (loss)   (12,000 )   (5,153 )   (63,778 )   (120,402 )  
Interest income (expense), net   (4,753 )   245     (17,122 )   958    
Income (loss) before income taxes   (16,753 )   (4,908 )   (80,900 )   (119,444 )  
Income tax expense (benefit)   (11,137 )   90     (36,107 )   2,766    
Net income (loss) $ (5,616 ) $ (4,998 ) $ (44,793 ) $ (122,210 )  
                           
Income (loss) per common share:          
Basic $ (0.12 ) $ (0.13 ) $ (1.01 ) $ (3.11 )  
Diluted $ (0.12 ) $ (0.13 ) $ (1.01 ) $ (3.11 )  
           
Weighted average number of shares:          
Basic   47,037     39,267     44,174     39,340    
Diluted   47,037     39,267     44,174     39,340    
           

 

   
Veeco Instruments Inc. and Subsidiaries  
Condensed Consolidated Balance Sheets  
(in thousands)  
       
  December 31, December 31,  
  2017   2016  
       
Assets       
Current assets:      
Cash and cash equivalents $ 279,736   $ 277,444  
Restricted cash   847      
Short-term investments   47,780     66,787  
Accounts receivable, net   98,866     58,020  
Inventories   120,266     77,063  
Deferred cost of sales   16,060     6,160  
Prepaid expenses and other current assets   33,437     16,034  
Total current assets   596,992     501,508  
Property, plant and equipment, net   85,058     60,646  
Intangible assets, net   369,843     58,378  
Goodwill   307,131     114,908  
Deferred income taxes   2,953     2,045  
Other assets   25,310     21,047  
Total assets $ 1,387,287   $ 758,532  
       
Liabilities and stockholders’ equity       
Current liabilities:      
Accounts payable $ 50,318   $ 22,607  
Accrued expenses and other current liabilities   60,339     33,201  
Customer deposits and deferred revenue   108,953     85,022  
Income taxes payable   3,846     2,311  
Current portion of long-term debt       368  
Total current liabilities   223,456     143,509  
Deferred income taxes   36,845     13,199  
Long-term debt   275,630     826  
Other liabilities   10,643     6,403  
Total liabilities   546,574     163,937  
       
Total stockholders’ equity   840,713     594,595  
       
Total liabilities and stockholders’ equity $ 1,387,287   $ 758,532  
       

 

     
Veeco Instruments Inc. and Subsidiaries    
Reconciliation of GAAP to Non-GAAP Financial Data    
(in thousands, except per share amounts)    
(unaudited)    
                   
      Non-GAAP Adjustments      
Three months ended December 31, 2017    GAAP
  Share-Based
Compensation

  Amortization   Other
  Non-GAAP    
Net sales   $   143,432                   $ 143,432      
Gross profit       58,337   607         537       59,481      
Gross margin       40.7 %           41.5 %    
Research and development       24,318   (971 )           23,347      
Selling, general, and administrative and Other       28,510   (2,668 )       (196 )     25,646      
Net income (loss)       (5,616 ) 4,420     13,753   (3,460 )     9,097      
                   
Income (loss) per common share:                  
Basic   $   (0.12 )         $ 0.19      
Diluted       (0.12 )           0.19      
Weighted average number of shares:                  
Basic       47,037             47,109      
Diluted       47,037             47,208      
                   
Veeco Instruments Inc. and Subsidiaries    
Other Non-GAAP Adjustments    
(in thousands)    
(unaudited)    
Three months ended December 31, 2017                  
Restructuring               2,073      
Acquisition related               1,510      
Release of inventory fair value step-up associated with the Ultratech purchase accounting   440      
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting   293      
Non-cash interest expense               2,805      
Non-GAAP tax adjustment *               (10,581 )    
Total Other               (3,460 )    
                   
* – The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments, as well as the exclusion of certain tax benefits attributed to the change in U.S. tax laws.  
                   
These 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 incremental transaction-related compensation.

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.

 
   

 

     
Veeco Instruments Inc. and Subsidiaries    
Reconciliation of GAAP to Non-GAAP Financial Data    
(in thousands, except per share amounts)    
(unaudited)    
                   
      Non-GAAP Adjustments      
Three months ended December 31, 2016   GAAP
  Share-based
Compensation
  Amortization   Other   Non-GAAP    
Net sales   $ 93,609               $ 93,609      
Gross profit     36,008   316       362     36,686      
Gross margin     38.5 %           39.2 %    
Research and development     17,471   (292 )         17,179      
Selling, general, and administrative and Other     18,752   (2,971 )     (44 )   15,737      
Net income (loss)     (4,998 ) 3,579   3,434   1,740     3,755      
                   
Income (loss) per common share:                  
Basic   $ (0.13 )         $ 0.09      
Diluted     (0.13 )           0.09      
Weighted average number of shares:                  
Basic     39,267             39,579      
Diluted     39,267             39,990      
                   
Veeco Instruments Inc. and Subsidiaries    
Other Non-GAAP Adjustments    
(in thousands)    
(unaudited)    
Three months ended December 31, 2016                  
Restructuring               1,646      
Acquisition related               44      
Asset impairment               (142 )    
Accelerated depreciation               362      
Reclassification of cumulative translation gain from subsidiary liquidation         (429 )    
Non-GAAP tax adjustment *               259      
Total Other               1,740      
                   
* – The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.      
                   
These 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 incremental transaction-related compensation.

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.

 
   

 

     
Veeco Instruments Inc. and Subsidiaries    
Reconciliation of GAAP Net Income (loss) to Non-GAAP Operating Income (loss)    
(in thousands)    
(unaudited)    
        Three months ended Three months ended    
         December 31, 2017     December 31, 2016       
GAAP Net income (loss)       $   (5,616 ) $   (4,998 )    
Share-based compensation           4,420       3,579      
Amortization           13,753       3,434      
Restructuring           2,073       1,646      
Acquisition related           1,510       44      
Release of inventory fair value step-up associated with the Ultratech purchase accounting     440       –       
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting     293       –       
Asset impairment           –        (142 )    
Accelerated depreciation           –        362      
Reclassification of cumulative translation gain from subsidiary liquidation       –        (429 )    
Interest (income) expense           4,753       (245 )    
Income tax expense (benefit)           (11,137 )     90      
Non-GAAP Operating Income (loss)       $   10,489   $   3,341      
               
This table includes 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 incremental transaction-related compensation.

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.

 
   

 

     
Veeco Instruments Inc. and Subsidiaries    
Reconciliation of GAAP to Non-GAAP Financial Data    
(in thousands, except per share amounts)    
(unaudited)    
                   
      Non-GAAP Adjustments      
For the year ended December 31, 2017   GAAP
  Share-Based
Compensation
    Amortization   Other     Non-GAAP    
Net sales   $ 484,756                   $ 484,756      
Gross profit     184,318   2,505         10,075       196,898      
Gross margin     38.0 %           40.6 %    
Research and development     81,987   (2,957 )           79,030      
Selling, general, and administrative and Other     99,858   (12,851 )       (466 )     86,541      
Net income (loss)     (44,793 ) 24,396     35,475   8,368       23,446      
                   
Income (loss) per common share:                  
Basic   $ (1.01 )         $ 0.53      
Diluted     (1.01 )           0.53      
Weighted average number of shares:                  
Basic     44,174             44,247      
Diluted     44,174             44,486      
                   
Veeco Instruments Inc. and Subsidiaries    
Other Non-GAAP Adjustments    
(in thousands)    
(unaudited)    
For the year ended December 31, 2017                  
Restructuring               9,971      
Acquisition related               13,583      
Release of inventory fair value step-up associated with the Ultratech purchase accounting   9,664      
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting   695      
Asset impairment         1,139      
Accelerated depreciation               180      
Non-cash interest expense               10,446      
Non-GAAP tax adjustment *               (37,310 )    
Total Other               8,368      
                   
* – The ‘with or without’ method is utilized to determine the income tax effect of all non-GAAP adjustments, as well as the exclusion of certain tax benefits attributed to the change in U.S. tax laws and the release of FIN48 reserves.  
                   
These 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 incremental transaction-related compensation.

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.

 
   

 

     
Veeco Instruments Inc. and Subsidiaries    
Reconciliation of GAAP to Non-GAAP Financial Data    
(in thousands, except per share amounts)    
(unaudited)    
                   
      Non-GAAP Adjustments      
For the year ended December 31, 2016   GAAP
  Share-Based
Compensation
    Amortization   Other     Non-GAAP    
Net sales   $ 332,451                   $ 332,451      
Gross profit     132,858   1,956         716       135,530      
Gross margin     40.0 %           40.8 %    
Research and development     81,016   (3,324 )           77,692      
Selling, general, and administrative and Other     77,866   (10,433 )       (1,537 )     65,896      
Net income (loss)     (122,210 ) 15,713     19,219   75,954       (11,324 )    
                   
Income (loss) per common share:                  
Basic   $ (3.11 )         $ (0.29 )    
Diluted     (3.11 )           (0.29 )    
Weighted average number of shares:                  
Basic     39,340             39,340      
Diluted     39,340             39,340      
                   
Veeco Instruments Inc. and Subsidiaries    
Other Non-GAAP Adjustments    
(in thousands)    
(unaudited)    
For the year ended December 31, 2016                  
Restructuring               5,640      
Acquisition related               232      
Asset impairment         69,520      
Accelerated depreciation   716      
Pension termination   1,305      
Reclassification of cumulative translation gain from subsidiary liquidation         (429 )    
Non-GAAP tax adjustment *               (1,030 )    
Total Other               75,954      
                   
* – The ‘with or without’ method is utilized to determine the income tax effect of all non-GAAP adjustments.      
                   
These 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 incremental transaction-related compensation.

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.

 
   

 

     
Veeco Instruments Inc. and Subsidiaries    
Reconciliation of GAAP Net Income (loss) to Non-GAAP Operating Income (loss)    
(in thousands)    
(unaudited)    
        Year ended Year ended    
        December 31, 2017   December 31, 2016      
GAAP Net income (loss)       $ (44,793 ) $ (122,210 )    
Share-based compensation         24,396     15,713      
Amortization         35,475     19,219      
Restructuring         9,971     5,640      
Acquisition related         13,583     232      
Release of inventory fair value step-up associated with the Ultratech purchase accounting   9,664          
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting   695          
Asset impairment         1,139     69,520      
Accelerated depreciation         180     716      
Pension termination             1,305      
Reclassification of cumulative translation gain from subsidiary liquidation         (429 )    
Interest (income) expense         17,122     (958 )    
Income tax expense (benefit)         (36,107 )   2,766      
Non-GAAP Operating Income (loss)       $ 31,325   $ (8,486 )    
               
This table includes 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 incremental transaction-related compensation.

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.

 
   

 

   
Veeco Instruments Inc. and Subsidiaries  
Reconciliation of GAAP to Non-GAAP Financial Data  
(in millions, except per share amounts)  
(unaudited)  
                                         
              Non-GAAP Adjustments          
Guidance for the three months ending March 31, 2018
  GAAP   Share-based
Compensation
    Amortization   Other   Non-GAAP  
Net sales     $140  $165                   $140  $165    
                                         
Gross profit   47   58     1           48   59    
Gross margin   33%  35%                         34%  36%  
                                         
Net income (loss) $(23) $(15)   4     13   4   $(2) $6    
                                         
Income (loss) per diluted common share $(0.50) $(0.32)                       $(0.04) $0.14    
Weighted average number of shares       47     47                           47     47    
                                         
Veeco Instruments Inc. and Subsidiaries  
Reconciliation of GAAP Net Income (loss) to Non-GAAP Operating Income (Loss)  
(in millions)  
(unaudited)  
                                         
Guidance for the three months ending March 31, 2018                                    
GAAP Net income (loss)                       $(23) $(15)  
Share-based compensation                          4    
Amortization                         13   13    
Restructuring                      1    
Acquisition related                                1    
Interest expense, net                                5    
Income tax expense (benefit)                                1    
Non-GAAP Operating Income                             $2  $10    
                                         
Note:  Amounts may not calculate precisely due to rounding.                                    
                                         
   
These table includes 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 incremental transaction-related compensation.

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.

 
   

 

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