Veeco: Fiscal 2Q09 Financial Results

For data storage process equipment only

 
  
Veeco Instruments, Inc. announced its financial results for the second quarter and six months ended June 30, 2009.                                                                 
John R. Peeler, Veeco’s Chief Executive Officer, commented: “From a revenue and loss perspective, the second quarter remained challenging, but was within our guidance range and was an improvement from the first quarter of 2009. Veeco is on-track with cost and workforce reduction plans and outsourced manufacturing initiatives. We exited our Camarillo, CA saw and lapper manufacturing site and increased Asian sourcing. Due to solid performance in accounts receivable, inventory management and other operating items, Veeco’s cash balance at the end of the second quarter was $98 million, an increase of $5 million over the prior quarter.”

Mr. Peeler continued: “Veeco’s second quarter orders were $99 million, up 86% sequentially from the $53 million reported in the first quarter. LED & Solar orders were $57 million (58% of total) doubling sequentially as LED manufacturers ramp production for TV and laptop backlighting applications. Veeco received several large orders for our TurboDisc metal organic chemical vapor deposition (MOCVD) systems from key Korean and Taiwanese LED manufacturers. Data Storage orders improved 147% sequentially to $19 million (19% of total), with hard drive customers resuming both technology and capacity purchases. Second quarter orders included four NEXUS CVD Systems, which help our customers achieve higher areal densities. While data storage order rates are still depressed when compared with historical levels for this business, the Q2 pick-up, combined with significant improvements to our cost structure, allows us to forecast a return to profitability for this business in the third quarter. Metrology orders were $23 million (23% of total), up 38% sequentially due to new product traction, particularly for our Dimension Icon and BioScope Catalyst AFMs, and some improvement in scientific research spending.”

Business Outlook and Guidance
Mr. Peeler commented: “We are pleased with Veeco’s accomplishments during what has been a difficult first half of 2009. We swiftly restructured the Company, while remaining focused on meeting our customers’ next generation technology and product requirements. Although cautious about overall economic conditions, we are encouraged by the sequential bookings improvement in all three businesses. Veeco’s backlog at June 30, 2009 was $160 million.”

“The positive trends we experienced in the second quarter in our MOCVD business have accelerated into the beginning of this quarter driven by key customers’ investments in LED capacity for backlighting applications,” continued Mr. Peeler. “We have already received orders for more than $110 million in MOCVD systems during the month of July from multiple customers in APAC. As a result of this pace of orders, we currently believe that third quarter LED & Solar bookings will be between $125 to $175 million, and, as a result, that Veeco’s total orders for the third quarter will be significantly higher than second quarter orders.”

Veeco’s third quarter 2009 revenues are currently forecasted to be between $80-88 million. Veeco is currently forecasting a loss per share of between ($0.25) and ($0.13) on a GAAP basis for the third quarter of 2009. Veeco’s third quarter earnings per share is currently forecasted to be between ($0.02) to $0.05 on a non-GAAP basis.

“Veeco’s outlook for the remainder of the year looks better than a quarter ago, primarily due to the strong LED industry demand,” added Mr. Peeler. “We are currently expecting that Veeco will return to EBITA profitability in the third quarter. Since the global economic situation remains uncertain, it is our intention to continue to carefully manage our expenses, while at the same time making selected investments that are required to support the MOCVD production ramp as well as our new CIGS solar equipment business.” Veeco currently anticipates that its 2009 revenues will be in the range of $310-325 million.