Veeco: Fiscal 4Q10 Financial Results

Veeco Instruments Inc. announced its financial results for the fourth quarter and full-year ended December 31, 2010.

Veeco reports its results on a U.S. GAAP basis, and also provides results excluding certain items. 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: "The fourth quarter of 2010 was the best in our history, and we are extremely proud of our performance. Revenues were $300 million, gross margin was 51% and net income was $97 million. Veeco’s revenues grew 8% sequentially and 152% from the fourth quarter of last year. Both Veeco segments delivered excellent performance: LED & Solar revenues were up 6% sequentially to a record $258 million, and Data Storage revenues were up 21% to $42 million, our best quarter since 2008. Full year 2010 results were also at record levels, with revenue of $933 million and net income of $261 million. These results were achieved through a combination of world-class products, a focus on high-growth market opportunities, operational excellence, our flexible manufacturing strategy, and a deep commitment to satisfying our global customers."

"Veeco’s fourth quarter bookings totaled $295 million with another very strong quarter in LED & Solar of $253 million, which was up about 4% sequentially, continued Mr. Peeler. "Orders for MOCVD systems were placed by twenty customers across all regions, with strength continuing in China. Data Storage orders were $42 million, up 20% sequentially as technology buys for new Veeco deposition systems continue."

The Company’s Q4 2010 book-to-bill ratio was .98 to 1, and quarter end backlog was $555 million.

On August 24th, Veeco announced that its Board of Directors had authorized the repurchase of up to $200 million of the Company’s common stock through August 2011. During the fourth quarter, Veeco purchased 189,218 shares of its common stock at an average price of $34.33 per share, for a total of approximately $6.5 million bringing the total purchased under the Company’s share repurchase program during 2010 to $38 million, or about 1.1 million shares.

Veeco Launches MaxBright MOCVD System
Mr. Peeler commented: "We currently estimate that the total available market for MOCVD from 2011 through 2015 is greater than 5,000 reactors. In order to capitalize on this opportunity, drive our business, and continue to gain market share, today we launched the TurboDisc MaxBright Multi-reactor (‘cluster’) MOCVD system. By dramatically accelerating our new product roadmap to create MaxBright, the most productive MOCVD system on the market, Veeco will help enable the industry’s transition to LED lighting."

First Quarter and Full-Year 2011 Guidance
Veeco’s first quarter 2011 revenue is currently forecasted to be between $215 and $265 million. Earnings per share are currently forecasted to be between $0.94 to $1.31 on a GAAP basis and $1.02 to $1.39 on a non-GAAP basis. Please refer to the attached financial table for more details.

Commenting on Q1 2011 guidance, Mr. Peeler stated: "Q1 2011 revenues will be lower than Q4 2010 because we are planning to ship 12-20 MOCVD reactors in the new MaxBright ‘cluster’ format, and will not be recording any revenue on these systems in the first quarter. Timing of revenue is also being impacted by the longer order-to-revenue cycle times associated with the high percentage of business currently coming from China, primarily due to customer facility readiness. The average time to convert orders to revenue is currently several months longer in China than in other regions."

"With starting backlog of $555 million, and anticipating strong first half 2011 bookings, we currently forecast that Veeco’s 2011 revenues will be greater than $1 billion, resulting in 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."