UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8‑K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):  February 11, 2019

VEECO INSTRUMENTS INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation)

0‑16244
(Commission
File Number)

11‑2989601
(IRS Employer
Identification No.)

 

Terminal Drive, Plainview, New York 11803

(Address of principal executive offices)

(516) 677‑0200

 (Registrant’s telephone number, including area code)

Not applicable

 (Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8‑K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐   Soliciting material pursuant to Rule 14a‑12 under the Exchange Act (17 CFR 240.14a‑12)

☐   Pre-commencement communications pursuant to Rule 14d‑2(b) under the Exchange Act (17 CFR 240.14d‑2(b))

☐   Pre-commencement communications pursuant to Rule 13e‑4(c) under the Exchange Act (17 CFR 240.13e‑4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b‑2 of the Securities Exchange Act of 1934 (§240.12b‑2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 2.02  Results of Operations and Financial Condition.

On February 11, 2019,  Veeco Instruments Inc. issued a press release announcing its financial results for the quarter and year ended December 31, 2018.  In connection with the release and the related conference call, Veeco posted a presentation relating to its fourth quarter 2018 financial results on its website (www.veeco.com).  Copies of the press release and presentation are furnished as Exhibit 99.1 and Exhibit 99.2 to this report.

Item 9.01  Financial Statements and Exhibits.

(d)     Exhibits .

 

 

 

Exhibit

  

Description

 

 

 

99.1

 

Press release issued by Veeco dated February 11, 2019

 

 

 

99.2

 

Veeco  Q4 2018 Conference Call, February 11, 2019

 

The information in this report, including the exhibits, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section, nor shall this information or these exhibits be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

EXHIBIT INDEX

 

 

 

Exhibit

  

Description

 

 

 

99.1

 

Press release issued by Veeco dated February 11, 2019

 

 

 

99.2

 

Veeco Q4 2018 Conference Call, February 11, 2019

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

February 11, 2019

VEECO INSTRUMENTS INC.

 

 

 

By:

/s/ Gregory A. Robbins

 

Name: Gregory A. Robbins

 

Title: Senior Vice President and General Counsel

 

2

EXHIBIT 99.1

PICTURE 1

 

VEECO REPORTS FOURTH QUARTER AND FISCAL YEAR 2018 FINANCIAL RESULTS

 

Fourth Quarter 2018 Highlights:

 

·

Revenues of $99.0 million, compared with $139.7 million in the same period last year

·

GAAP net loss of $144.7 million, or $3.11 loss per diluted share

·

Non-GAAP net loss of $7.5 million, or $0.16 loss per diluted share

 

Plainview, N.Y., February 11, 2019 -- Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its fourth quarter and fiscal year ended December 31, 2018. 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 '18

 

Q4 '17

 

2018

   

2017

Revenue

 

$

99.0

 

$

139.7

 

$

542.1

 

$

475.7

Net income (loss)

 

$

(144.7)

 

$

(8.5)

 

$

(407.1)

 

$

(51.4)

Diluted earnings (loss) per share

 

$

(3.11)

 

$

(0.18)

 

$

(8.63)

 

$

(1.16)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4th Quarter

 

Full Year

Non-GAAP Results

    

Q4 '18

 

Q4 '17

 

2018

 

2017

Net income (loss)

 

$

(7.5)

 

$

6.0

 

$

14.2

 

$

16.8

Operating income (loss)

 

$

(6.9)

 

$

7.3

 

$

23.2

 

$

23.2

Diluted earnings (loss) per share

 

$

(0.16)

 

$

0.13

 

$

0.30

 

$

0.38

 

Based on a reduction in Veeco’s stock price during the fourth quarter, the Company recorded a goodwill impairment charge of $123 million for GAAP results.  This is a non-cash charge and does not affect liquidity, day to day operations or Non-GAAP results of the company. 

 

"Commoditization of the MOCVD market for LEDs in China has reduced our revenue significantly, and is reflected in our fourth quarter results,” commented William J. Miller, Ph.D., Chief Executive Officer.  “However, we are excited about our future as we see order activity in leading edge, Front-End Semiconductor and exciting growth opportunities in Compound Semiconductor and Advanced Packaging.”

1

 

 

 

Guidance and Outlook

 

The following guidance is provided for Veeco’s first quarter 2019:

 

·

Revenue is expected in the range of $85 million to $105 million

·

Non-GAAP operating income (loss) is expected in the range of ($12) million to ($3) million

·

GAAP earnings (loss) per share are expected in the range of ($0.59) to ($0.39)  

·

Non-GAAP earnings (loss) per share are expected in the range of ($0.30) to ($0.10)  

 

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 11, 2019 starting at 5:00pm ET. To join the call, dial 1-800-239-9838 (toll free) or 1-929-477-0448 and use passcode 8815152. 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.

 

New Accounting Standard

 

The Company adopted the new accounting standard, ASC 606, related to revenue recognition, effective January 1, 2018. The prior periods presented here have been recast to reflect the adoption of this new standard.

 

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, 2017 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

2

 

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,

 

 

    

2018

    

2017

    

2018

    

2017

 

Net sales

 

$

98,972

 

$

139,661

 

$

542,082

 

$

475,686

 

Cost of sales

 

 

63,713

 

 

84,309

 

 

348,363

 

 

299,458

 

Gross profit

 

 

35,259

 

 

55,352

 

 

193,719

 

 

176,228

 

Operating expenses, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

24,962

 

 

24,318

 

 

97,755

 

 

81,987

 

Selling, general, and administrative

 

 

21,218

 

 

28,675

 

 

92,060

 

 

100,250

 

Amortization of intangible assets

 

 

4,249

 

 

13,753

 

 

32,351

 

 

35,475

 

Restructuring

 

 

887

 

 

2,246

 

 

8,556

 

 

11,851

 

Acquisition costs

 

 

53

 

 

1,510

 

 

2,959

 

 

17,786

 

Asset impairment

 

 

122,829

 

 

 —

 

 

375,172

 

 

1,139

 

Other, net

 

 

42

 

 

(165)

 

 

368

 

 

(392)

 

Total operating expenses, net

 

 

174,240

 

 

70,337

 

 

609,221

 

 

248,096

 

Operating income (loss)

 

 

(138,981)

 

 

(14,985)

 

 

(415,502)

 

 

(71,868)

 

Interest expense, net

 

 

(4,485)

 

 

(4,753)

 

 

(18,332)

 

 

(17,122)

 

Income (loss) before income taxes

 

 

(143,466)

 

 

(19,738)

 

 

(433,834)

 

 

(88,990)

 

Income tax expense (benefit)

 

 

1,208

 

 

(11,259)

 

 

(26,746)

 

 

(37,594)

 

Net income (loss)

 

$

(144,674)

 

$

(8,479)

 

$

(407,088)

 

$

(51,396)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(3.11)

 

$

(0.18)

 

$

(8.63)

 

$

(1.16)

 

Diluted

 

$

(3.11)

 

$

(0.18)

 

$

(8.63)

 

$

(1.16)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

46,551

 

 

47,037

 

 

47,151

 

 

44,174

 

Diluted

 

 

46,551

 

 

47,037

 

 

47,151

 

 

44,174

 

 

3

 

Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets

(in thousands)

 

 

 

 

 

 

 

 

 

December 31,

 

December 31,

 

    

2018

    

2017

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

212,273

 

$

279,736

Restricted cash

 

 

809

 

 

847

Short-term investments

 

 

48,189

 

 

47,780

Accounts receivable, net

 

 

66,808

 

 

98,866

Contract assets

 

 

10,397

 

 

160

Inventories

 

 

156,311

 

 

120,266

Deferred cost of sales

 

 

3,072

 

 

15,994

Prepaid expenses and other current assets

 

 

22,221

 

 

33,437

Total current assets

 

 

520,080

 

 

597,086

Property, plant and equipment, net

 

 

80,284

 

 

85,058

Intangible assets, net

 

 

85,149

 

 

369,843

Goodwill

 

 

184,302

 

 

307,131

Deferred income taxes

 

 

1,869

 

 

3,047

Other assets

 

 

29,132

 

 

25,310

Total assets

 

$

900,816

 

$

1,387,475

 

 

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

39,611

 

$

50,318

Accrued expenses and other current liabilities

 

 

46,450

 

 

58,068

Customer deposits and deferred revenue

 

 

72,736

 

 

112,032

Income taxes payable

 

 

1,256

 

 

3,846

Total current liabilities

 

 

160,053

 

 

224,264

Deferred income taxes

 

 

5,690

 

 

36,845

Long-term debt

 

 

287,392

 

 

275,630

Other liabilities

 

 

9,906

 

 

10,643

Total liabilities

 

 

463,041

 

 

547,382

 

 

 

 

 

 

 

Total stockholders’ equity

 

 

437,775

 

 

840,093

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

900,816

 

$

1,387,475

4

 

Veeco Instruments Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Data

(in thousands, except per share amounts)
(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-Based

 

 

 

 

 

 

 

 

Three months ended December 31, 2018

    

GAAP

    

Compensation

    

Amortization

    

Other

    

Non-GAAP

 

Net sales

 

$

98,972

 

 

 

 

 

 

 

$

98,972

 

Gross profit

 

 

35,259

 

282

 

 

 

134

 

 

35,675

 

Gross margin

 

 

35.6

%

 

 

 

 

 

 

 

36.0

%

Research and development

 

 

24,962

 

(883)

 

 

 

 

 

 

24,079

 

Selling, general, and administrative and Other, net

 

 

21,260

 

(2,024)

 

 

 

(723)

 

 

18,513

 

Net income (loss)

 

 

(144,674)

 

3,353

 

4,249

 

129,532

 

 

(7,540)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(3.11)

 

 

 

 

 

 

 

$

(0.16)

 

Diluted

 

 

(3.11)

 

 

 

 

 

 

 

 

(0.16)

 

Weighted average number of shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

46,551

 

 

 

 

 

 

 

 

46,551

 

Diluted

 

 

46,551

 

 

 

 

 

 

 

 

46,551

 

 

Veeco Instruments Inc. and Subsidiaries

Other Non-GAAP Adjustments

(in thousands)
(unaudited)

 

 

 

Three months ended December 31, 2018

    

 

Restructuring

 

722

Acquisition related

 

53

Release of inventory fair value step-up associated with the Ultratech purchase accounting

 

70

Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting

 

190

Accelerated depreciation

 

597

Asset impairment

 

122,829

Non-cash interest expense

 

3,023

Non-GAAP tax adjustment *

 

2,048

Total Other

 

129,532

* - 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, incremental transaction-related compensation, and certain integration costs.

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.

5

 

Veeco Instruments Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Data

(in thousands, except per share amounts)
(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based

 

 

 

 

 

 

 

Three months ended December 31, 2017

    

 

GAAP

    

Compensation

    

Amortization

    

Other

    

Non-GAAP

 

Net sales

 

$

139,661

 

 

 

 

 

 

 

$

139,661

 

Gross profit

 

 

55,352

 

607

 

 

 

537

 

 

56,496

 

Gross margin

 

 

39.6

%  

 

 

 

 

 

 

 

40.5

%

Research and development

 

 

24,318

 

(971)

 

 

 

 

 

 

23,347

 

Selling, general, and administrative and Other, net

 

 

28,510

 

(2,668)

 

 

 

(196)

 

 

25,646

 

Net income (loss)

 

 

(8,479)

 

4,220

 

13,753

 

(3,460)

 

 

6,034

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.18)

 

 

 

 

 

 

 

$

0.13

 

Diluted

 

 

(0.18)

 

 

 

 

 

 

 

 

0.13

 

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. taxlaws.

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, incremental transaction-related compensation, and certain integration costs.

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.

6

 

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, 2018

 

December 31, 2017

GAAP Net income (loss)

 

$

(144,674)

 

$

(8,479)

Share-based compensation

 

 

3,353

 

 

4,220

Amortization

 

 

4,249

 

 

13,753

Restructuring

 

 

722

 

 

2,073

Acquisition related

 

 

53

 

 

1,510

Release of inventory fair value step-up associated with the Ultratech purchase accounting

 

 

70

 

 

440

Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting

 

 

190

 

 

293

Accelerated depreciation

 

 

597

 

 

 —

Asset impairment

 

 

122,829

 

 

 —

Interest (income) expense

 

 

4,485

 

 

4,753

Income tax expense (benefit)

 

 

1,208

 

 

(11,259)

Non-GAAP Operating income (loss)

 

$

(6,918)

 

$

7,304

 

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, incremental transaction-related compensation, and certain integration costs.

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.

7

 

Veeco Instruments Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Data

(in thousands, except per share amounts)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based

 

 

 

 

 

 

 

For the year ended December 31, 2018

    

 

GAAP

    

Compensation

    

Amortization

    

Other

    

Non-GAAP

 

Net sales

 

$

542,082

 

 

 

 

 

 

 

$

542,082

 

Gross profit

 

 

193,719

 

1,885

 

 

 

2,849

 

 

198,453

 

Gross margin

 

 

35.7

%  

 

 

 

 

 

 

 

36.6

%

Research and development

 

 

97,755

 

(3,611)

 

 

 

 

 

 

94,144

 

Selling, general, and administrative and Other

 

 

92,428

 

(9,417)

 

 

 

(1,863)

 

 

81,148

 

Net income (loss)

 

 

(407,088)

 

16,074

 

32,351

 

372,862

 

 

14,199

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(8.63)

 

 

 

 

 

 

 

$

0.30

 

Diluted

 

 

(8.63)

 

 

 

 

 

 

 

 

0.30

 

Weighted average number of shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

47,151

 

 

 

 

 

 

 

 

47,171

 

Diluted

 

 

47,151

 

 

 

 

 

 

 

 

47,199

 

 

Veeco Instruments Inc. and Subsidiaries

Other Non-GAAP Adjustments

(in thousands)

(unaudited)

 

 

 

 

For the year ended December 31, 2018

    

 

Restructuring

 

7,395

Acquisition related

 

2,959

Release of inventory fair value step-up associated with the Ultratech purchase accounting

 

2,516

Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting

 

1,011

Accelerated depreciation

 

1,184

Asset impairment

 

375,172

Non-cash interest expense

 

11,762

Non-GAAP tax adjustment *

 

(29,137)

Total Other

 

372,862

* - 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.

8

 

Veeco Instruments Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Data

(in thousands, except per share amounts)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based

 

 

 

 

 

 

 

For the year ended December 31, 2017

    

 

GAAP

    

Compensation

    

Amortization

    

Other

    

Non-GAAP

 

Net sales

 

$

475,686

 

 

 

 

 

 

 

$

475,686

 

Gross profit

 

 

176,228

 

2,505

 

 

 

10,075

 

 

188,808

 

Gross margin

 

 

37.0

%  

 

 

 

 

 

 

 

39.7

%

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)

 

 

(51,396)

 

24,396

 

35,475

 

8,368

 

 

16,843

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(1.16)

 

 

 

 

 

 

 

$

0.38

 

Diluted

 

 

(1.16)

 

 

 

 

 

 

 

 

0.38

 

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

Accelerated depreciation

 

180

Asset impairment

 

1,139

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.

9

 

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, 2018

 

December 31, 2017

GAAP Net income (loss)

 

$

(407,088)

 

$

(51,396)

Share-based compensation

 

 

16,074

 

 

24,396

Amortization

 

 

32,351

 

 

35,475

Restructuring

 

 

7,395

 

 

9,971

Acquisition related

 

 

2,959

 

 

13,583

Release of inventory fair value step-up associated with the Ultratech purchase accounting

 

 

2,516

 

 

9,664

Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting

 

 

1,011

 

 

695

Accelerated depreciation

 

 

1,184

 

 

180

Asset impairment

 

 

375,172

 

 

1,139

Interest (income) expense

 

 

18,332

 

 

17,122

Income tax expense (benefit)

 

 

(26,746)

 

 

(37,594)

Non-GAAP Operating income (loss)

 

$

23,160

 

$

23,235

 

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.

10

 

Veeco Instruments Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Data

(in millions, except per share amounts)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based

 

 

 

 

 

 

 

 

 

 

 

 

 

Guidance for the three months ending March 31, 2019

 

GAAP

 

Compensation

 

Amortization

 

    Other     

 

Non-GAAP

 

Net sales

    

$

85

    

-

    

$

105

    

 

    

 

    

 

    

$

85

    

-

    

$

105

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

28

 

-

 

 

37

 

 1

 

 —

 

 —

 

 

29

 

-

 

 

38

 

Gross margin

 

 

33

%  

-

 

 

35

%  

 

 

 

 

 

 

 

34

%  

-

 

 

36

%  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(28)

 

-

 

$

(19)

 

 4

 

 4

 

 6

 

$

(14)

 

-

 

$

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per diluted common share

 

$

(0.59)

 

-

 

$

(0.39)

 

  

 

  

 

  

 

$

(0.30)

 

-

 

$

(0.10)

 

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, 2019

    

 

 

    

 

    

 

 

GAAP Net income (loss)

 

$

(28)

 

-

 

$

(19)

Share-based compensation

 

 

 4

 

-

 

 

 4

Amortization

 

 

 4

 

-

 

 

 4

Restructuring

 

 

 2

 

-

 

 

 2

Interest expense, net

 

 

 4

 

-

 

 

 4

Income tax expense (benefit)

 

 

 1

 

-

 

 

 1

Other

 

 

 1

 

-

 

 

 1

Non-GAAP Operating income (loss)

 

$

(12)

 

-

 

$

(3)

 

Note: Amounts may not calculate precisely due to rounding.

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, incremental transaction-related compensation, and certain integration costs.

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.

 

11

Exhibit 99.2

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Veeco Instruments Inc. February 11, 2019 Q4 2018 Conference Call

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Safe Harbor To the extent that this presentation 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 items include the risk factors 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, 2017 and subsequent Quarterly Reports on Form 10-Q and current reports on Form 8-K. Veeco does not undertake any obligation to update any forward-looking statements to reflect future events or circumstances after the date of such statements. Q4 2018 Conference Call | © 2019 Veeco Instruments Inc.2

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3 CEO Overview William Miller Q4 2018 Conference Call | © 2019 Veeco Instruments Inc.

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Q4 2018 Highlights 4 ▪ Bookings led by Front-End Semiconductor Foundry and EUV Mask Blank Customers ▪ Revenue declined due to significantly lower MOCVD China LED business Q4 Results $112M Bookings $99.0M Revenue ($6.9M) Non-GAAP Operating Loss (16¢) Non-GAAP EPS A reconciliation of GAAP to Non-GAAP financial measures can be found in the backup section of this presentation. ▪ Backlog grew to $288M ▪ Ending cash and short-term investments of $261M Q4 2018 Conference Call | © 2019 Veeco Instruments Inc. Focused on Business Transition to Front-End and Compound Semiconductor Markets

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2019 Growth Opportunities 5 EUV Mask Blanks Ion Beam Deposition Front-End Wafer Processing Laser Annealing Wafer Level Packaging Lithography 3D Sensing / VCSEL MOCVD EUV – Extreme Ultraviolet VCSEL – Vertical Cavity Surface Emitting Laser MOCVD – Metal Organic Chemical Vapor Deposition Front-End Semiconductor Compound Semiconductor Advanced Packaging Q4 2018 Conference Call | © 2019 Veeco Instruments Inc.

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2019 Focus 6 Innovate technology leadership ▪ Solve tough materials problems ▪ Execute product roadmaps Penetrate market growth ▪ EUV Mask Blanks – Ion Beam Deposition ▪ Leading-Edge Front-End Semiconductor – Laser Anneal ▪ 3D Sensing / VCSEL – MOCVD ▪ Advanced Packaging – Lithography Improve profitability ▪ Improve gross margin ▪ Reduce operating expenses Operate with Discipline to Restore Growth and Profitability Q4 2018 Conference Call | © 2019 Veeco Instruments Inc.

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7 CFO Financial Review Sam Maheshwari Q4 2018 Conference Call | © 2019 Veeco Instruments Inc.

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Q4 2018 Revenue by Market & Region 8 ROW United States EMEA China 41% 33% 17% 9% LED Lighting, Display & Compound Semi Front-End Semiconductor Scientific & Industrial Advanced Packaging, MEMS & RF Filters $99.0M 22% 14% 50% 14% Q4 2018 Conference Call | © 2019 Veeco Instruments Inc. Revenue by Market Revenue by Region

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P&L Highlights 9 Q4 Stock Price Decline Drove Non-Cash Goodwill Impairment Charge Amounts may not calculate precisely due to rounding. A reconciliation of GAAP to Non-GAAP financial measures can be found in the backup section of this presentation. GAAP Non-GAAP $ millions (except per share amounts) Q3 18 Q4 18 2018 Q3 18 Q4 18 2018 Revenue $126.8 $99.0 542.1 $126.8 $99.0 542.1 Gross Profit 46.4 35.3 193.7 48.4 35.7 198.5 Gross Margin 36.6% 35.6% 35.7% 38.2% 36.0% 36.6% R&D 23.5 25.0 97.8 22.8 24.1 94.1 SG&A & Other 20.2 21.3 92.4 17.6 18.5 81.1 Asset Impairment -- 122.8 375.2 -- -- -- Operating Income/(Loss) (3.9) (139.0) (415.5) 8.0 (6.9) 23.2 Net Income/(Loss) (9.0) (144.7) (407.1) 5.3 (7.5) 14.2 Earnings/(Loss) Per Share ($0.19) ($3.11) ($8.63) $0.11 ($0.16) 0.30 Q4 2018 Conference Call | © 2019 Veeco Instruments Inc.

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Balance Sheet Highlights 10 Amounts may not calculate precisely due to rounding. A reconciliation of GAAP to Non-GAAP financial measures can be found in the backup section of this presentation. Continued Investment in Inventory Related to New Products and Evaluation Units $ millions Q3 18 Q4 18 Cash & Short-Term Investments 266 261 Accounts Receivable 91 67 Inventories 150 156 Accounts Payable 65 40 Long-Term Debt 284 287 Cash Flow from Operations 18 2 DSO (days) 64 61 DOI 173 219 DPO 74 56 Q4 2018 Conference Call | © 2019 Veeco Instruments Inc.

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2019 – Focus on Foundational & Growth Markets 11 ▪ Commodity blue LED business reducing significantly in 2019 ▪ Reduced China revenue going forward ▪ Growth initiatives aligned with multiple megatrends ▪ Foundational businesses remain stable Foundational and Growth Revenue Combined are Expected to Increase in 2019 Q4 2018 Conference Call | © 2019 Veeco Instruments Inc.

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2019 – Growth on a Solid Foundation 12 Key Foundational Businesses ▪ Service Business ▪ Wet Etch & Clean ▪ Data Storage ▪ Universities & Research Labs ▪ Optical Coatings for Industrial, Medical & Military Key Growth Initiatives ▪ EUV Mask Blanks - Ion Beam Deposition ▪ Advanced Front-End Semiconductor – Laser Annealing ▪ 3D Sensing / VCSEL – MOCVD ▪ Advanced Packaging – Lithography Foundational Businesses Generate Cash, Support Growth Initiatives Q4 2018 Conference Call | © 2019 Veeco Instruments Inc.

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Q1 2019 Guidance 13 . A reconciliation of GAAP to Non-GAAP financial measures can be found in the backup section of this presentation. GAAP Non-GAAP Revenue $85M - $105M $85M - $105M Gross Margin 33% - 35% 34% - 36% Net Income (Loss) ($28M)-($19M) ($14M)-($5M) Earnings Per Share ($0.59)-($0.39) ($0.30)-($0.10) Non-GAAP Operating Income (Loss) ($12M)-($3M) Q4 2018 Conference Call | © 2019 Veeco Instruments Inc.

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14 Q&A Q4 2018 Conference Call | © 2019 Veeco Instruments Inc.

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15 Reconciliation Tables Q4 2018 Conference Call | © 2019 Veeco Instruments Inc.

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Note on Reconciliation Tables 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, incremental transaction- related compensation, and certain integration costs. 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, 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. 1616 Q4 2018 Conference Call | © 2019 Veeco Instruments Inc.

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Supplemental Information—GAAP to Non-GAAP Reconciliation 17 Amounts may not calculate precisely due to rounding. US$ millions Q3 18 Q4 18 2018 Net Sales $126.8 $99.0 $542.1 GAAP Gross Profit 46.4 35.3 193.7 GAAP Gross Margin 36.6% 35.6% 35.7% Add: Release of inventory fair value step-up for purchase accounting 1.4 0.1 2.5 Add: Share-Based Comp 0.5 0.3 1.9 Add: Depreciation of PP&E fair value step-up for purchase accounting 0.1 0.1 0.3 Non-GAAP Gross Profit $48.4 $35.7 $198.5 Non-GAAP Gross Margin 38.2% 36.0% 36.6% US$ millions, except per share amounts Q3 18 Q4 18 2018 GAAP Basic EPS (0.19) (3.11) (8.63) GAAP Diluted EPS (0.19) (3.11) (8.63) GAAP Net Income (Loss) (9.0) (144.7) (407.1) Add: Share-Based Comp 3.3 3.4 16.1 Add: Amortization 4.2 4.2 32.4 Add: Restructuring 1.9 0.7 7.4 Add: Acquisition Related 0.2 0.1 3.0 Add: Release of inventory fair value step-up for purchase accounting 1.4 0.1 2.5 Add: Depreciation of PP&E fair value step-up for purchase accounting 0.2 0.2 1.0 Add: Accelerated Depreciation 0.6 0.6 1.2 Add: Asset Impairment - 122.8 375.2 Add: Non-Cash Interest Expense 3.0 3.0 11.8 Add: Tax Adjustment from GAAP to Non-GAAP (0.5) 2.0 (29.1) Non-GAAP Net Income (Loss) 5.3 (7.5) 14.2 Non-GAAP Basic EPS 0.11 (0.16) 0.30 Non-GAAP Diluted EPS 0.11 (0.16) 0.30 US$ millions Q3 18 Q4 18 2018 GAAP Net Income (Loss) $(9.0) $(144.7) $(407.1) Add: Share-Based Comp 3.3 3.4 16.1 Add: Amortization 4.2 4.2 32.4 Add: Restructuring 1.9 0.7 7.4 Add: Acquisition Related 0.2 0.1 3.0 Add: Release of inventory fair value step-up for purchase accounting 1.4 0.1 2.5 Add: Depreciation of PP&E fair value step-up for purchase accounting 0.2 0.2 1.0 Add: Accelerated Depreciation 0.6 0.6 1.2 Add: Asset Impairment - 122.8 375.2 Add: Interest Expense 4.8 4.5 18.3 Subtract: Tax Expense (Benefit) 0.3 1.2 (26.7) Non-GAAP Operating Income (Loss) $8.0 $(6.9) $23.2 17 Q4 2018 Conference Call | © 2019 Veeco Instruments Inc.

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Q4 2018 GAAP to Non-GAAP Reconciliation 18 Amounts may not calculate precisely due to rounding Non-GAAP Adjustments In millions, except per share amounts GAAP Share-Based Compensation Amortization Other Non-GAAP Net Sales $99.0 $99.0 Gross Profit 35.3 0.3 0.1 35.7 Gross Margin 35.6% 36.0% Research and Development 25.0 (0.9) 24.1 Selling, General, and Administrative and Other 21.3 (2.0) (0.7) 18.5 Net Income (Loss) $(144.7) 3.4 4.2 129.5 $(7.5) Income (Loss) Per Common Share: Basic $(3.11) $(0.16) Diluted (3.11) (0.16) Weighted Average Number of Shares: Basic 46.6 46.6 Diluted 46.6 46.6 Other Non-GAAP Adjustments Restructuring 0.7 Acquisition Related 0.1 Release of inventory fair value step-up associated with the Ultratech purchase accounting 0.1 Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 0.2 Accelerated Depreciation 0.6 Asset Impairment 122.8 Non-Cash Interest Expense 3.0 Non-GAAP Tax Adjustment 2.0 Total Other 129.5 Q4 2018 Conference Call | © 2019 Veeco Instruments Inc.

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2018 GAAP to Non-GAAP Reconciliation 19 Amounts may not calculate precisely due to rounding Non-GAAP Adjustments In millions, except per share amounts GAAP Share-Based Compensation Amortization Other Non-GAAP Net Sales $542.1 $542.1 Gross Profit 193.7 1.9 2.8 198.5 Gross Margin 35.7% 36.6% Research and Development 97.8 (3.6) 94.1 Selling, General, and Administrative and Other 92.4 (9.4) (1.9) 81.1 Net Income (Loss) $(407.1) 16.1 32.4 372.9 $14.2 Income (Loss) Per Common Share: Basic $(8.63) $0.30 Diluted (8.63) 0.30 Weighted Average Number of Shares: Basic 47.2 47.2 Diluted 47.2 47.2 Other Non-GAAP Adjustments Restructuring 7.4 Acquisition Related 3.0 Release of inventory fair value step-up associated with the Ultratech purchase accounting 2.5 Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 1.0 Accelerated Depreciation 1.2 Asset Impairment 375.2 Non-Cash Interest Expense 11.8 Non-GAAP Tax Adjustment (29.1) Total Other 372.9 Q4 2018 Conference Call | © 2019 Veeco Instruments Inc.

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Q1 2019 Guidance GAAP to Non-GAAP Reconciliation 20 Amounts may not calculate precisely due to rounding Non-GAAP Adjustments In millions, except per share amounts GAAP Share-Based Compensation Amortization Other Non-GAAP Net Sales $85–$105 $85–$105 Gross Profit 28–37 1 —— 29–38 Gross Margin 33%–35% 34%–36% Net Income (Loss) $(28)–$(19) 4 4 6 $(14)–$(5) Income (Loss) per Diluted Share $(0.59)–$(0.39) $(0.30)–$(0.10) GAAP Net Income (Loss) $(28)–$(19) Share-Based Compensation 4 Amortization 4 Restructuring 2 Interest Expense, Net 4 Income Tax Expense (Benefit) 1 Other 1 Non-GAAP Operating Income (Loss) $(12)–$(3) Q4 2018 Conference Call | © 2019 Veeco Instruments Inc.

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