VEECO INSTRUMENTS INC (Form: 8-K, Received: 05/06/2019 16:18:48)

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): May 3, 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)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	VECO	The NASDAQ Global Select Market

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 May 6, 2019, Veeco Instruments Inc. issued a press release announcing its financial results for the quarter ended March 31, 2019. In connection with the release and the related conference call, Veeco posted a presentation relating to its first quarter 2019 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 5.07 Submission of Matters to a Vote of Security Holders.

On May 3, 2019, Veeco held its 2019 Annual Meeting. The matters voted on at the meeting are described in detail in the Company’s proxy statement for the meeting, which was filed with the SEC on March 19, 2019.

As of the record date for the meeting, there were 48,034,009 shares of common stock outstanding, each of which was entitled to one vote with respect to each of the matters voted on at the meeting. Each of the directors up for election was elected and each of the other matters was approved by the required number of votes on each such matter. The terms of each of the following directors continued after the meeting: Kathleen A. Bayless, Richard A. D’Amore, Gordon Hunter, Keith D. Jackson and Peter J. Simone.

The final voting results were:


Matter	For	Withheld	Broker Non-votes
1. Election of Directors
(a) William J. Miller, Ph.D.	39,318,797	565,791	3,479,336
(b) John R. Peeler	36,408,219	3,476,369	3,479,336
(c) Thomas St. Dennis	39,179,328	705,260	3,479,336
Matter	For	Against	Abstained	Broker Non-votes
2. Amendment and Restatement of 2010 Stock Incentive Plan	34,401,022	5,429,831	53,735	3,479,336
3. Amendment to the 2016 Employee Stock Purchase Plan	39,752,648	76,456	55,484	3,479,336
4. Approval of the advisory vote on executive compensation	27,295,507	11,628,650	960,431	3,479,336
5. Ratification of the appointment of KPMG LLP	43,234,124	86,283	43,517	0

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits .


Exhibit		Description

99.1		Press release issued by Veeco dated May 6, 2019

99.2		Veeco Q1 2019 Conference Call, May 6, 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 May 6, 2019

99.2		Veeco Q1 2019 Conference Call, May 6, 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.


May 6, 2019	VEECO INSTRUMENTS INC.

	By:	/s/ Gregory A. Robbins
	Name: Gregory A. Robbins
	Title: Senior Vice President and General Counsel

EXHIBIT 99.1

VEECO REPORTS FIRST QUARTER 2019 FINANCIAL RESULTS

First Quarter 2019 Highlights:

Revenues of $99.4 million, compared with $158.6 million in the same period last year

GAAP net loss of $18.5 million, or $0.40 loss per diluted share

Non-GAAP net loss of $6.4 million, or $0.14 loss per diluted share

Plainview, N.Y., May 6, 2019 -- Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its first quarter ended March 31, 2019. 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



GAAP Results	Q1 ’19		Q1 ’18
Revenue	$	99.4	$	158.6
Net income (loss)	$	(18.5)	$	(15.8)
Diluted earnings (loss) per share	$	(0.40)	$	(0.34)



Non-GAAP Results	Q1 ’19		Q1 ’18
Net income (loss)	$	(6.4)	$	9.2
Operating income (loss)	$	(4.8)	$	11.3
Diluted earnings (loss) per share	$	(0.14)	$	0.20

“We are executing according to our plan with Q1 revenue and EPS results above the midpoint of our guided range. Our transition away from the commodity LED business is largely complete and our revenue has stabilized. In addition, we are seeing strength in our Data Storage and EUV products driven by technology advancements,” commented William J. Miller, Ph.D., Chief Executive Officer.

“We also shipped the first ion beam deposition system for EUV mask-blank volume production in April. Looking ahead, we remain confident about growing our top line and returning to profitability,” concluded Dr. Miller.

Guidance and Outlook

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

Revenue is expected in the range of $90 million to $110 million

GAAP earnings (loss) per share are expected in the range of ($0.47) to ($0.27)

Non-GAAP earnings (loss) per share are expected in the range of ($0.18) to $0.02

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, May 6, 2019 starting at 5:30pm ET. To join the call, dial 1-888-204-4368 (toll free) or 1-929-477-0402 and use passcode 6759738. 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 an innovative manufacturer of semiconductor process equipment. Our proven MOCVD, lithography, laser annealing, ion beam, and single wafer etch & clean technologies play an integral role in the fabrication and packaging of advanced semiconductor devices. With equipment designed to maximize performance, yield and cost of ownership, Veeco holds leading technology positions in the markets we serve. To learn more about Veeco’s systems and service offerings, 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, 2018 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) 252-1438 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 March 31,
	2019		2018
Net sales	$	99,371	$	158,574
Cost of sales		64,655		101,894
Gross profit		34,716		56,680
Operating expenses, net:
Research and development		23,340		24,320
Selling, general, and administrative		19,902		26,383
Amortization of intangible assets		4,218		13,532
Restructuring		1,430		2,695
Acquisition costs		—		1,342
Other, net		(34)		(157)
Total operating expenses, net		48,856		68,115
Operating income (loss)		(14,140)		(11,435)
Interest expense, net		(4,200)		(4,622)
Income (loss) before income taxes		(18,340)		(16,057)
Income tax expense (benefit)		190		(230)
Net income (loss)	$	(18,530)	$	(15,827)

Income (loss) per common share:
Basic	$	(0.40)	$	(0.34)
Diluted	$	(0.40)	$	(0.34)

Weighted average number of shares:
Basic		46,848		46,963
Diluted		46,848		46,963

Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets

(in thousands)
(unaudited)


	March 31,		December 31,
	2019		2018
Assets
Current assets:
Cash and cash equivalents	$	169,439	$	212,273
Restricted cash		804		809
Short-term investments		67,215		48,189
Accounts receivable, net		74,860		66,808
Contract assets		10,479		10,397
Inventories		148,103		156,311
Deferred cost of sales		2,921		3,072
Prepaid expenses and other current assets		24,943		22,221
Total current assets		498,764		520,080
Property, plant and equipment, net		77,737		80,284
Operating lease right-of-use assets		12,874		—
Intangible assets, net		80,931		85,149
Goodwill		184,302		184,302
Deferred income taxes		1,869		1,869
Other assets		29,117		29,132
Total assets	$	885,594	$	900,816

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	36,315	$	39,611
Accrued expenses and other current liabilities		44,040		46,450
Customer deposits and deferred revenue		68,881		72,736
Income taxes payable		792		1,256
Total current liabilities		150,028		160,053
Deferred income taxes		5,675		5,690
Long-term debt		290,473		287,392
Operating lease long-term liabilities		8,382		—
Other liabilities		9,238		9,906
Total liabilities		463,796		463,041

Total stockholders’ equity		421,798		437,775

Total liabilities and stockholders’ equity	$	885,594	$	900,816

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 March 31, 2019	GAAP			Compensation	Amortization	Other		Non-GAAP
Net sales	$	99,371						$	99,371
Gross profit		34,716		470		47			35,233
Gross margin		34.9	%						35.5	%
Operating expenses		48,856		(2,687)	(4,218)	(1,967)			39,984
Operating income (loss)		(14,140)		3,157	4,218	2,014	^		(4,751)
Net income (loss)		(18,530)		3,157	4,218	4,787	^		(6,368)

Income (loss) per common share:
Basic	$	(0.40)						$	(0.14)
Diluted		(0.40)							(0.14)
Weighted average number of shares:
Basic		46,848							46,848
Diluted		46,848							46,848

^ - See table below for additional details.

Veeco Instruments Inc. and Subsidiaries

Other Non-GAAP Adjustments

(in thousands)
(unaudited)


Three months ended March 31, 2019
Restructuring		1,430
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting		142
Accelerated depreciation		397
Other		45
Subtotal		2,014
Non-cash interest expense		3,081
Non-GAAP tax adjustment *		(308)
Total Other		4,787

* - 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 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.

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 March 31, 2018		GAAP		Compensation	Amortization	Other		Non-GAAP
Net sales	$	158,574						$	158,574
Gross profit		56,680		554		611			57,845
Gross margin		35.7	%						36.5	%
Operating expenses		68,115		(3,983)	(13,532)	(4,053)			46,547
Operating income (loss)		(11,435)		4,537	13,532	4,664	^		11,298
Net income (loss)		(15,827)		4,537	13,532	6,985	^		9,227

Income (loss) per common share:
Basic	$	(0.34)						$	0.20
Diluted		(0.34)							0.20
Weighted average number of shares:
Basic		46,963							47,022
Diluted		46,963							47,191

^ - See table below for additional details.

Veeco Instruments Inc. and Subsidiaries

Other Non-GAAP Adjustments

(in thousands)
(unaudited)


Three months ended March 31, 2018
Restructuring		2,523
Acquisition related		1,342
Release of inventory fair value step-up associated with the Ultratech purchase accounting		514
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting		293
Other		(8)
Subtotal		4,664
Non-cash interest expense		2,859
Non-GAAP tax adjustment *		(538)
Total Other		6,985

* - 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.

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
	March 31, 2019		March 31, 2018
GAAP Net income (loss)	$	(18,530)	$	(15,827)
Share-based compensation		3,157		4,537
Amortization		4,218		13,532
Restructuring		1,430		2,523
Acquisition related		—		1,342
Release of inventory fair value step-up associated with the Ultratech purchase accounting		—		514
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting		142		293
Accelerated depreciation		397		—
Interest (income) expense, net		4,200		4,622
Other		45		(8)
Income tax expense (benefit)		190		(230)
Non-GAAP Operating income (loss)	$	(4,751)	$	11,298

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 certain integration costs.

Veeco Instruments Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Data

(in thousands, except per share amounts)

(unaudited)


							Non-GAAP Adjustments
Guidance for the three months ending							Share-based
June 30, 2019	GAAP						Compensation	Amortization	Other	Non-GAAP
Net sales	$	90		-	$	110				$	90		-	$	110
Gross profit		32		-		42	1	—	—		33		-		43
Gross margin		36%		-		38%					37%		-		39%
Operating expenses			~$50				3	4	3			~$40
Operating income (loss)		(18)		-		(8)	4	4	3		(7)		-		3
Net income (loss)	$	(22)		-	$	(12)	4	4	5	$	(9)		-	$	1

Income (loss) per diluted common share	$	(0.47)		-	$	(0.27)				$	(0.18)		-	$	0.02
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 June 30, 2019
GAAP Net income (loss)	$	(22)	-	$	(12)
Share-based compensation		4	-		4
Amortization		4	-		4
Restructuring		2	-		2
Interest expense, net		4	-		4
Income tax expense (benefit)		1	-		1
Non-GAAP Operating income (loss)	$	(7)	-	$	3

Note: Amounts may not calculate precisely due to rounding.

Exhibit 99.2

Veeco Instruments Inc. May 6, 2019 Q1 2019 Conference Call

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, 2018 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. Q1 2019 Conference Call | © 2019 Veeco Instruments Inc.2

Q1 2019 Highlights 4 ▪ Strength in Data Storage and EUV products ▪ Stabilized revenue with de minimis commodity LED contribution Q1 Results $107.2M Bookings $99.4M Revenue $(4.8M) Non-GAAP Operating Loss (14¢) 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 $295M ▪ Ending cash and short-term investments of $237M Focused on Growing Top-Line and Returning to Profitability Q1 2019 Conference Call | © 2019 Veeco Instruments Inc.

Executing 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 Q1 2019 Conference Call | © 2019 Veeco Instruments Inc.

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 Solving Customers’ Tough Materials Problems to Restore Growth and Profitability Q1 2019 Conference Call | © 2019 Veeco Instruments Inc.

Q1 2019 Revenue by Market & Region 8 ROW United States EMEA China 33% 39% 18% 10% LED Lighting, Display & Compound Semi Front-End Semiconductor Scientific & Industrial Advanced Packaging, MEMS & RF Filters $99.4M 23% 14% 40% 23% Revenue by Market Revenue by Region Q1 2019 Conference Call | © 2019 Veeco Instruments Inc.

Operating Results 9 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) Q4 18 Q1 19 Q4 18 Q1 19 Revenue $99.0 $99.4 $99.0 $99.4 Gross Profit 35.3 34.7 35.7 35.2 Gross Margin 35.6% 34.9% 36.0% 35.5% Operating Expenses 174.2 48.9 42.6 40.0 Operating Income/(Loss) (139.0) (14.1) (6.9) (4.8) Net Income/(Loss) (144.7) (18.5) (7.5) (6.4) Earnings/(Loss) Per Share $(3.11) $(0.40) $(0.16) $(0.14) Q1 2019 Conference Call | © 2019 Veeco Instruments Inc.

Balance Sheet and Cash Flow 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. Reduction in Cash Driven by Working Capital Investments, Debt Interest Payment and Net Loss $ millions Q4 18 Q1 19 Cash & Short-Term Investments 261 237 Accounts Receivable 67 75 Inventories 156 148 Accounts Payable 40 36 Long-Term Debt 287 290 Cash Flow from Operations 2 (22) DSO (days) 61 68 DOI 219 212 DPO 56 52 Q1 2019 Conference Call | © 2019 Veeco Instruments Inc.

Q2 2019 Guidance 11 . A reconciliation of GAAP to Non-GAAP financial measures can be found in the backup section of this presentation. GAAP Non-GAAP Revenue $90M - $110M $90M - $110M Gross Margin 36% - 38% 37% - 39% Operating Expenses ~$50M ~$40M Operating Income (Loss) $(18) - $(8) $(7M) - $3M Net Income (Loss) $(22M) - $(12M) $(9M) - $1M Earnings (Loss) Per Share $(0.47) - $(0.27) $(0.18) - $0.02 Q1 2019 Conference Call | © 2019 Veeco Instruments Inc.

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. 1414 Q1 2019 Conference Call | © 2019 Veeco Instruments Inc.

Supplemental Information—GAAP to Non-GAAP Reconciliation 15 Amounts may not calculate precisely due to rounding. 15 Q1 2019 Conference Call | © 2019 Veeco Instruments Inc. US$ millions Q4 18 Q1 19 Net Sales $99.0 $99.4 GAAP Gross Profit 35.3 34.7 GAAP Gross Margin 35.6% 34.9% Add: Release of inventory fair value step- up for purchase accounting 0.1 - Add: Share-Based Comp 0.3 0.5 Add: Depreciation of PP&E fair value step-up for purchase accounting 0.1 - Non-GAAP Gross Profit $35.7 $35.2 Non-GAAP Gross Margin 36.0% 35.5% US$ millions, except per share amounts Q4 18 Q1 19 GAAP Basic EPS (3.11) (0.40) GAAP Diluted EPS (3.11) (0.40) GAAP Net Income (Loss) (144.7) (18.5) Add: Share-Based Comp 3.4 3.2 Add: Amortization 4.2 4.2 Add: Restructuring 0.7 1.4 Add: Acquisition Related 0.1 - Add: Release of inventory fair value step- up for purchase accounting 0.1 - Add: Depreciation of PP&E fair value step-up for purchase accounting 0.2 0.1 Add: Accelerated Depreciation 0.6 0.4 Add: Asset Impairment 123.8 - Add: Non-Cash Interest Expense 3.0 3.1 Add: Tax Adjustment from GAAP to Non-GAAP 1.0 (0.3) Non-GAAP Net Income (Loss) (7.5) (6.4) Non-GAAP Basic EPS (0.16) (0.14) Non-GAAP Diluted EPS (0.16) (0.14) US$ millions Q4 18 Q1 19 GAAP Net Income (Loss) $(144.7) $(18.5) Add: Share-Based Comp 3.4 3.2 Add: Amortization 4.2 4.2 Add: Restructuring 0.7 1.4 Add: Acquisition Related 0.1 - Add: Release of inventory fair value step- up for purchase accounting 0.1 - Add: Depreciation of PP&E fair value step- up for purchase accounting 0.2 0.1 Add: Accelerated Depreciation 0.6 0.4 Add: Asset Impairment 123.8 - Add: Interest Expense 4.5 4.2 Subtract: Tax expense (benefit) 0.2 0.2 Non-GAAP Operating Income (Loss) $(6.9) $(4.8)

Q1 2019 Actual: GAAP to Non-GAAP Reconciliation 16 Amounts may not calculate precisely due to rounding Q1 2019 Conference Call | © 2019 Veeco Instruments Inc. Non-GAAP Adjustments In millions, except per share amounts GAAP Share-Based Compensation Amortization Other Non-GAAP Net Sales $99.4 $99.4 Gross Profit 34.7 0.5 35.2 Gross Margin 34.9% 35.5% Operating Expenses 48.9 (2.7) (4.2) (2.0) 40.0 Operating Income (Loss) (14.1) 3.2 4.2 2.0 (4.8) Net Income (Loss) $(18.5) 3.2 4.2 4.8 $(6.4) Income (Loss) Per Common Share: Basic $(0.40) $(0.14) Diluted (0.40) (0.14) Weighted Average Number of Shares: Basic 46.8 46.8 Diluted 46.8 46.8 Other Non-GAAP Adjustments Restructuring 1.4 Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting 0.1 Accelerated Depreciation 0.4 Subtotal 2.0 Non-Cash Interest Expense 3.1 Non-GAAP Tax Adjustment (0.3) Total Other 4.8

Q2 2019 Guidance: GAAP to Non-GAAP Reconciliation 17 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 $90–$110 $90–$110 Gross Profit 32–42 1 —— 33–43 Gross Margin 36%–38% 37%–39% Operating Expenses ~$50 3 4 3 ~$40 Operating Income (Loss) $(18)-$(8) 4 4 3 $(7)-$3 Net Income (Loss) $(22)–$(12) 4 4 5 $(9)–$1 Income (Loss) per Diluted Share $(0.47)–$(0.27) $(0.18)–$0.02 GAAP Net Income (Loss) $(22)–$(12) Share-Based Compensation 4 Amortization 4 Restructuring 2 Interest Expense, Net 4 Income Tax Expense (Benefit) 1 Non-GAAP Operating Income (Loss) $(7)–$3 Q1 2019 Conference Call | © 2019 Veeco Instruments Inc.

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