Veeco reports 3Q 2011 results, LED revenues up 7%
PLAINVIEW, N.Y.--Veeco Instruments Inc. (Nasdaq:VECO) announced its financial results for the third quarter ended September 30, 2011.
Veeco reports its results on a U.S. generally accepted accounting principles (“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 and reflect the discontinuation of Veeco’s CIGS Solar Systems business.
GAAP Results ($M except EPS)
Q3 ‘11 Q3 ‘10
Revenues $268.0 $277.1
Net income $52.6 $93.7
EPS (diluted) $1.31 $2.22
Non-GAAP Results ($M except EPS)
Q3 ‘11 Q3 ‘10
Net income $53.3 65.4
EPS (diluted) $1.33 $1.55
Third Quarter Results in Line with Guidance
John R. Peeler, Veeco’s Chief Executive Officer, commented, “Veeco reported a solid third quarter, with revenues of $268 million, non-GAAP net income and earnings per share of $53 million and $1.33, respectively, all at the mid to high end of our guidance. LED & Solar revenues increased 7% sequentially to $234 million, including $220 million in MOCVD, while Data Storage revenues were $34 million, down 25% sequentially. Veeco has continued to execute within the challenging overall business environment, particularly in China, where customer facility readiness and credit tightening remain significant issues. Veeco’s new MaxBright™ MOCVD System represented nearly half of the quarter’s MOCVD revenue, including broad-scale customer acceptance at tier one LED manufacturers.”
“Veeco’s third quarter orders were impacted by weak near-term LED industry demand, low MOCVD equipment utilization rates in Asia, and decreased business activity in China,” commented Mr. Peeler. “In addition, negative global macro-economic data points caused customers to slow or cut their capacity expansion plans.” Veeco’s third quarter bookings were $133 million, a decline of 57% sequentially. LED & Solar orders declined 59% sequentially to $112 million, with MOCVD orders at $103 million. Data Storage orders were $21 million, down 44% sequentially. The Company’s Q3 2011 book-to-bill ratio was .50 to 1. Veeco recorded backlog adjustments of $34 million during the quarter. Veeco’s quarter-end backlog was $389 million.
During the third quarter, under its Board authorized share buy-back program initiated in August 2010, Veeco purchased $154 million in stock at an average price of $38.63 per share.
Fourth Quarter 2011 Guidance & Outlook
Veeco’s fourth quarter 2011 revenue is currently forecasted to be between $175 million and $215 million. Earnings per share are currently forecasted to be between $0.46 to $0.78 on a GAAP basis, and $0.54 to $0.86 on a non-GAAP basis. For the full year, Veeco’s guidance is $963 million to $1.0 billion, with earnings per share forecasted to be between $4.49 - $4.79 on a GAAP basis and $4.81 to $5.11 on a non-GAAP basis. Please refer to the attached financial table for more details.
Mr. Peeler commented, “Despite the difficult overall environment, we are proud that the Company expects to deliver $1 billion in 2011 revenue at the high end of guidance. This is a tremendous accomplishment and speaks to our technology leadership position, close connectivity to our global customers and ability to execute in a challenging environment.”
“Our current expectation is orders will remain depressed for a few quarters,” continued Mr. Peeler. “While there are many data points indicating that LED lighting is accelerating, weak backlighting demand continues to cause low factory utilization rates. In Data Storage, planned industry consolidations combined with weak PC demand is causing our key customers to delay capex. In addition, global macro-economic concerns will likely have a dampening effect on our business heading into 2012. With our variable cost model, combined with plans to decrease spending levels to reflect the challenging business environment, we are confident we will remain profitable and expect to deliver double-digit EBITA performance next year.”
Mr. Peeler concluded, “While we do not know how long this slowdown will last, LED pricing declines will continue to stimulate demand for solid state lighting on a global basis. We expect wide-spread adoption of LED lighting led first by the commercial, municipal and industrial sectors, which make up 75% of the lighting market, followed by residential users as economic benefits of using LED-based products become more apparent. Despite some level of cyclicality which is to be expected, there is an enormous multi-year growth opportunity for MOCVD, aligning with our overall expectation of 5,000+ reactors from 2011 to 2015. With the industry’s most productive MOCVD platforms, Veeco’s market position is the best it has ever been. We believe the Company can continue to gain share as LED lighting hits an inflection point in 2012 and 2013.”
Conference Call Information
A conference call reviewing these results has been scheduled for 5:00pm ET today at 1-877-718-5095 (toll free) or 1-719-325-4929 using passcode 4998835. The call will also be webcast live on the Veeco website at www.veeco.com. A replay of the call will be available starting at 8:00pm ET tonight through 8:00pm ET on November 7, 2011 at 888-203-1112 or 719-457-0820, using passcode 4998835, or on the Veeco website. Please follow along with our slide presentation also posted on the website.
Veeco makes equipment to develop and manufacture LEDs, solar cells, hard disk drives and other devices. We support our customers through product development, manufacturing, sales and service sites in the U.S., Korea, Taiwan, China, Singapore, Japan, Europe and other locations. Please visit us at www.veeco.com.
Debra Wasser, 516-677-0200 x1472 SVP Investor Relations & Corporate Communications