Veeco Revenue Drops Sharply in 2013

Veeco Instruments Inc. announced its financial results for the fourth quarter ended December 31, 2013. Veeco reports its results on a U.S. generally accepted accounting principles (“GAAP”) basis, and also provides results excluding certain items. Please refer to the attached table for details of the reconciliation between GAAP operating results and Non-GAAP operating results. All results presented herein are for Veeco’s “Continuing Operations.”
GAAP Results ($M except per share data)
Non-GAAP Results ($M except per share data)
Q4 ‘13
Q4 ‘12
Q4 ‘13
Q4 ‘12
Adjusted EBITA
Net loss
Net loss
Per share loss
Per share loss
“Veeco’s full year 2013 revenue was $332 million, a decline of 36% from 2012, with all of our businesses experiencing down cycles,” commented John R. Peeler, Chairman and Chief Executive Officer. “Fourth quarter revenue was $73 million, within our guidance range. Very weak gross margins and high operating expenses contributed to poor bottom line performance. A highlight for the quarter was our continued solid cash management in a challenging environment.” Fourth quarter LED & Solar revenues were $56 million, of which $50 million was MOCVD. Data Storage revenues were $17 million.
Peeler continued, “As expected, fourth quarter bookings remained weak at $85 million, down 7% sequentially. We haven’t yet seen a recovery in business conditions. MOCVD bookings decreased 22% sequentially to $52 million and have been at trough levels for over two years. MBE and Data Storage bookings improved slightly from the prior quarter, to $11 million and $22 million, respectively. And while not included in reported fourth quarter bookings, we received a purchase order from the world leader in mobile OLED displays for a next generation Fast Array Scanning Atomic Layer Deposition (FAST-ALD™) prototype system.
“While 2013 was a challenging year, we remain positive about trends in LED lighting and our new growth opportunity in flexible OLED encapsulation for mobile phones,” added Peeler. “Our R&D capability, technology leadership position, world class sales and support organization, flexible manufacturing approach and solid balance sheet provide a strong foundation for the future.”
First Quarter 2014 Guidance and Outlook
Veeco’s first quarter 2014 revenue is currently forecasted to be between $85 million and $95 million, with gross margins between 33-35% and operating spending in the range of $42-43 million.
Peeler commented, “While it is too early to call a turn in our MOCVD business, we are seeing some encouraging signs. LED fab utilization rates appear to be relatively stable and high at all key accounts and solid state lighting adoption is accelerating. We are talking to leading customers about potential capacity expansions, and our orders are likely to improve this quarter.
Our priority for 2014 is to take the steps necessary to transition the Company back to profitable growth. We are focused on four areas to improve our performance: 1) developing and launching game-changing new products that enable cost effective LED lighting, flexible OLED encapsulation and other emerging technologies; 2) executing manufacturing cost reduction initiatives and lowering expenses wherever possible; 3) driving process improvement initiatives to make us more efficient; and 4) improving product differentiation, customer value and pricing to stem margin erosion. We anticipate that Veeco will run at a loss for a couple of quarters, but see a very bright future for the long run,” concluded Peeler.
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