News

28 October 2008

 

Veeco hits third quarter revenue guidance, but bookings take a tumble

For third quarter 2008 (ended 30 September 2008), epitaxial, process, and metrology equipment maker Veeco Instruments Inc of Plainview, NY, USA has reported revenue of $115.7m, up 18% on $97.7m for the same period last year, and within the firm’s guidance of $113-$118m. However, bookings for the quarter were down 24% on Q3/2007’s $118.3m to $90.2m, and below guidance of $113-$118m.

Operating income for Q3/2008 increased to $0.1m, compared with an operating loss of -$4.2m in Q3/2007. The firm’s Q3/2008 earnings before interest, taxes and amortization excluding certain charges (EBITA) was $8.3m, which excludes $5.0m in charges relating to restructuring and the acquisition of Mill Lane Engineering, compared to a loss of -$1.7m for Q3/2007, which also excluded restructuring charges.

Q3/2008 net loss was -$1.7m, compared to a net loss of -$5.7m for same period last year. Excluding amortization expenses and using a 35% tax rate, and excluding the $5.0m in charges referred to above, as well as 2007 restructuring charges, Q3/2008 earnings per share were $0.15, compared to a loss of -$0.05 in Q3/2007.

"Veeco's third quarter bookings of $90.2 million were lower than originally anticipated," said John R. Peeler, Veeco's CEO. "While we anticipated a sequential bookings decline from the strong second quarter results, bookings were weaker than expected due to global economic conditions, with customers delaying or foregoing purchases. Veeco experienced the sharpest sequential order decline in metal organic chemical vapor deposition tools as the HB-LED industry digests the significant number of new tools purchased this past year."

For the first nine months of 2008, Veeco reported revenue of $332.5m, up just over 12% on the $295.7m for the same period in 2007. Nine month operating income was $6.5m, compared with a loss of -$3.5m for the same period in 2007. EBITA was $22.3m, compared to $6.8m last year, which excludes certain charges in both periods. Net income for the nine month period was $0.9m, compared to a net loss of -$8.0m last year.

"Veeco delivered strong top line revenue growth and a significant recovery in EBITA profitability in 2008 compared to 2007. Third quarter 2008 revenue and profitability increased significantly year-over-year in both our LED & Solar and Data Storage businesses, and profit improved in our Metrology business both sequentially and when compared to last year. For the first nine months of 2008, Veeco's revenue is up 12% and profitability has more than tripled from last year." adds Peeler.

Of particular interest, Veeco’s LED & Solar Process Equipment segment recorded Q3/2008 revenues of approximately $41m, up around 30% on almost $32m for the same period in 2007 (but down from $45.1m last quarter). However, bookings for the period are down by almost half from $48.6m in Q3/2007 to $25.7m this year. For the nine month period, revenues climbed 56% to $128.2m from $82.1 for the first nine months of 2007, but bookings have fallen from $121.4m to $116.5 for the period. EBITA for the nine month period was $22.8M, up 160% on last year.

Veeco’s LED & Solar Process Equipment business accounted for 39% of revenue in the first nine months of 2008, up from 29% for full-year 2007, making it the largest segment. Of this, solar products (mainly MOCVD and thermal deposition sources) represented approximately 20% of LED & Solar segment revenues and orders.

The firm’s Data Storage Process Equipment business recorded revenues $43.2m for Q3/2008, up on $31m for Q3/2007. Bookings for the quarter remained stable at $32.3m, flat on the same period for 2007. For the Metrology segment of the business, Q3/2008 revenues were $31.4m, down from $34.7m in 2007. Metrology segment bookings for the quarter were also down, from $37.3m to $32.0m.

Veeco forecasts Q4/2008 revenues to be in the range of $110-$118m, and adds that since it is evaluating various cost cutting actions it is likely to incur restructuring charges in the quarter. Excluding these potential charges, amortization of $3.3m, and using a 35% tax rate, Veeco's Q4/2008 earnings per share are currently forecasted to be between $0.08 to $0.15 on a non-GAAP basis.

"We currently expect Veeco's full-year 2008 performance to remain solid, despite the backdrop of difficult economic conditions, with revenues in the range of $440-$450, up approximately 10% from last year, and profit improving dramatically," said Peeler. "The Company is well-positioned to capitalize on exciting multi-year technology trends across our LED & Solar, Data Storage and Metrology businesses."

Assuming the high-end of Veeco’s Q4 revenue guidance, for the full-year 2008, Veeco’s LED & Solar Process Equipment business is forecast to grow by approximately 47%, from $116m in 2007 to around $170m. The Data Storage Process Equipment segment is expected to grow 10%, from $136m to around $150m. However, the Metrology segment looks set to shrink by approximately 13% on 2007, to around $130m.

"While we have a healthy prospect list for new orders in the fourth quarter," continued Peeler, "it appears that the global economic climate and constrained financing environment may cause a broad slowdown in capital equipment purchases by our customers, with uncertainty as to the depth and duration of the downturn. Due to this limited visibility, we are unable to give an accurate estimate of fourth quarter orders. We are taking corrective actions to lower our cost structure in preparation for what is likely to be a down revenue year in 2009. Our goal is to keep Veeco profitable on the EBITA line by lowering our spending while maintaining strategic investments in R&D, particularly in our LED & Solar business"

See related items:

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Veeco acquires Mill Lane Engineering

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