Second Quarter 2022 Highlights:

Revenues of $164.0 million, compared with $146.3 million in the same period last year
GAAP net income of $9.7 million, or $0.18 per diluted share, compared with $6.3 million, or $0.12 per diluted share in the same period last year
Non-GAAP net income of $20.0 million, or $0.35 per diluted share, compared with $17.9 million, or $0.35 per diluted share in the same period last year

PLAINVIEW, N.Y., Aug. 08, 2022 (GLOBE NEWSWIRE) -- Veeco Instruments Inc. (NASDAQ:VECO) today announced financial results for its second quarter ended June 30, 2022. 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	Q2 '22		Q2 '21
Revenue	$	164.0	$	146.3
Net income	$	9.7	$	6.3
Diluted earnings per share	$	0.18	$	0.12

Non-GAAP Results	Q2 '22		Q2 '21
Operating income	$	23.0	$	21.3
Net income	$	20.0	$	17.9
Diluted earnings per share	$	0.35	$	0.35

"We had another record revenue quarter in our semiconductor business with significant contributions coming from our laser annealing and advanced packaging lithography systems," commented Bill Miller, Veeco's Chief Executive Officer. "Demand is stemming predominantly from advanced and trailing node logic applications where Veeco's semiconductor exposure is greatest. Our new San Jose facility is on track to be completed by the end of the third quarter, and the increased manufacturing footprint is enabling our semiconductor growth."

"We're experiencing success with the investments we've made in our evaluation program as demonstrated by the continued adoption of our technologies by leading customers. Looking ahead, the Veeco United team remains committed to achieving our full year 2022 targets."

Guidance and Outlook

The following guidance is provided for Veeco's third quarter 2022:

Revenue is expected in the range of $160 million to $180 million
GAAP diluted earnings per share are expected in the range of $0.14 to $0.30
Non-GAAP diluted earnings per share are expected in the range of $0.32 to $0.48

Conference Call Information

A conference call reviewing these results has been scheduled for today, August 8, 2022 starting at 5:00pm ET. To join the call, dial 1-888-220-8474 (toll free) or 1-646-828-8193 and use passcode 6606156. 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 that 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 ion beam, laser annealing, lithography, MOCVD, and single wafer etch & clean technologies play an integral role in the fabrication and packaging of advanced semiconductor devices. With equipment designed to optimize 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

This press release contains "forward-looking statements", within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, as amended, that are based on management's expectations, estimates, projections and assumptions. Words such as "expects," "anticipates," "plans," "believes," "scheduled," "estimates" and variations of these words and similar expressions are intended to identify forward-looking statements. Forward-looking statements include, but are not limited to, those regarding anticipated growth and trends in our businesses and markets, industry outlooks and demand drivers, our investment and growth strategies, our development of new products and technologies, our business outlook for current and future periods, the impact of the COVID-19 pandemic, our ongoing transformation initiative and the effects thereof on our operations and financial results; and other statements that are not historical facts. These statements and their underlying assumptions are subject to risks and uncertainties and are not guarantees of future performance. Factors that could cause actual results to differ materially from those expressed or implied by such statements include, without limitation: the level of demand for our products; global economic and industry conditions; the effects of regional or global health epidemics, including the effects of the COVID-19 pandemic on the Company's operations and on those of our customers and suppliers; global trade issues, including the ongoing trade disputes between the U.S. and China, and changes in trade and export license policies; our dependency on third-party suppliers and outsourcing partners; the timing of customer orders; our ability to develop, deliver and support new products and technologies; our ability to expand our current markets, increase market share and develop new markets; the concentrated nature of our customer base; our ability to obtain and protect intellectual property rights in key technologies; our ability to achieve the objectives of operational and strategic initiatives and attract, motivate and retain key employees; the variability of results among products and end-markets, and our ability to accurately forecast future results, market conditions, and customer requirements; the impact of our indebtedness, including our convertible senior notes and our capped call transactions; and other risks and uncertainties described in our SEC filings on Forms 10-K, 10-Q and 8-K, and from time-to-time in our other SEC reports. All forward-looking statements speak only to management's expectations, estimates, projections and assumptions as of the date of this press release or, in the case of any document referenced herein or incorporated by reference, the date of that document. The Company does not undertake any obligation to update or publicly revise any forward-looking statements to reflect events, circumstances or changes in expectations after the date of this press release.

-financial tables attached-

Veeco Contacts:

Investors:	Anthony Bencivenga	(516) 252-1438	abencivenga@veeco.com
Media:	Kevin Long	(516) 714-3978	klong@veeco.com

Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)

	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021
Net sales	$	163,999		$	146,344		$	320,425		$	280,059
Cost of sales		99,732			86,178			190,146			164,978
Gross profit		64,267			60,166			130,279			115,081
Operating expenses, net:
Research and development		26,016			22,553			50,133			44,398
Selling, general, and administrative		22,950			21,466			45,844			41,722
Amortization of intangible assets		2,505			2,976			5,009			6,330
Other operating expense (income), net		(27	)		(81	)		(47	)		(36	)
Total operating expenses, net		51,444			46,914			100,939			92,414
Operating income		12,823			13,252			29,340			22,667
Interest expense, net		(2,635	)		(6,585	)		(5,438	)		(13,208	)
Income before income taxes		10,188			6,667			23,902			9,459
Income tax expense (benefit)		533			319			917			617
Net income	$	9,655		$	6,348		$	22,985		$	8,842

Income per common share:
Basic	$	0.19		$	0.13		$	0.46		$	0.18
Diluted	$	0.18		$	0.12		$	0.43		$	0.17

Weighted average number of shares:
Basic		49,697			48,743			49,702			48,758
Diluted		59,455			53,942			59,521			53,539

Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)

	June 30,		December 31,
	2022		2021
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	116,916	$	119,747
Restricted cash		727		725
Short-term investments		113,159		104,181
Accounts receivable, net		126,881		109,609
Contract assets		17,367		18,293
Inventories		176,491		170,858
Prepaid expenses and other current assets		17,743		25,974
Total current assets		569,284		549,387
Property, plant and equipment, net		105,031		99,743
Operating lease right-of-use assets		26,405		28,813
Intangible assets, net		28,896		33,905
Goodwill		181,943		181,943
Deferred income taxes		1,639		1,639
Other assets		3,454		3,546
Total assets	$	916,652	$	898,976

Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	47,074	$	44,456
Accrued expenses and other current liabilities		56,918		79,752
Customer deposits and deferred revenue		74,560		63,136
Income taxes payable		1,598		1,860
Current portion of long-term debt		20,120		—
Total current liabilities		200,270		189,204
Deferred income taxes		4,774		4,792
Long-term debt		254,055		229,438
Long-term operating lease liabilities		31,772		32,834
Other liabilities		5,044		5,080
Total liabilities		495,915		461,348

Total stockholders' equity		420,737		437,628
Total liabilities and stockholders' equity	$	916,652	$	898,976

Note on Reconciliation Tables

The below 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.

Reconciliation of GAAP to Non-GAAP Financial Data (Q2 2022)
(in thousands)
(unaudited)

				Non-GAAP Adjustments
				Share-Based
Three months ended June 30, 2022	GAAP			Compensation		Amortization		Other			Non-GAAP
Net sales	$	163,999									$	163,999
Gross profit		64,267		1,251				654				66,172
Gross margin		39.2	%									40.3	%
Operating expenses		51,444		(5,027	)	(2,505	)	(719	)			43,193
Operating income		12,823		6,278		2,505		1,373		^		22,979
Net income		9,655		6,278		2,505		1,537		^		19,975
_______________________________
^ - See table below for additional details.

Other Non-GAAP Adjustments (Q2 2022)
(in thousands)
(unaudited)

Three months ended June 30, 2022
Transition expenses related to San Jose expansion project	$	1,313
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting		60
Subtotal		1,373
Non-cash interest expense		239
Non-GAAP tax adjustment *		(75	)
Total Other	$	1,537
_______________________________
* - The ‘with or without' method is utilized to determine the income tax effect of all Non-GAAP adjustments.

Net Income per Common Share (Q2 2022)
(in thousands, except per share amounts)
(unaudited)

	Three months ended June 30, 2022
	GAAP		Non-GAAP
Numerator:
Net income	$	9,655	$	19,975
Interest expense associated with convertible notes		1,273		2,467
Net income available to common shareholders	$	10,928	$	22,442

Denominator:
Basic weighted average shares outstanding		49,697		49,697
Effect of potentially dilutive share-based awards		816		816
Dilutive effect of 2023 Convertible Senior Notes		—		504
Dilutive effect of 2025 Convertible Senior Notes		—		5,521
Dilutive effect of 2027 Convertible Senior Notes⁽¹⁾		8,942		6,771
Diluted weighted average shares outstanding		59,455		63,309

Net income per common share:
Basic	$	0.19	$	0.40
Diluted	$	0.18	$	0.35
_______________________________
⁽¹⁾ - The non-GAAP incremental dilutive shares includes the impact of the Company's capped call transaction issued concurrently with our 2027 Notes, and as such, an effective conversion price of $18.46 is used when determining incremental shares to add to the dilutive share count. The GAAP incremental dilutive shares does not include the impact of the Company's capped call transaction, and as such, an effective conversion price of $13.98 is used when determining incremental shares to add to the dilutive share count.

Reconciliation of GAAP to Non-GAAP Financial Data (Q2 2021)
(in thousands, except per share amounts)
(unaudited)

				Non-GAAP Adjustments
				Share-based
Three months ended June 30, 2021		GAAP		Compensation		Amortization		Other			Non-GAAP
Net sales	$	146,344									$	146,344
Gross profit		60,166		650				31				60,847
Gross margin		41.1	%									41.6	%
Operating expenses		46,914		(3,717	)	(2,976	)	(671	)			39,550
Operating income		13,252		4,367		2,976		702		^		21,297
Net income		6,348		4,367		2,976		4,214		^		17,905

Income per common share:
Basic	$	0.13									$	0.37
Diluted		0.12										0.35
Weighted average number of shares:
Basic		48,743										48,743
Diluted⁽¹⁾		53,942										51,772
_______________________________
^ - See table below for additional details.
⁽¹⁾ - The non-GAAP incremental dilutive shares includes the impact of the Company's capped call transaction issued concurrently with our 2027 Notes, and as such, no incremental shares are added to the dilutive share count in periods in which the average stock price per share is below $18.46. The GAAP incremental dilutive shares does not include the impact of the Company's capped call transaction, and as such, incremental shares are added to the dilutive share count in periods in which the average stock price per share is above $13.98, and the Company is in a net income position. The average stock price for the three months ended June 30, 2021 was $22.94, and therefore 1.3 million shares were included in the non-GAAP diluted share count, and 3.5 million shares were included in the GAAP diluted share count related to the 2027 Notes.

Other Non-GAAP Adjustments (Q2 2021)
(in thousands)
(unaudited)

Three months ended June 30, 2021
Transition expenses related to San Jose expansion project	$	609
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting		93
Subtotal		702
Non-cash interest expense		3,586
Non-GAAP tax adjustment *		(74	)
Total Other	$	4,214
_______________________________
* - The ‘with or without' method is utilized to determine the income tax effect of all Non-GAAP adjustments.

Reconciliation of GAAP Net Income to Non-GAAP Operating Income (Q2 2022 and 2021)
(in thousands)
(unaudited)

	Three months ended		Three months ended
	June 30, 2022		June 30, 2021
GAAP Net income	$	9,655	$	6,348
Share-based compensation		6,278		4,367
Amortization		2,505		2,976
Transition expenses related to San Jose expansion project		1,313		609
Depreciation of PP&E fair value step-up associated with the Ultratech purchase accounting		60		93
Interest (income) expense, net		2,635		6,585
Income tax expense (benefit)		533		319
Non-GAAP Operating income	$	22,979	$	21,297

Reconciliation of GAAP to Non-GAAP Financial Data (Q3 2022)
(in millions, except per share amounts)
(unaudited)

						Non-GAAP Adjustments
Guidance for the three months ending						Share-based
September 30, 2022	GAAP					Compensation	Amortization	Other	Non-GAAP
Net sales	$	160	-	$	180				$	160	-	$	180
Gross profit		64	-		75	1	—	1		66	-		77
Gross margin		40%	-		42%					41%	-		43%
Operating expenses		53	-		55	(5)	(3)	(1)		45	-		47
Operating income		11	-		20	6	3	1		21	-		30
Net income	$	7	-	$	17	6	3	2	$	18	-	$	28

Income per diluted common share	$	0.14	-	$	0.30				$	0.32	-	$	0.48

Income per Diluted Common Share (Q3 2022)
(in millions, except per share amounts)
(unaudited)

Guidance for the three months ending September 30, 2022	GAAP					Non-GAAP
Numerator:
Net income	$	7	-	$	17	$	18	-	$	28
Interest expense associated with convertible notes		1			3		2			2
Net income available to common shareholders	$	8	-	$	20	$	20	-	$	30

Denominator:
Basic weighted average shares outstanding		50			50		50			50
Effect of potentially dilutive share-based awards		1			1		1			1
Dilutive effect of 2023 Convertible Senior Notes		—			—		—			—
Dilutive effect of 2025 Convertible Senior Notes		—			6		6			6
Dilutive effect of 2027 Convertible Senior Notes⁽¹⁾		9			9		7			7
Diluted weighted average shares outstanding		60			66		64			64

Net income per common share:
Income per diluted common share	$	0.14	-	$	0.30	$	0.32	-	$	0.48
_______________________________
⁽¹⁾ - The non-GAAP incremental dilutive shares includes the impact of the Company's capped call transaction issued concurrently with our 2027 Notes, and as such, an effective conversion price of $18.46 is used when determining incremental shares to add to the dilutive share count. The GAAP incremental dilutive shares does not include the impact of the Company's capped call transaction, and as such, an effective conversion price of $13.98 is used when determining incremental shares to add to the dilutive share count.

Reconciliation of GAAP Net Income to Non-GAAP Operating Income (Q3 2022)
(in millions)
(unaudited)

Guidance for the three months ending September 30, 2022
GAAP Net income	$	7	-	$	17
Share-based compensation		6	-		6
Amortization		3	-		3
Interest expense, net		3	-		3
Other		2	-		1
Non-GAAP Operating income	$	21	-	$	30

Note: Amounts may not calculate precisely due to rounding.

Veeco Reports Second Quarter 2022 Financial Results