Veeco Reports Second-Quarter and Six-Month 2001 Results
Veeco Instruments Inc. reports that sales for the quarter were $113.5 million, an increase of 11% from the $102.3 million reported in the second quarter of 2000. Second-quarter 2001 process equipment sales were $73.2 million, and metrology sales were $38.9 million.
Operating income (excluding a $1 million restructuring charge) was $15.7 million in the second quarter of 2001, an increase of 56% versus second-quarter 2000 operating income of $10.1 million (excluding merger and restructuring expenses). Second-quarter 2001 net income was $10.0 million ($0.40 per diluted share), compared to a $14.0 million net loss ($0.60 net loss per share) in the second quarter of 2000. Pro-forma diluted earnings per share for the second quarter of 2001 was $0.42 (35% tax rate and excluding restructuring charge) compared with $0.27 (35% tax rate and excluding merger and restructuring expenses) in the second quarter of 2000.
Veeco sales by market for the second quarter of 2001 were as follows: optical telecommunications 32%, data storage 33% and semiconductor/research 35%.
Bookings for the second quarter of 2001 were $81.5 million. Second-quarter 2001 process equipment bookings were $40.1 million and metrology bookings were $40.2 million. Second-quarter 2001 bookings were 16% optical telecommunications, 36% data storage and 48% semiconductor and research. The firm's book-to-bill ratio for the second quarter of 2001 was 0.72 to 1.0. During the second quarter, Veeco received cancellations of approximately 7% of its backlog, primarily in optical telecommunications.
Six-Month Financials
Sales for the six months ended June 30, 2001, were a record $240.7 million, an increase of 27% from the $189.2 million reported in the first six months of 2000. Process equipment sales were $153.6 million, and metrology sales were $83.9 in the first six months of 2001.
Operating income was a record $34.7 million (excluding a $1 million restructuring charge) in the first half of 2001, an increase of 78% versus first half 2000 operating income of $19.5 million (excluding merger and restructuring expenses). Net income in the first half of 2001 was $22.9 million ($0.91 per diluted share) compared to a $26.5 million net loss ($1.14 net loss per share) in the first six months of 2000. Included in the 2000 net loss was the cumulative effect charge for the change in accounting principle of $18.4 million (net of tax, $0.79 per share) associated with the adoption of SAB 101 effective January 1, 2000.
Proforma diluted earnings per share for the first six months of 2001 was $0.93 (35% tax rate and excluding restructuring charge) compared to $0.52 (35% tax rate and excluding merger and restructuring expenses and cumulative effect of change in accounting principle) for the first six months of 2000.
Bookings for the first six months of 2001 were $194.3 million. process equipment bookings were $113.0 million and metrology bookings were $77.4 million in the first six months of 2001. Veeco's bookings by market in the first six months of 2001 were 24% optical telecommunications, 37% data storage, and 39% semiconductor and research. Book-to-bill ratio for the first six months of 2001 was 0.81 to 1.0.
Edward H. Braun, Veeco Chairman, CEO, and President, commented, “We are pleased that despite a weak business environment, Veeco continues to deliver year-over-year sales and earnings growth. Our diversification of markets and products has helped Veeco during this downturn, and we remain confident that 2001 overall will be a revenue and earnings growth year for the Company. As previously noted, we are experiencing a slowdown in orders, particularly in optical telecommunications. As a result, we have taken cost reduction actions including a staff reduction of 130 people, approximately 8% of our workforce.”
Mr. Braun continued, “Commenting on our individual markets, the semiconductor industry overall appears to be at a bottom. Veeco's sales success in atomic force microscopy provided sequential order growth this quarter associated with technology purchases for 0.10 micron feature size, 300mm wafers, CMP and advanced etch applications. The data storage industry continues to invest in the development of advanced 50-100Gb/in2 thin film magnetic heads requiring the purchase of our advanced 10-target, ultra-high vacuum cluster deposition systems. While optical telecommunications is currently the weakest Veeco market, we have broadened our product line to include metrology and process equipment for fabrication of active devices in addition to thin film filters. In all of our markets, selected technology buys have allowed Veeco to outperform during this downturn, evidenced by our six-month book-to-bill ratio of 0.81, higher than the industry average.”
As mentioned above, Veeco has taken a series of cost reduction initiatives designed to improve the company's cost structure. These included the workforce reduction, a decrease in discretionary spending, and other steps. These actions resulted in a $1 million restructuring charge, principally related to severance costs, in the second quarter.
Veeco's current guidance for the third quarter is for revenues in the $100 million to $110 million range, with earnings per share between $0.30 and $0.38. Veeco currently forecasts third quarter bookings in the range of $70 million to $80 million. Due to the lack of visibility and uncertain business conditions going forward, Veeco will not be providing guidance beyond the current quarter.