Filed by Veeco Instruments Inc.
Filed pursuant to Rules 165 and 425 promulgated under the
Securities Act of 1933, as amended, and deemed filed
pursuant to Rule 14a-12 promulgated under the
Securities Exchange Act of 1934, as amended
Subject Company: Veeco Instruments Inc.
Commission File No.: 0-16244
On July 29th, 2002, Veeco Instruments Inc. issued the following press release.
[LOGO] NEWS
Veeco Instruments Inc., 100 Sunnyside Blvd., Woodbury, NY 11797
Tel. 516-677-0200 FAX 516-677-0380
FOR IMMEDIATE RELEASE
FINANCIAL CONTACT: DEBRA WASSER, VP OF INVESTOR RELATIONS, 516-677-0200, X1472
TRADE CONTACT: FRAN BRENNEN, DIRECTOR OF MARKETING COMMUNICATIONS,
516-677-0200 X1222
VEECO REPORTS SECOND QUARTER AND SIX MONTH 2002 RESULTS
Woodbury, NY, July 29, 2002 -Veeco Instruments Inc. (NASDAQ: VECO) today
announced its financial results for the second quarter and six months ended June
30, 2002. The Company met its prior guidance for the second quarter, reporting
revenues of $77.3 million, a net loss of $1.6 million (($0.06) per share), and
pro forma earnings per share of $0.02. Second quarter 2002 bookings of $78.2
million increased 11% sequentially from the first quarter of 2002. Veeco's
Metrology orders increased 29% sequentially to $41.1 million, while Process
Equipment orders declined 3% to $37.1 million.
SECOND QUARTER 2002 RESULTS
Veeco's sales for the second quarter of 2002 were $77.3 million, a 31%
decrease from the $112.1 million reported for the second quarter of 2001.
Metrology sales were $40.4 million in the second quarter of 2002 compared to
$38.9 million in the second quarter of 2001. Veeco's Process Equipment sales
were $36.9 million in the second quarter of this year compared with $73.2
million in the second quarter of last year. Veeco's sales by market in the
second quarter of 2002 reflect the Company's broad end-market focus and
consisted of 39% data storage, 14% telecommunications/wireless, 12%
semiconductor and 35% research.
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Q2 2002 Results/Page 2
Veeco incurred an operating loss of $2.0 million for the second quarter
of 2002, compared to operating income of $15.5 million for the second quarter of
2001. Excluding amortization expense and restructuring charges of $1.0 million
in both periods, Veeco's second quarter 2002 operating income (EBITA) was $2.2
million compared to $17.4 million for the second quarter of 2001. (Second
quarter amortization expense was $3.2 million and $0.9 million for 2002 and
2001, respectively). Veeco's second quarter 2002 net loss was $1.6 million
(($0.06) per share) compared to net income of $10.0 million ($0.40 per diluted
share) in the second quarter of 2001.
Pro forma earnings per share for the second quarter of 2002 was $0.02
compared with $0.46 in the second quarter of 2001. Pro forma earnings per share
is calculated using a 35% tax rate and excludes the $1.0 million restructuring
charge taken in both the second quarter of 2002 and 2001 and amortization
expense. The second quarter 2002 restructuring charge primarily relates to
severance related costs for both management and manufacturing employees in the
Process Equipment Group. In the second quarter of 2001 the Company also took a
$1.0 million charge related to personnel and business relocation costs,
principally related to plant consolidations and work-force reductions, which
included both management and manufacturing employees at several of the Company's
facilities.
Veeco's bookings for the second quarter of 2002 were $78.2 million,
down 3% from the $80.3 million reported in the second quarter of 2001, but up
11% sequentially from the first quarter of 2002. Second quarter 2002 Metrology
bookings were $41.1 million compared to $40.2 million in the second quarter of
2001. Second quarter 2002 Process Equipment bookings were $37.1 million compared
with $40.1 million in the second quarter of 2001. The Company's second quarter
book-to-bill ratio was 1.01. Veeco's bookings in the second quarter consisted of
31% data storage, 12% telecommunications/wireless, 16% semiconductor and 41%
research.
FIRST HALF 2002 RESULTS
Veeco's sales for the first half of 2002 were $157.5 million, a 34%
decrease from the $237.5 million reported for the first half of 2001. Metrology
sales were $75.7 million
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Q2 2002 Results/Page 3
in the first half of 2002 compared to $83.9 million in the first half of 2001.
Veeco's Process Equipment sales were $81.8 million in the first half of 2002
compared with $153.6 million in the first half of last year. Veeco's sales by
market in the first half of 2002 consisted of 37% data storage, 18%
telecommunications/wireless, 10% semiconductor and 35% research.
Veeco incurred an operating loss of $5.3 million for the first half of
2002, compared to operating income of $35.1 million for the first half of 2001.
Excluding amortization expense and restructuring charges in both periods,
Veeco's first half 2002 operating income (EBITA) was $3.5 million compared to
$38.4 million for the first half of 2001. (First half amortization expense was
$6.9 million and $2.3 million for 2002 and 2001, respectively). Veeco's first
half 2002 net loss was $5.1 million (($0.18) per share) compared to net income
of $22.9 million ($0.91 per diluted share) in the first half of 2001.
Pro forma earnings per share for the first half of 2002 was $0.01
compared with $1.02 in the first six months of 2001. Pro forma earnings per
share is calculated using a 35% tax rate and excludes the $1.9 million
restructuring charge taken in the first half of 2002, and the $1.0 million
restructuring charge taken in the first half of 2001, amortization expense and
excludes the loss from discontinued operations.
Veeco's bookings for the first half of 2002 were $148.5 million
compared to $190.5 million reported in the first half of 2001. First half 2002
Process Equipment bookings were $75.6 million compared with $113.0 million in
the first half of 2001. First half 2002 Metrology bookings were $72.9 million
compared to $77.5 million in the first half of 2001. The Company's first half
book-to-bill ratio was 0.94. Veeco's bookings in the first half of 2002 by
market consisted of 33% data storage, 15% telecommunications/wireless, 15%
semiconductor and 37% research.
MANAGEMENT REVIEW OF RESULTS
Edward H. Braun, Veeco's Chairman, President and Chief Executive
Officer commented, "While industry conditions remain difficult, we are pleased
to have met both our revenue and earnings forecasts for the second quarter."
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Q2 2002 Results/Page 4
Mr. Braun continued, "Veeco's bookings in the second quarter improved
11% over the first quarter of 2002. The bookings increase was driven by
continued technology buys in both semiconductor and scientific research
segments, with semiconductor orders up 34% sequentially and record research
orders improving 41% sequentially. Increased semiconductor Metrology orders
reflect greater use of Veeco's in-line atomic force microscope (AFM) tools for
0.13 micron, copper and 300mm applications. Record scientific research Metrology
orders are a result of increased nanotechnology and life science use of our new
AFM and scanning probe microscope products enabling molecular and atomic
imaging. As forecasted at the beginning of the second quarter, data storage
orders were flat compared with the first quarter, and our
telecommunications/wireless business was down 34%, reflecting the continued
difficult environment in this sector. We are pleased that Veeco's market
diversification has enabled us to report three consecutive quarters of order
improvement despite swings within our different industry segments. We expect
additional technology order growth to continue in the third quarter."
VEECO-FEI MERGER UPDATE
Veeco recently announced the signing of a significant definitive merger
agreement with FEI Company (NASDAQ: FEIC). Veeco and FEI have submitted the
Hart-Scott-Rodino notification filings to the Federal Trade Commission and
Department of Justice, and we currently plan to file our preliminary joint proxy
statement/prospectus with the Securities and Exchange Commission (SEC) in early
August. Each company will seek stockholder approval of the merger at special
meetings to be held in the coming months and currently expect to close the
merger in October.
Regarding the proposed merger, Mr. Braun commented, "Veeco and FEI have
established a combined integration team, which is focusing on merger synergies
and working to create an integrated, efficient, highly profitable Veeco FEI. We
believe
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Q2 2002 Results/Page 5
that the Veeco FEI merger represents a strategically compelling opportunity for
the stockholders of both companies and will create an exciting new leadership
equipment supplier. Veeco FEI will have critical mass and growth opportunities
driven by our complementary technologies in 3D Metrology for the semiconductor,
scientific research and data storage markets. In addition, the new company will
possess a strong sales and service channel to support our worldwide customers
and a stronger, broader management team."
VEECO'S OUTLOOK
Veeco currently estimates that third quarter 2002 sales will be in the
range of $75-$80 million, with pro-forma earnings per share between $0.02 -
$0.04 (using a 35% tax rate and excluding amortization expense). Veeco currently
forecasts that third quarter 2002 bookings will exceed $75 million.
INVESTOR CONFERENCE CALL/WEBCAST
As previously announced, Veeco will host an investor conference call
this morning, Monday, July 29th, at 10 am EDT to review the Company's financials
and operations for the second quarter of 2002. Interested parties may listen to
the call live by calling 1-888-855-5428 or through an audio webcast at
http://www.veeco.com (click on Investor Information), where this call will be
archived for future reference. A telephonic playback of the conference call will
also be available starting this afternoon at 888-203-1112 (confirmation number
687916).
SEC FILINGS
In connection with their proposed merger, Veeco and FEI will be jointly
preparing a proxy statement/registration statement on Form S-4 containing a
prospectus relating to the shares to be issued to FEI stockholders and will be
filing such joint proxy statement/registration statement with the SEC as soon as
practicable. Investors and security holders are urged to read this document when
it becomes available because it will contain important information about the
proposed merger. Investors and security holders may obtain copies of this
document, when it has been filed with the SEC, as well as other SEC filings of
Veeco and FEI, free of charge from the SEC's website at www.sec.gov as well as
from the applicable company by directing a request to Investor Relations for
Veeco, at (516) 677-0200, Ext. 1403 and to Investor Relations for FEI, at (503)
640-7500 Ext. 7527.
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Q2 2002 Results/Page 6
Veeco and its executive officers and directors may be deemed to be participants
in the solicitation of proxies from the Veeco and FEI stockholders with respect
to the Veeco/FEI transaction. Information regarding such individuals is included
in Veeco's proxy statement dated April 9, 2002 relating to its 2002 annual
meeting of stockholders, available free of charge from the SEC and Veeco as
indicated above.
FEI and its executive officers and directors may be deemed to be participants in
the solicitation of proxies from the FEI and Veeco stockholders with respect to
the Veeco/FEI transaction. Information regarding such individuals is included in
FEI's proxy statement dated April 17, 2002 relating to its 2002 annual meeting
of stockholders, available free of charge from the SEC and FEI as indicated
above.
On July 12, 2002, Veeco and FEI filed with the SEC current reports on Form 8-K
containing the full text of their merger agreement. These filings are available
free of charge from the SEC and the applicable company as identified above.
ABOUT VEECO
Veeco Instruments Inc. is a worldwide leader in process equipment and metrology
tools for the optical telecommunications/wireless, data storage, semiconductor
and research markets. Manufacturing and engineering facilities are located in
New York, California, Colorado, Arizona and Minnesota. Global sales and service
offices are located throughout the United States, Europe, Japan and Asia
Pacific. Additional information on Veeco can be found at http://www.veeco.com.
---------------------
TO THE EXTENT THAT THIS NEWS RELEASE DISCUSSES EXPECTATIONS ABOUT MARKET
CONDITIONS OR ABOUT MARKET ACCEPTANCE AND FUTURE SALES OF VEECO'S PRODUCTS, OR
OTHERWISE MAKES STATEMENTS ABOUT THE FUTURE, SUCH STATEMENTS ARE FORWARD-LOOKING
AND ARE SUBJECT TO A NUMBER OF RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THE STATEMENTS MADE. THESE FACTORS INCLUDE THE
CYCLICAL NATURE OF THE TELECOMMUNICATIONS/WIRELESS, DATA STORAGE, SEMICONDUCTOR
AND RESEARCH MARKETS, RISKS ASSOCIATED WITH THE ACCEPTANCE OF NEW PRODUCTS BY
INDIVIDUAL CUSTOMERS AND BY THE MARKETPLACE, AND OTHER FACTORS DISCUSSED IN THE
BUSINESS DESCRIPTION AND MANAGEMENT'S DISCUSSION AND ANALYSIS SECTIONS OF
VEECO'S ANNUAL REPORT ON FORM 10-K AND ANNUAL REPORT TO SHAREHOLDERS.
-FINANCIAL TABLES ATTACHED-
VEECO INSTRUMENTS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
UNAUDITED
THREE MONTHS ENDED
JUNE 30,
2002 2001
-------------- ----------
Net sales $ 77,339 $ 112,095
Cost of sales 42,137 58,956
---------- ---------
Gross profit 35,202 53,139
Costs and expenses:
Research and development expense 13,928 14,805
Selling, general and administrative expense 19,335 20,714
Amortization expense 3,172 881
Restructuring expense 1,050 1,000
Other (income)/expense, net (285) 226
---------- ---------
Operating (loss) income (1,998) 15,513
Interest expense (income), net 1,477 (397)
---------- ---------
(Loss) income from continuing operations before income taxes (3,475) 15,910
Income tax (benefit) provision (1,856) 5,435
---------- ---------
(Loss) income from continuing operations (1,619) 10,475
Loss from discontinued operations, net of income taxes - (475)
---------- ---------
Net (loss) income $ (1,619) $ 10,000
========== =========
(Loss) income per common share from continuing operations $ (0.06) $ 0.42
Loss from discontinued operations - (0.02)
---------- ---------
Net (loss) income per common share $ (0.06) $ 0.40
========== =========
Diluted (loss) income per common share from continuing operations $ (0.06) $ 0.42
Loss from discontinued operations - (0.02)
---------- ---------
Diluted net (loss) income per common share $ (0.06) $ 0.40
========== =========
Pro forma diluted net income per share, excluding charges $ 0.02 (1) $ 0.46 (2)
Weighted average shares outstanding 29,083 24,767
Diluted weighted average shares outstanding 29,403 25,215
========== ========
(1) Pro forma earnings per share for the quarter ended June 30, 2002 is
calculated by applying a 35% tax rate and excluding amortization expense of $3.2
million and a $1.0 million charge to earnings related to severance related costs
for both management and manufacturing employees in the Process Equipment group.
(2) Pro forma earnings per share for the quarter ended June 30, 2001 is
calculated by applying a 35% tax rate and excluding amortization expense of $0.9
million and a $1.0 million charge to earnings principally related to plant
consolidations and work-force reductions, which include both management and
manufacturing employees in all operations of the business.
VEECO INSTRUMENTS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
UNAUDITED
SIX MONTHS ENDED
JUNE 30,
2002 2001
------------- ---------
Net sales $ 157,488 $237,481
Cost of sales 88,551 125,652
--------- --------
Gross profit 68,937 111,829
Costs and expenses:
Research and development expense 27,257 29,912
Selling, general and administrative expense 38,372 41,848
Amortization expense 6,919 2,317
Restructuring expense 1,887 1,000
Other (income) expense, net (236) 1,632
--------- --------
Operating (loss) income (5,262) 35,120
Interest expense (income), net 2,963 (1,164)
--------- --------
(Loss) income from continuing operations before income taxes (8,225) 36,284
Income tax (benefit) provision (3,454) 12,593
--------- --------
(Loss) income from continuing operations (4,771) 23,691
Loss from discontinued operations, net of income taxes (346) (818)
--------- --------
Net (loss) income $ (5,117) $ 22,873
========= ========
(Loss) income per common share from continuing operations $ (0.16) $ 0.96
Loss from discontinued operations (0.02) (0.03)
--------- --------
Net (loss) income per common share $ (0.18) $ 0.93
========= ========
Diluted (loss) income per common share from continuing operations $ (0.16) $ 0.94
Loss from discontinued operations (0.02) (0.03)
--------- --------
Diluted net (loss) income per common share $ (0.18) $ 0.91
========= ========
Pro forma diluted net income per share, excluding charges $ 0.01 (1) $ 1.02 (2)
Weighted average shares outstanding 29,052 24,722
Diluted weighted average shares outstanding 29,408 25,222
(1) Pro forma earnings per share for the six months ended June 30, 2002 is
calculated by applying a 35% tax rate and excluding amortization expense of $6.9
million and a $1.9 million charge to earnings related to severance related costs
for both management and manufacturing employees in the Process Equipment group.
The calculation also excludes $0.3 million of losses (net of taxes) on the
disposal of discontinued operations.
(2) Pro forma earnings per share for the six months ended June 30, 2001, is
calculated by applying a 35% tax rate and excluding amortization expense of $2.3
million and a $1.0 million charge to earnings principally related to plant
consolidations and work-force reductions, which include both management and
manufacturing employees in all operations of the business. The calculation also
excludes $0.8 million of losses (net of taxes) related to the discontinued
operations.
VEECO INSTRUMENTS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
JUNE 30, DECEMBER 31,
2002 2001
----------- -----------
(UNAUDITED) (AUDITED)
ASSETS
Current assets:
Cash and cash equivalents $221,343 $203,154
Accounts receivable, net 73,026 88,449
Inventories 104,163 102,103
Other current assets 61,882 68,784
--------- --------
Total current assets 460,414 462,490
Property, plant and equipment, net 74,711 78,547
Excess of cost over net assets acquired, net 125,585 125,585
Long-term investments 30,453 23,519
Other assets, net 61,402 65,378
--------- --------
Total assets $752,565 $755,519
========= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Other current liabilities $75,307 $89,901
Deferred gross profit 6,757 14,566
--------- --------
Current liabilities 82,064 104,467
Long-term liabilities 246,653 227,081
Shareholders' equity 423,848 423,971
--------- --------
Total liabilities and shareholders' equity $752,565 $755,519
========= ========