Record Third Quarter 2010 for Veeco
John R. Peeler, Veeco's Chief Executive Officer, commented, "Veeco reported a milestone quarter in Q3 - including record levels of revenue of $277 million, gross margin of 49%, and EBITA of $96 million. This performance drove quarterly GAAP EPS to $2.16 per share and non-GAAP EPS to $1.46 per share, both new records for our company. We shipped over 100 MOCVD systems in the third quarter. In addition, on October 7th we completed the sale of our Metrology business to Bruker Corporation, creating a new Veeco focused on growth opportunities in our LED & Solar and Data Storage Process Equipment businesses. We generated a record $79 million in cash from operations during the quarter and are in the best financial position in our history." "Veeco's third quarter bookings totaled $278 million," continued Mr. Peeler, "with another very strong quarter in LED & Solar of $243 million, primarily MOCVD systems. Orders for MOCVD tools were placed by fifteen customers during the quarter, with strength continuing in China and additional account penetration in Taiwan. Veeco's Data Storage orders were $35 million, as technology buys continue for new Veeco deposition systems." The Company's Q3 '10 book-to-bill ratio was 1.0, and quarter end backlog was $569 million. On August 24th, Veeco announced that its Board of Directors had authorized the repurchase of up to $200 million of Veeco's common stock through August 2011. During the third quarter, Veeco purchased 930,000 shares of its stock at an average price of $34 per share, for a total of approximately $32 million. Q4 '10 Guidance Regarding the fourth quarter, Mr. Peeler commented, "We have recently experienced rescheduling of tool shipments from the fourth quarter into the first quarter by several customers in Korea and Taiwan. Due to the recent strong order rate from China, our current plan for Q4 revenue includes a significant amount of large multi-tool shipments to key Chinese customers, many of whom are currently building or expanding their facilities. While we currently expect that these tools will ship over the next few months, timing of revenue could shift into the first quarter due to customer facility readiness." Veeco's fourth quarter 2010 revenue is currently forecasted to be between $285 and $320 million. Earnings per share are currently forecasted to be between $1.96 to $2.35 on a GAAP basis and $1.46 to $1.74 on a non-GAAP basis. Mr. Peeler added, "We continue to see high levels of quoting activity for MOCVD systems, particularly in China and Taiwan, and our Data Storage business continues to experience healthy overall market conditions. We currently forecast that Veeco's fourth quarter orders will be equal to or better than the third quarter." Outlook and Opportunities Commenting about the Company's outlook, Mr. Peeler stated, "Further strength in MOCVD bookings currently forecasted for Q4 should enable us to exit 2010 with strong backlog, positioning Veeco for excellent revenue performance in the first half of 2011. We have built our manufacturing capacity to 120 or more tools per quarter, and will head into 2011 with the ability to flex quarterly shipments up or down as required by customer demand." "As we look to the future, we believe there may be an opportunity to sell thousands of MOCVD systems as LEDs fully penetrate display applications and adoption accelerates for solid state lighting in 2011 and 2012. In order to capitalize upon this opportunity, Veeco is expanding training, service and support functions in China, Taiwan and Korea, and accelerating our new product roadmap." "In our other businesses, quoting activity is picking up for our CIGS solar deposition systems as we make progress advancing these tools' process capabilities for high-efficiency/low cost solar cells. Our Data Storage business continues to perform exceptionally well this year, with new products that are meeting customer technology challenges and a flexible outsourced manufacturing model. I am extremely proud of all the progress that Veeco has made in 2010 to achieve record financial results and excited about our future outlook."
