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29 July 2008


Veeco exceeds Q2 bookings, revenues and earnings guidance

For second-quarter 2008, Veeco Instruments Inc of Plainview, NY, USA has reported results ahead of its guidance for bookings, revenues and earnings.

Revenue was $114.4m, up 16% on $98.8m on a year ago and 12% on $102.3m last quarter (and ahead of guidance of $102-$110m). In particular, for Veeco’s largest segment (comprising 39% of total revenues), revenue for LED & Solar process equipment (i.e. MOCVD and MBE epitaxial deposition systems) was $45.1m. This is up 61% on $28m a year ago (due to strong end-user demand and expanding applications for high-brightness LEDs, with acceptances received for the K465 MOCVD system from LED-making customers). However, LED & Solar process equipment was up only 7% sequentially on $42.1m last quarter. Inventory rose by $9.9m to $115m, mainly in LED and solar process equipment due to the delay of several system shipments as a result of LED customer facilities not being ready.

Overall net income was $4.2m, compared to a net loss of $2.6m a year ago, due to higher revenue from customer pull-ins combined with the benefit of cost cutting and containment activities over the past year.

Bookings were $136.5m, up 21% on $112.5m a year ago (and the most in two years), and far ahead of guidance of $110-118m. This boosted order backlog by $32m to $211m (including $8.7m from the acquisition Mill Lane Engineering – see below).

In particular, LED & Solar bookings were $52.1m, up 43% on a year ago and 35% sequentially (as expected, now that Veeco’s latest-generation MOCVD reactors are gaining traction at key LED makers). The firm says that customers are making significant technology and capacity investments. Veeco has received multi-unit orders from five LED makers in Taiwan and China (several of which are first-time customers). Nearly $20m of the MOCVD orders are due to ship in 2009 (almost all secured by customer deposits and bank guarantees, as customers want to solidify their position in Veeco’s manufacturing slot plan).

In addition, “Veeco is beginning to build a meaningful solar process equipment business,” says CEO John R. Peeler. “MOCVD and MBE are seeing market pull for III-V concentrator and thin-film solar applications from both research institutes and commercial companies,” he adds. Veeco has also announced that, during the second quarter, it received a significant multi-unit order for TurboDisc K-475 As/P MOCVD systems from Boeing firm Spectrolab Inc of Sylmar, CA to support its manufacturing capacity expansion for III-V concentrator photovoltaic (CPV) cells.

For third-quarter 2008, Veeco forecasts revenues of $113-118m (including $2-3m from Mill Lane), as well as bookings of $113-118m (with some normal seasonality). “While we start the third quarter with a strong pipeline of prospects, particularly in our LED and Solar business, we are providing cautious guidance, given our very strong bookings level in the second quarter, historically slow customer buying patterns during the summer months, and the challenging overall economic environment,” says Peeler.

“At the mid-point of the year, even with the backdrop of difficult overall economic conditions, Veeco is achieving results ahead of our original expectations,” comments Peeler. “We remain on track to significantly improve Veeco’s performance on both the top and bottom line in 2008,” he adds. The firm forecasts full-year 2008 revenue of $450-455m (up 12-13% on 2007’s $402.5m ), including $165-170m for LED and Solar (up 42-47% on 2007’s $116m).

*Late in the second quarter, Veeco completed the purchase of Mill Lane Engineering of Lowell, MA (a key equipment supplier to Global Solar Energy Inc of Tucson, AZ, USA ), expanding its solar product line to include web coaters for flexible copper indium gallium diselenide (CIGS) photovoltaic applications. As expected, the business had no contribution to revenue due to purchase accounting requirements and the timing of the completion of the acquisition, and no new orders for web coaters were received during the quarter.

“We are in conversations with key solar companies focused on flexible photovoltaic technology,” says CEO John R. Peeler. “Initial customer feedback is that the Mill Lane web coaters are very well designed and competitive for size, cost of ownership and other critical characteristics,” he adds. “We are positioning Veeco to be a supplier of complete lines of vacuum processing tools for CIGS and other flexible photovoltaic applications. Veeco’s proprietary line of CIGS thermal sources, combined with our unique thin-film process knowledge, provides a key market advantage,” he continues. “We believe our timing on entering this market is right, as many of the CIGS companies are in the R&D stage and require additional support from an equipment partner to be successful as they successfully move to production.”

See related items:

Veeco wins multi-unit order from solar cell maker Spectrolab

Veeco acquires Mill Lane Engineering

Veeco’s epi equipment sales rise 25% on last quarter

Search: Veeco MOCVD MBE Solar cells LEDs

See: Veeco Company Profile

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