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25 July 2006


HB-LED and wireless markets help drive Veeco’s Q2/2006 revenues to $111.6m

Veeco Instruments Inc, headquartered in Woodbury, N.Y., USA has announced its Q2/2006 financial results (ended June 30), and reports that orders from HB-LED and wireless sectors increased 106% over Q2/2005 to reach $27.4m.

Total revenue for the quarter increased 8% over Q2/2005, to $111.6m, and exceeded Veeco's guidance of $105-110m. Bookings exceeded Veeco’s guidance of $125-130m to reach $143.2m, an increase of 21% over Q2/2005. Gross margin was 44.5%, an increase of 250 basis points over Q2/2005. At $9.6m, second quarter earnings before interest, taxes and amortization (EBITA) were 58% higher than in Q2/2005. Net income was $3.0m, or $0.10 per share (GAAP), compared to a loss of ($0.4)m, or ($0.02) per share, last year, and above guidance of $0.02 to $0.08 per share.

Of the results, Veeco's chairman and CEO, Edward H. Braun, said: "Strong orders were driven by continued double digit market growth in the data storage and high brightness light emitting diode (HB-LED) sectors. Veeco's data storage orders were a record $71.4 million, up 18% from the prior year, and HB-LED/wireless orders were $27.4 million, up 106% from the prior year, reflecting market growth in embedded storage in consumer electronics, continued investment in perpendicular recording technology, and the beginning of HB-LED backlighting of small area flat panel displays. We see continued acceptance for new Veeco products in our Process Equipment and Metrology segments."

Regarding Veeco's outlook for 2006, Braun said: "On the strength of strong first half bookings and increased backlog, we are raising our estimate of 2006 revenues to $455 to $465 million. While we are encouraged by continued positive business conditions across our served end markets, we expect some normal seasonality in orders for the third quarter. Veeco is well positioned to benefit from multi-year growth opportunities tied to the hard drive industry's transition to perpendicular recording, new applications for LEDs, and continued broad-based use of Veeco's metrology solutions across data storage, semiconductor and scientific research markets."

It was also announced that Veeco’s president and COO, Don R. Kania, is leaving to join FEI Company in Portland, Oregon to become its president and CEO. His position at Veeco will not be replaced at this time.

Kania, 51, joined Veeco in 1998. Prior to that he held technical and general management positions at Lawrence Livermore National Laboratory and Los Alamos National Laboratory.  He holds B.S., M.S. and Ph.D. degrees in physics and engineering from the University of Michigan.  He is expected to start at FEI Company in mid-August 2006.

Visit: http://www.veeco.com