Veeco(US:VECO)2025-02-14 19:11Revenue and Sales Performance - Semiconductor revenue increased by 13% in 2024, accounting for 65% of total revenue, driven by the Laser Annealing business [191]. - Total net sales for 2024 reached $717.3 million, an 8% increase from $666.4 million in 2023 [202]. - The Compound Semiconductor market saw a decline in sales by 11%, totaling $77.6 million in 2024 compared to $87.3 million in 2023 [203]. - Data Storage revenue increased by 12% to $98.9 million in 2024, up from $88.5 million in 2023 [203]. - Approximately 77% of the company's total net sales in 2024 were generated from customers located outside the United States [243]. - Net sales denominated in currencies other than the U.S. dollar accounted for approximately 5% of total net sales in 2024 [243]. - A 10% change in foreign exchange rates would have an immaterial impact on the consolidated results of operations due to most sales outside the U.S. being denominated in U.S. dollars [244]. Financial Performance - Gross profit for 2024 was $304.0 million, with a gross margin of 42%, down from 43% in 2023 [202]. - Operating income decreased by 4% to $67.0 million in 2024, compared to $69.9 million in 2023 [202]. - Net interest income for 2024 was $1.9 million, an increase from a net interest expense of $1.2 million in 2023, primarily due to a $2.3 million increase in interest income [213][214]. - The income tax benefit for 2024 was $4.9 million, compared to an expense of $2.0 million in 2023, driven by various tax benefits including $12.2 million related to asset impairments [217]. - Net cash provided by operating activities was $63.8 million in 2024, compared to $61.7 million in 2023, attributed to a net income of $73.7 million [220][221]. Expenses and Investments - Research and development expenses rose by 10% to $124.5 million in 2024, maintaining a flat percentage of revenue [208]. - Cash used in investing activities was $64.5 million in 2024, primarily due to capital expenditures and net investment activity [222]. - The company has $26.5 million outstanding principal balance of 3.50% convertible senior notes maturing in January 2025 [225]. - Future purchase obligations for inventory and equipment totaled $177.4 million as of December 31, 2024 [227]. Impairments and Charges - A non-cash impairment charge of $28.1 million was recorded in 2024 related to SiC technology acquired from Epiluvac [211]. - Net other operating income in 2024 included a $21.2 million reduction in expected earn-out payments to Epiluvac's previous shareholders [212]. - Amortization expense decreased in 2024 compared to 2023 due to certain intangible assets becoming fully amortized [210]. Market Outlook and Trends - The Semiconductor industry is projected to grow to approximately $650 billion in 2024, with long-term growth driven by trends such as AI and automotive electrification [188]. - The company anticipates a decline in revenue from the China market heading into 2025 due to moderated customer engagement [196]. Asset Management and Financial Reporting - Cash and cash equivalents totaled $145.6 million in 2024, down from $158.8 million in 2023, while short-term investments increased to $198.7 million from $146.7 million [218]. - The fair value of the company's fixed-income securities was approximately $198.7 million as of December 31, 2024, with a potential decrease of $1.3 million for a 100 basis point increase in interest rates [238]. - The company centrally manages its investment portfolios, considering investment opportunities, risks, and overall financing strategies [238]. - Deferred income taxes reflect the net tax effect of temporary differences and are adjusted for changes in tax rates and laws [236]. - The company may enter into monthly forward derivative contracts to mitigate currency exchange risk, using these instruments solely for hedging purposes [242]. - The carrying values of long-lived assets are reviewed for impairment, with impairment recognized if the carrying amount exceeds fair value [235]. - The company evaluates the remaining useful lives of intangible assets and amortizes them accordingly if revisions are deemed appropriate [235].