Veeco(US:VECO)2021-11-02 20:31Financial Performance - Net sales for the three months ended September 30, 2021, were $150.246 million, a 34% increase from $112.078 million in the same period of 2020[136]. - Gross profit for the three months ended September 30, 2021, was $63.169 million, a 29% increase from $49.142 million in the same period of 2020[136]. - Operating income for the three months ended September 30, 2021, was $16.416 million, a 135% increase from $6.985 million in the prior year[136]. - For the nine months ended September 30, 2021, net sales increased by 37% to $430.3 million compared to $315.2 million in the prior year period[152]. - Gross profit for the same period rose by 30% to $178.3 million, although gross margins decreased due to increased spending and product mix[155]. - Total operating expenses increased by 11% to $139.2 million, with a notable increase in research and development and selling expenses[152]. Market Segments - Semiconductor market sales reached $76.320 million, representing 51% of total sales and a 127% increase compared to $33.578 million in the prior year[138]. - Sales in the China region surged to $27.261 million, a 161% increase from $10.464 million in the same period of 2020[138]. - The Data Storage market generated $39.256 million in sales, a 6% increase from $36.897 million in the same period of 2020[138]. - The Compound Semiconductor market saw sales of $23.273 million, a 12% decrease from $26.584 million in the previous year[138]. - The Scientific & Other market reported sales of $11.397 million, a 24% decrease from $15.019 million in the prior year[138]. Research and Development - Research and development expenses increased to $21.999 million, a 15% rise from $19.129 million in the prior year, reflecting selective investments in new technology[136]. - Research and development expenses increased by 15% to $66.4 million, reflecting investments in new technology and applications[156]. - The company anticipates long-term revenue growth primarily from the Semiconductor market, supported by strategic investments in R&D and inventory[134]. Cash Flow and Capital Expenditures - Net cash provided by operating activities was $50.6 million for the nine months ended September 30, 2021, compared to $27.6 million in 2020, driven by a net income of $17.8 million and adjustments for non-cash items of $42.1 million[167]. - Capital expenditures for the nine months ended September 30, 2021, were $31.5 million, significantly higher than $3.3 million in 2020, primarily due to the build-out of a new facility in San Jose, California[168]. - Net cash used in investing activities was $57.1 million for the nine months ended September 30, 2021, compared to $39.9 million in 2020, reflecting increased capital expenditures and net changes in investments[168]. - The company expects increased capital expenditures and duplicate operating expenses during the transition to the new facility in San Jose, California[168]. Debt and Financing - Net interest expense for the nine months ended September 30, 2021, was $20.2 million, up from $16.7 million in the prior year, primarily due to new debt issuances[159]. - The company has $131.7 million of 2.70% convertible senior notes maturing on January 15, 2023, and $132.5 million of 3.50% convertible senior notes maturing on January 15, 2025[171]. - The company has sufficient capital resources and cash flows from operations to support scheduled interest payments on its debts[172]. - Net cash used in financing activities was $(1.6) million for the nine months ended September 30, 2021, compared to $30.6 million in 2020, primarily due to cash used to settle taxes related to employee equity programs[170]. Tax and Expenses - The company's tax expense for the nine months ended September 30, 2021, was $1.0 million, compared to $0.5 million in the prior year[163]. - Selling, general, and administrative expenses rose by 14% to $63.3 million, but as a percentage of revenue, these expenses decreased compared to the prior year[157]. Foreign Operations and Exchange Rates - Approximately 67% of net sales for the three months ended September 30, 2021, were from customers located outside the United States, up from 62% in the same period of 2020[180]. - A 10% change in foreign exchange rates would have an immaterial impact on the consolidated results of operations, as most sales outside the United States are denominated in U.S. dollars[181]. Investment Portfolio - The fair value of the investment portfolio was approximately $214.0 million at September 30, 2021, with a potential decrease of $2.1 million from a 100 basis point increase in interest rates[175].