Veeco(US:VECO)2023-05-08 20:30Financial Performance - Total revenue for Q1 2023 was $153.5 million, a decrease of 2% compared to $156.4 million in Q1 2022 [131]. - Gross profit for Q1 2023 was $62.0 million, down 6% from $66.0 million in Q1 2022, with gross margins decreasing to 40% [131]. - Net income for Q1 2023 was $8.7 million, a decrease of 34% from $13.3 million in Q1 2022 [131]. - Net income for the three months ended March 31, 2023, was $8.7 million, down from $13.3 million in the same period of 2022, representing a decrease of approximately 34.5% [146]. - Net cash provided by operating activities was $13.9 million for the three months ended March 31, 2023, compared to $24.8 million in 2022, a decline of approximately 44% [146]. Market Performance - Semiconductor market sales grew 20% year-over-year to $93.1 million in Q1 2023, driven by laser annealing systems for trailing node logic devices [125]. - Sales in the Compound Semiconductor market declined 43% year-over-year to $21.2 million in Q1 2023 [132]. - Sales in the Data Storage market remained flat year-over-year at $21.5 million in Q1 2023, with expectations for revenue growth based on order activity [127]. Expenses and Investments - Research and development expenses increased by 14% to $27.6 million in Q1 2023, reflecting investments in new technologies and applications [136]. - The company incurred $30.4 million in cash outflows for acquisitions and capital expenditures during the three months ended March 31, 2023 [147]. Future Outlook - The company expects total revenue for 2023 to be in the range of $630 million to $670 million [129]. - The company anticipates challenges in supply chain and increased costs affecting gross margins throughout 2023 [120]. - The acquisition of SiC technology on January 31, 2023, is expected to accelerate entry into the high-growth SiC power epitaxy equipment market, with revenue anticipated starting in 2024 [126]. Cash and Financing - Cash and cash equivalents decreased from $154.9 million on December 31, 2022, to $140.7 million on March 31, 2023, a decline of approximately 9.5% [144]. - The outstanding principal balance of convertible senior notes is $132.5 million at 3.50% interest and $125.0 million at 3.75% interest, with maturity dates in 2025 and 2027, respectively [149]. - The company has access to a $150.0 million revolving credit facility, with an option to request an additional $75.0 million, expiring in December 2026 [150]. - Cash used in financing activities was $27.4 million for the three months ended March 31, 2023, primarily due to the repayment of 2023 Notes [148]. Foreign Sales and Investment - Approximately 80% of total net sales for the three months ended March 31, 2023, were from customers located outside the United States, up from 70% in the same period of 2022 [155]. - The investment portfolio had a fair value of approximately $112.2 million as of March 31, 2023, with a potential decrease of $0.4 million in value for a 100 basis point increase in interest rates [152]. - A 10% change in foreign exchange rates would have an immaterial impact on consolidated results, as most sales outside the U.S. are denominated in U.S. dollars [156].