Veeco Instruments Inc VECO
Q3 2012 Earnings Call Transcript

Transcript Call Date 10/22/2012

Operator: Good day, everyone, and welcome to the Veeco's Third Quarter 2012 Earnings Conference Call. Today's call is being recorded. For opening remarks and introductions, I would now like to turn the conference over to Senior Vice President of Corporate Communications and Investor Relations, Ms. Debra Wasser. Ms. Wasser, please go ahead.

Debra Wasser - SVP, IR and Corporate Communications: Thank you, operator, and thank you all for joining us today. Joining me today are our CEO John Peeler and our CFO Dave Glass. Today's earnings release is available on the Veeco website. Please note that we have prepared a slide presentation to accompany today's webcast. We encourage you to follow along with the slides on

This call is being recorded by Veeco Instruments and is copyrighted material. It cannot be recorded or rebroadcast without Veeco's expressed permission. Your participation implies consent to our taping.

To the extent that this call discusses expectations about market conditions, market acceptance, and future sales of the Company's products, future disclosures, future earnings expectations, or otherwise makes statements about the future, such statements are forward-looking and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These factors are discussed in the business description and Management's Discussion and Analysis sections of the Company's report on Form 10-K and Annual Report to shareholders, and in our subsequent quarterly reports on Form 10-Q, current reports on Form 8-K, and press releases. Veeco does not take any obligation to update any forward-looking statements, including those made on this call, to reflect future events or circumstances after the date of such statements.

During this call, the management may address non-GAAP financial measures. Information regarding such non-GAAP financial measures, including reconciliation to GAAP measures of performance, is available on our website.

I'll now turn the call over to John for opening remarks.

John R. Peeler - CEO: Thanks, Deb. Given the overall challenges in the market, we delivered pretty good results this quarter. Revenue was $127 million, EBITA was $17 million and EPS was $0.34. All of these are in line with our guidance. We did a good job of managing working capital and generated $46 million in cash from operations, so cash now stands at (indiscernible) and that resulted in weak orders. With all of our businesses hitting down cycle simultaneously Veeco's bookings came in at only $84 million. While MOCVD orders remained low in Q3, there are some positive trends in LED. General lighting is growing and customer tool utilization rates are up. Korean customers report utilizations in the 60% to 80% range; Taiwan is 80% to 100% and China leaders are over 90%. Top LED companies are reporting more stable business conditions than they have in a while and orders are modest, but they are adding capacity.

Let me tell you about four of the deals that we recently won. In China, HC SemiTek a well-established company is adding our newest generation system. Our MHP offers a 20% uniformity improvement and a 5% cost of ownership advantage over their original MaxBright. In Taiwan, the market leader added capacity with Veeco tools. In U.S., our market leader purchased order performance reactors and they said that our tools helped them make more money. In Japan, our MaxBright was selected by a leader for their GaN-on-Silicon program. We are winning the most important deals in every region.

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