Veeco Instruments Inc. EBITDA jumped on 18,175% and Revenue increased on 8.3%
02/11/2021 • About Veeco Instruments Inc. (
$VECO) • By InTwits
Veeco Instruments Inc. reported 2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Veeco Instruments Inc. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2016-2020 is 0.0%. Average EBITDA Margin for the same period was -18.7%
- Veeco Instruments Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.0%. At the same time it's in pair with industry average of 14.0%
- CAPEX is quite volatile: $7m in 2020, $11m in 2019, $13m in 2018, $24m in 2017, $11m in 2016
- The company has potentially unprofitable business model: ROIC is 3.2%
- It operates with medium-size leverage: Net Debt/EBITDA is 3.4x while industry average is -1.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 8.3%. Revenue growth showed acceleration in 20Q4 - it increased 22.7% YoY. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 4.2 pp from 5.0% to 9.3% in 2020.
Gross Margin increased on 5.1 pp from 37.7% to 42.8% in 2020. During 2016-2020 Gross Margin bottomed in 2018 at 35.7% and was growing since that time. SG&A as a % of Revenue decreased on 2.2 pp from 19.0% to 16.8% in 2020.
Net Income margin surged on 16.9 pp from -18.8% to -1.8% in 2020.
Investments (CAPEX, working capital and M&A)
In 2020 the company had CAPEX/Revenue of 1.5%. Veeco Instruments Inc.'s CAPEX/Revenue decreased on 3.6 pp from 5.1% in 2017 to 1.5% in 2020. It's average level of CAPEX/Revenue for the last three years was 2.1%.
Return on investment
The company operates at low but positive ROIC (3.2%) and negative ROE (-2.1%). ROIC increased on 8.7 pp from -5.4% to 3.2% in 2020. ROE surged on 17.2 pp from -19.4% to -2.1% in 2020.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.4x and Debt / EBITDA is 5.7x. Net Debt / EBITDA dropped on 573.7x from 577.2x to 3.4x in 2020. Debt increased on 5.4% while cash showed almost no change in 2020.
Veeco Instruments Inc. has no short term refinancing risk: cash is higher than short term debt (3,125.0%).
Management team
Veeco Instruments Inc.'s CEO is William J Miller "Bill". William J Miller "Bill" has 2 years tenure with the company. John P Kiernan is a the company's CFO. John P Kiernan has spent 1 year at the company.
Financial and operational results
FY ended 12/31/2020
Veeco Instruments Inc. ($VECO) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 332.5 | 475.7 | 542.1 | 419.3 | 454.2 | 8.3% |
| Gross Profit | 132.9 | 176.2 | 193.7 | 158.2 | 194.3 | 22.8% |
| SG&A | 77.6 | 100.2 | 92.1 | 79.7 | 76.3 | -4.4% |
| EBITDA | -87.8 | -21.8 | -365.5 | 0.3 | 58.7 | 18,174.8% |
| Net Income | -122.2 | -51.4 | -407.1 | -78.7 | -8.4 | |
Balance Sheet
|
|---|
| Cash | 277.4 | 279.7 | 212.3 | 129.3 | 129.6 | 0.3% |
| Short Term Debt | 0.4 | 0.0 | 0.0 | 4.2 | 4.1 | -1.1% |
| Long Term Debt | 0.8 | 275.6 | 287.4 | 310.4 | 327.4 | 5.5% |
Cash flow
|
|---|
| Capex | 11.5 | 24.3 | 12.7 | 10.9 | 6.8 | -37.4% |
Ratios
|
|---|
| Revenue growth | -30.3% | 43.1% | 14.0% | -22.6% | 8.3% | |
| EBITDA growth | -628.1% | -75.2% | 1,578.7% | -100.1% | 18,174.8% | |
|
|---|
| Gross Margin | 40.0% | 37.0% | 35.7% | 37.7% | 42.8% | 5.1% |
| EBITDA Margin | -26.4% | -4.6% | -67.4% | 0.1% | 12.9% | 12.8% |
| SG&A, % of revenue | 23.4% | 21.1% | 17.0% | 19.0% | 16.8% | -2.2% |
| Net Income Margin | -36.8% | -10.8% | -75.1% | -18.8% | -1.8% | 16.9% |
| CAPEX, % of revenue | 3.5% | 5.1% | 2.3% | 2.6% | 1.5% | -1.1% |
|
|---|
| ROIC | -17.9% | -8.2% | -44.1% | -5.4% | 3.2% | 8.7% |
| ROE | -18.7% | -7.2% | -63.7% | -19.4% | -2.1% | 17.2% |
| Net Debt/EBITDA | | | | 577.2x | 3.4x | -573.7x |
Veeco Instruments Inc. ($VECO) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 105 | 99 | 112 | 139 | | 5.2% | 0.8% | 2.9% | 22.7% |
| EBITDA | 14 | 9 | 16 | 22 | | - | - | 548.3% | 224.5% |
| Net Income | -1 | -8 | 1 | -0 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 162 | 188 | 148 | 130 | | -4.2% | 16.4% | 9.1% | 0.3% |
| Short Term Debt | 4 | 4 | 4 | 4 | | -10.7% | -7.6% | -11.7% | -1.1% |
| Long Term Debt | 313 | 326 | 328 | 327 | | 4.6% | 8.5% | 8.2% | 5.5% |
Ratios
|
|---|
| Gross Margin | 44.4% | 42.5% | 43.8% | 40.9% | | 9.5% | 5.4% | 5.1% | 1.2% |
| EBITDA Margin | 13.1% | 9.6% | 14.2% | 16.1% | | 17.1% | 10.9% | 12.0% | 10.0% |
| Net Income Margin | -0.5% | -8.4% | 0.5% | -0.1% | | 18.1% | 7.5% | 11.3% | 29.0% |
Peers in Semiconductor Equipment
Below we provide Veeco Instruments Inc. benchmarking against other companies in Semiconductor Equipment industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Xperi Corporation ($XPER) | - | 44.0% | 8.7% | -31.0% | 218.5% |
| DAQO New Energy Corp. ($DQ) | - | 41.1% | -6.7% | 16.0% | 93.0% |
| Advanced Energy Industries, Inc. ($AEIS) | - | 38.7% | 7.1% | 9.7% | 79.5% |
| Ichor Holdings ($ICHR) | - | 61.7% | 25.6% | -24.6% | 47.3% |
| ACM Research, Inc. ($ACMR) | - | 33.4% | 104.5% | 44.1% | 45.7% |
| |
|---|
| Median (27 companies) | 5.0% | 24.2% | 15.5% | -0.2% | 16.9% |
|---|
| Veeco Instruments Inc. ($VECO) | - | 43.1% | 14.0% | -22.6% | 8.3% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Xperi Corporation ($XPER) | 99.8% | 98.3% | 96.7% | 97.0% | 91.2% |
| PDF Solutions, Inc. ($PDFS) | 58.6% | 53.4% | 50.1% | 60.9% | 58.2% |
| Teradyne, Inc. ($TER) | 54.7% | 57.2% | 58.1% | 58.4% | 57.2% |
| Nova Measuring Instruments Ltd. ($NVMI) | 45.9% | 59.1% | 57.8% | 54.2% | 56.8% |
| Kulicke and Soffa Industries, Inc. ($KLIC) | 45.7% | 47.2% | 46.1% | 47.1% | 47.8% |
| |
|---|
| Median (27 companies) | 37.3% | 44.0% | 41.2% | 40.5% | 42.4% |
|---|
| Veeco Instruments Inc. ($VECO) | 40.0% | 37.0% | 35.7% | 37.7% | 42.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Xperi Corporation ($XPER) | 47.6% | 23.4% | 34.3% | 16.4% | 40.8% |
| DAQO New Energy Corp. ($DQ) | 43.3% | 49.1% | 36.1% | 27.1% | 38.0% |
| Teradyne, Inc. ($TER) | 3.4% | 29.6% | 27.9% | 30.3% | 33.8% |
| Cabot Microelectronics Corporation ($CCMP) | 23.4% | 27.2% | 31.5% | 20.1% | 31.6% |
| Entegris, Inc. ($ENTG) | 21.7% | 25.6% | 27.1% | 24.7% | 29.3% |
| |
|---|
| Median (25 companies) | 12.1% | 16.2% | 16.6% | 12.9% | 15.9% |
|---|
| Veeco Instruments Inc. ($VECO) | -26.4% | -4.6% | -67.4% | 0.1% | 12.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| DAQO New Energy Corp. ($DQ) | 29.5% | 19.8% | 47.4% | 79.7% | 17.5% |
| Photronics, Inc. ($PLAB) | 10.4% | 20.4% | 17.3% | 32.4% | 11.6% |
| Cabot Microelectronics Corporation ($CCMP) | 4.1% | 4.2% | 3.6% | 5.4% | 11.3% |
| Amkor Technology, Inc. ($AMKR) | 16.5% | 13.1% | 12.7% | 11.7% | 10.9% |
| ACM Research, Inc. ($ACMR) | 2.9% | 1.8% | 2.5% | 0.9% | 9.5% |
| |
|---|
| Median (24 companies) | 2.2% | 2.8% | 3.0% | 3.4% | 3.9% |
|---|
| Veeco Instruments Inc. ($VECO) | 3.5% | 5.1% | 2.3% | 2.6% | 1.5% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Teradyne, Inc. ($TER) | -2.9% | 23.8% | 22.6% | 29.2% | 40.3% |
| DAQO New Energy Corp. ($DQ) | 12.7% | 23.2% | 12.2% | 5.6% | 18.5% |
| Entegris, Inc. ($ENTG) | 10.3% | 14.7% | 15.4% | 11.3% | 16.4% |
| Advanced Energy Industries, Inc. ($AEIS) | 41.2% | 45.7% | 31.3% | 6.9% | 15.5% |
| Ultra Clean Holdings, Inc. ($UCTT) | 7.8% | 27.5% | 10.5% | 4.1% | 14.8% |
| |
|---|
| Median (27 companies) | 7.6% | 13.1% | 12.1% | 5.6% | 10.5% |
|---|
| Veeco Instruments Inc. ($VECO) | -17.9% | -8.2% | -44.1% | -5.4% | 3.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Cohu, Inc. ($COHU) | -6.0x | -2.7x | - | 10.1x | 2.9x |
| Xperi Corporation ($XPER) | 4.2x | 5.0x | 2.6x | 6.1x | 2.1x |
| Cabot Microelectronics Corporation ($CCMP) | -1.3x | -1.8x | -1.9x | 3.6x | 2.0x |
| Entegris, Inc. ($ENTG) | 0.7x | 0.1x | 1.1x | 1.6x | 1.0x |
| MKS Instruments, Inc. ($MKSI) | 1.7x | 0.1x | -0.5x | 1.5x | 0.8x |
| |
|---|
| Median (23 companies) | -1.3x | -0.7x | -1.0x | -0.4x | -0.4x |
|---|
| Veeco Instruments Inc. ($VECO) | - | - | - | 577.2x | 3.4x |
