VEECO INSTRUMENTS INC, 10-Q filed on 5/7/2019
Quarterly Report
v3.19.1
Document and Entity Information - shares
 3 Months Ended
Mar. 31, 2019
Apr. 25, 2019
Document and Entity Information    
Entity Registrant Name VEECO INSTRUMENTS INC  
Entity Central Index Key 0000103145  
Document Type 10-Q  
Document Period End Date Mar. 31, 2019  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Current Reporting Status Yes  
Entity Filer Category Large Accelerated Filer  
Entity Common Stock, Shares Outstanding   48,675,196
Entity Small Business false  
Entity Emerging Growth Company false  
Document Fiscal Year Focus 2019  
Document Fiscal Period Focus Q1  
v3.19.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Current assets:    
Cash and cash equivalents $ 169,439 $ 212,273
Restricted cash 804 809
Short-term investments 67,215 48,189
Accounts receivable, net 74,860 66,808
Contract assets 10,479 10,397
Inventories 148,103 156,311
Deferred cost of sales 2,921 3,072
Prepaid expenses and other current assets 24,943 22,221
Total current assets 498,764 520,080
Property, plant, and equipment, net 77,737 80,284
Operating lease right-of-use-assets 12,874  
Intangible assets, net 80,931 85,149
Goodwill 184,302 184,302
Deferred income taxes 1,869 1,869
Other assets 29,117 29,132
Total assets 885,594 900,816
Current liabilities:    
Accounts payable 36,315 39,611
Accrued expenses and other current liabilities 44,040 46,450
Customer deposits and deferred revenue 68,881 72,736
Income taxes payable 792 1,256
Total current liabilities 150,028 160,053
Deferred income taxes 5,675 5,690
Long-term debt 290,473 287,392
Operating lease long-term liabilities 8,382  
Other liabilities 9,238 9,906
Total liabilities 463,796 463,041
Stockholders' equity:    
Preferred stock, $0.01 par value; 500,000 shares authorized; no shares issued and outstanding.
Common stock, $0.01 par value; 120,000,000 shares authorized; 48,675,196 and 48,547,417 shares issued at March 31, 2019 and December 31, 2018, respectively; 48,675,196 and 48,024,685 shares outstanding at March 31, 2019 and December 31, 2018, respectively 487 485
Additional paid-in capital 1,058,179 1,061,325
Accumulated deficit (638,726) (619,983)
Accumulated other comprehensive income 1,858 1,820
Treasury stock, at cost, 522,732 shares at December 31, 2018.   (5,872)
Total stockholders' equity 421,798 437,775
Total liabilities and stockholders' equity $ 885,594 $ 900,816
v3.19.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Mar. 31, 2019
Dec. 31, 2018
Consolidated Balance Sheets    
Preferred stock, par value (in dollars per share) $ 0.01 $ 0.01
Preferred stock, shares authorized 500,000 500,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, authorized shares 120,000,000 120,000,000
Common stock, shares issued 48,675,196 48,547,417
Common stock, shares outstanding 48,675,196 48,024,685
Treasury stock, shares   522,732
v3.19.1
Consolidated Statements of Operations - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Consolidated Statements of Operations    
Net sales $ 99,371 $ 158,574
Cost of sales 64,655 101,894
Gross profit 34,716 56,680
Operating expenses, net:    
Research and development 23,340 24,320
Selling, general, and administrative 19,902 26,383
Amortization of intangible assets 4,218 13,532
Restructuring 1,430 2,695
Acquisition costs   1,342
Other, net (34) (157)
Total operating expenses, net 48,856 68,115
Operating income (loss) (14,140) (11,435)
Interest income 1,245 624
Interest expense (5,445) (5,246)
Income (loss) before income taxes (18,340) (16,057)
Income tax expense (benefit) 190 (230)
Net income (loss) $ (18,530) $ (15,827)
Income (loss) per common share:    
Basic (in dollars per share) $ (0.40) $ (0.34)
Diluted (in dollars per share) $ (0.40) $ (0.34)
Weighted average number of shares:    
Basic (in shares) 46,848 46,963
Diluted (in shares) 46,848 46,963
v3.19.1
Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Consolidated Statements of Comprehensive Income (Loss)    
Net income (loss) $ (18,530) $ (15,827)
Other comprehensive income (loss), net of tax:    
Unrealized gain (loss) on available-for-sale securities 27 (8)
Foreign currency translation 11 32
Total other comprehensive income (loss), net of tax 38 24
Total comprehensive income (loss) $ (18,492) $ (15,803)
v3.19.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Cash Flows from Operating Activities    
Net income (loss) $ (18,530) $ (15,827)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:    
Depreciation and amortization 8,796 17,726
Non-cash interest expense 3,081 2,859
Deferred income taxes (15) (269)
Share-based compensation expense 3,157 4,537
Changes in operating assets and liabilities:    
Accounts receivable and contract assets (8,134) (11,177)
Inventories and deferred cost of sales 8,489 4,555
Prepaid expenses and other current assets (2,457) 3,824
Accounts payable and accrued expenses (12,260) 2,009
Customer deposits and deferred revenue (3,855) (17,559)
Income taxes receivable and payable, net (463) (2,283)
Other, net (100) (202)
Net cash provided by (used in) operating activities (22,291) (11,807)
Cash Flows from Investing Activities    
Capital expenditures (2,180) (2,259)
Proceeds from the sale of investments 22,500 34,000
Payments for purchases of investments (41,258) (54,300)
Net cash provided by (used in) investing activities (20,938) (22,559)
Cash Flows from Financing Activities    
Cash withholdings for employee stock purchase plan 1,021 1,136
Restricted stock tax withholdings (642) (427)
Purchases of common stock   (592)
Net cash provided by (used in) financing activities 379 117
Effect of exchange rate changes on cash and cash equivalents 11 32
Net increase (decrease) in cash, cash equivalents, and restricted cash (42,839) (34,217)
Cash, cash equivalents, and restricted cash - beginning of period 213,082 280,583
Cash, cash equivalents, and restricted cash - end of period 170,243 246,366
Supplemental Disclosure of Cash Flow Information    
Interest paid 4,693 4,674
Income taxes paid 2,341 2,373
Non-cash operating and financing activities    
Net transfer of property, plant and equipment to inventory 130 $ 339
Net transfer of inventory to property, plant and equipment $ 238  
v3.19.1
Basis of Presentation
 3 Months Ended
Mar. 31, 2019
Basis of Presentation  
Basis of Presentation

Note 1 — Basis of Presentation

 

The accompanying unaudited Consolidated Financial Statements of Veeco have been prepared in accordance with U.S. GAAP as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 270 for interim financial information and with the instructions to Rule 10-01 of Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements as the interim information is an update of the information that was presented in Veeco’s most recent annual financial statements. For further information, refer to Veeco’s Consolidated Financial Statements and Notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2018 (“2018 Form 10-K”). In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal, recurring nature.

 

Veeco reports interim quarters on a 13-week basis ending on the last Sunday of each quarter. The fourth quarter always ends on the last day of the calendar year, December 31. The 2019 interim quarters end on March 31, June 30, and September 29, and the 2018 interim quarters ended on April 1, July 1, and September 30. These interim quarters are reported as March 31, June 30, and September 30 in Veeco’s interim consolidated financial statements.

 

Revenue Recognition

 

Revenue is recognized upon the transfer of control of the promised product or service to the customer in an amount that reflects the consideration the Company expects to receive in exchange for such product or service. The Company’s contracts with customers generally do not contain variable consideration. In the rare instances where variable consideration is included, the Company estimates the amount of variable consideration and determines what portion of that, if any, has a high probability of significant subsequent revenue reversal, and if so, that amount is excluded from the transaction price. The Company’s contracts with customers frequently contain multiple deliverables, such as systems, upgrades, components, spare parts, installation, maintenance, and service plans. Judgment is required to properly identify the performance obligations within a contract and to determine how the revenue should be allocated among the performance obligations. The Company also evaluates whether multiple transactions with the same customer or related parties should be considered part of a single contract based on an assessment of whether the contracts or agreements are negotiated or executed within a short time frame of each other or if there are indicators that the contracts are negotiated in contemplation of one another.

   

When there are separate units of accounting, the Company allocates revenue to each performance obligation on a relative stand-alone selling price basis. The stand-alone selling prices are determined based on the prices at which the Company separately sells the systems, upgrades, components, spare parts, installation, maintenance, and service plans. For items that are not sold separately, the Company estimates stand-alone selling prices generally using an expected cost plus margin approach.

   

Most of the Company’s revenue is recognized at a point in time when the performance obligation is satisfied. The Company considers many facts when evaluating each of its sales arrangements to determine the timing of revenue recognition, including its contractual obligations and the nature of the customer’s post-delivery acceptance provisions. The Company’s system sales arrangements, including certain upgrades, generally include field acceptance provisions that may include functional or mechanical test procedures. For many of these arrangements, a customer source inspection of the system is performed in the Company’s facility, test data is sent to the customer documenting that the system is functioning to the agreed upon specifications prior to delivery, or other quality assurance testing is performed internally to ensure system functionality prior to shipment. Historically, such source inspection or test data replicates the field acceptance provisions that are performed at the customer’s site prior to final acceptance of the system. When the Company objectively demonstrates that the criteria specified in the contractual acceptance provisions are achieved prior to delivery either through customer testing or the Company’s historical experience of its tools meeting specifications, transfer of control of the product to the customer is considered to have occurred and revenue is recognized upon system delivery since there is no substantive contingency remaining related to the acceptance provisions at that date. For new products, new applications of existing products, or for products with substantive customer acceptance provisions where the Company cannot objectively demonstrate that the criteria specified in the contractual acceptance provisions have been achieved prior to delivery, revenue and the associated costs are deferred. The Company recognizes such revenue and costs upon obtaining objective evidence that the acceptance provisions can be achieved, assuming all other revenue recognition criteria have been met.

   

In certain cases the Company’s contracts with customers contain a billing retention, typically 10% of the sales price, which is billed by the Company and payable by the customer when field acceptance provisions are completed. Revenue recognized in advance of the amount that has been billed is recorded as a contract asset on the Consolidated Balance Sheets.

   

The Company recognizes revenue related to maintenance and service contracts over time based upon the respective contract term. Installation revenue is recognized over time as the installation services are performed. The Company recognizes revenue from the sales of components, spare parts, and specified service engagements at a point in time, which is typically consistent with the time of delivery in accordance with the terms of the applicable sales arrangement.

   

The Company may receive customer deposits on system transactions. The timing of the transfer of goods or services related to the deposits is either at the discretion of the customer or expected to be within one year from the deposit receipt. As such, the Company does not adjust transaction prices for the time value of money. Incremental direct costs incurred related to the acquisition of a customer contract, such as sales commissions, are expensed as incurred since the expected amortization period is one year or less.

 

The Company has elected to treat shipping and handling costs as a fulfillment activity, and the Company includes such costs in cost of services when the Company recognizes revenue for the related goods. Taxes assessed by governmental authorities that are collected by the Company from a customer are excluded from revenue.

 

Leases

 

At contract inception, the Company determines if an arrangement is a lease, or contains a lease, of an identified asset for which the Company has the right to obtain substantially all of the economic benefits from its use and the right to direct its use. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term, while lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term. The implicit discount rate in the Company’s leases generally cannot readily be determined, and therefore the Company uses its incremental borrowing rate based on information available at lease commencement date in determining the present value of future payments. The Company has options to renew or terminate certain leases. These options are included in the determination of lease term when it is reasonably certain that the Company will exercise such options. The Company does not separate lease and non-lease components in determining ROU assets or lease liabilities for real estate leases. Additionally, the Company does not recognize ROU assets or lease liabilities for leases with original terms or renewals of one year or less.

 

Recently Adopted Accounting Standards

 

In February 2016, the FASB issued ASU 2016-02: Leases, which, along with subsequent ASUs related to this topic, has been codified as Accounting Standards Codification 842 (“ASC 842”). ASC 842 generally requires operating lessee rights and obligations to be recognized as assets and liabilities on the balance sheet. The new standard, which the Company adopted effective January 1, 2019, offers a transition option whereby companies can recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than in the earliest period presented. The Company has adopted using this transition method, and therefore prior period balances have not been adjusted. In addition, ASC 842 provides for a number of optional exemptions in transition. The Company has elected certain exemptions whereby prior conclusions regarding lease identification, lease classification, and initial direct costs were not reassessed under the new standard. The adoption of the standard impacted the Company’s Consolidated Balance Sheets through the recognition of ROU assets and lease liabilities of approximately $14.2 million each as of January 1, 2019, but did not have an impact on the Consolidated Statements of Operations, Statements of Comprehensive Income, or Statements of Cash Flows.

 

v3.19.1
Income (Loss) Per Common Share
 3 Months Ended
Mar. 31, 2019
Income (Loss) Per Share  
Income (Loss) Per Share

Note 2 — Income (Loss) Per Common Share

 

Basic income (loss) per share is calculated by dividing net income (loss) by the weighted average number of shares outstanding during the period. Diluted income per share is calculated by dividing net income by the weighted average number of shares used to calculate basic income (loss) per share plus the weighted average number of common share equivalents outstanding during the period. The dilutive effect of outstanding options to purchase common stock and share-based awards is considered in diluted income per share by application of the treasury stock method. The dilutive effect of performance share units is included in diluted income per common share in the periods the performance targets have been achieved. The computations of basic and diluted income (loss) per share for the three months ended March 31, 2019 and 2018 are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31,

 

 

 

    

2019

    

2018

    

    

 

 

(in thousands, except per share amounts)

 

 

Net income (loss)

 

$

(18,530)

 

$

(15,827)

 

 

Net income (loss) per common share:

 

 

 

 

 

 

 

 

Basic

 

$

(0.40)

 

$

(0.34)

 

 

Diluted

 

$

(0.40)

 

$

(0.34)

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average shares outstanding

 

 

46,848

 

 

46,963

 

 

Effect of potentially dilutive share-based awards

 

 

 —

 

 

 —

 

 

Diluted weighted average shares outstanding

 

 

46,848

 

 

46,963

 

 

 

 

 

 

 

 

 

 

 

Common share equivalents excluded from the diluted weighted average shares outstanding since Veeco incurred a net loss and their effect would be antidilutive

 

 

320

 

 

169

 

 

Potentially dilutive shares excluded from the diluted calculation as their effect would be antidilutive

 

 

2,426

 

 

2,092

 

 

Maximum potential shares to be issued for settlement of the Convertible Senior Notes excluded from the diluted calculation as their effect would be antidilutive

 

 

8,618

 

 

8,618

 

 

 

v3.19.1
Assets
 3 Months Ended
Mar. 31, 2019
Assets  
Assets

Note 3 — Assets

 

Investments

 

Short-term investments are generally classified as available-for-sale and reported at fair value, with unrealized gains and losses, net of tax, presented as a separate component of stockholders’ equity under the caption “Accumulated other comprehensive income” in the Consolidated Balance Sheets. These securities may include U.S. treasuries, government agency securities, corporate debt, and commercial paper, all with maturities of greater than three months when purchased. All realized gains and losses and unrealized losses resulting from declines in fair value that are other than temporary are included in “Other, net” in the Consolidated Statements of Operations.

 

Fair value is the price that would be received for an asset or the amount paid to transfer a liability in an orderly transaction between market participants. Veeco classifies certain assets based on the following fair value hierarchy:

 

Level 1: Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;

 

Level 2: Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly; and

 

Level 3: Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

 

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Veeco has evaluated the estimated fair value of financial instruments using available market information and valuations as provided by third-party sources. The use of different market assumptions or estimation methodologies could have a significant effect on the estimated fair value amounts.

 

The following table presents the portion of Veeco’s assets that were measured at fair value on a recurring basis at March 31, 2019 and December 31, 2018:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Level 1

    

Level 2

    

Level 3

    

Total

 

 

(in thousands)

March 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Certificate of deposits and time deposits

 

$

66,863

 

$

 —

 

$

 —

 

$

66,863

U.S. treasuries

 

 

19,917

 

 

 —

 

 

 —

 

 

19,917

Commercial paper

 

 

 —

 

 

11,257

 

 

 —

 

 

11,257

Total

 

$

86,780

 

$

11,257

 

$

 —

 

$

98,037

Short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasuries

 

$

51,726

 

$

 —

 

$

 —

 

$

51,726

Government agency securities

 

 

 —

 

 

4,964

 

 

 —

 

 

4,964

Corporate debt

 

 

 —

 

 

1,999

 

 

 —

 

 

1,999

Commercial paper

 

 

 —

 

 

8,526

 

 

 —

 

 

8,526

Total

 

$

51,726

 

$

15,489

 

$

 —

 

$

67,215

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Certificate of deposits and time deposits

 

$

65,571

 

$

 —

 

$

 —

 

$

65,571

U.S. treasuries

 

 

3,990

 

 

 —

 

 

 —

 

 

3,990

Total

 

$

69,561

 

$

 —

 

$

 —

 

$

69,561

Short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasuries

 

$

37,184

 

$

 —

 

$

 —

 

$

37,184

Corporate debt

 

 

 —

 

 

8,516

 

 

 —

 

 

8,516

Commercial paper

 

 

 —

 

 

2,489

 

 

 —

 

 

2,489

Total

 

$

37,184

 

$

11,005

 

$

 —

 

$

48,189

 

There were no transfers between fair value measurement levels during the three months ended March 31, 2019.

 

At March 31, 2019 and December 31, 2018, the amortized cost and fair value of available-for-sale securities consist of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Gross

    

Gross

    

 

 

 

Amortized

 

Unrealized

 

Unrealized

 

Estimated

 

 

Cost

 

Gains

 

Losses

 

Fair Value

 

 

(in thousands)

March 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasuries

 

$

51,715

 

$

11

 

$

 —

 

$

51,726

Government agency securities

 

 

4,964

 

 

 —

 

 

 —

 

 

4,964

Corporate debt

 

 

1,999

 

 

 —

 

 

 —

 

 

1,999

Commercial paper

 

 

8,526

 

 

 —

 

 

 —

 

 

8,526

Total

 

$

67,204

 

$

11

 

$

 —

 

$

67,215

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasuries

 

$

37,191

 

$

 —

 

$

(7)

 

$

37,184

Corporate debt

 

 

8,525

 

 

 —

 

 

(9)

 

 

8,516

Commercial paper

 

 

2,489

 

 

 —

 

 

 —

 

 

2,489

Total

 

$

48,205

 

$

 —

 

$

(16)

 

$

48,189

 

There were no available-for-sale securities in a loss position at March 31, 2019. Available-for-sale securities in a loss position at December 31, 2018 consist of:

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

    

 

    

Gross

 

 

Estimated

 

Unrealized

 

 

Fair Value

 

Losses

 

 

(in thousands)

U.S. treasuries

 

$

37,184

 

$

(7)

Corporate debt

 

 

8,516

 

 

(9)

Total

 

$

45,700

 

$

(16)

 

At March 31, 2019 and December 31, 2018, there were no short-term investments that had been in a continuous loss position for more than 12 months.

 

The maturities of securities classified as available-for-sale at March 31, 2019 were all due in one year or less. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. There were no realized gains or losses for the three months ended March 31, 2019 and 2018.

 

Accounts Receivable

 

Accounts receivable is presented net of an allowance for doubtful accounts of $0.2 million and $0.3 million at March 31, 2019 and December 31, 2018, respectively.

 

Inventories

 

Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. Inventories at March 31, 2019 and December 31, 2018 consist of the following:

 

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

    

2019

    

2018

 

 

(in thousands)

Materials

 

$

84,711

 

$

90,816

Work-in-process

 

 

36,299

 

 

42,354

Finished goods

 

 

27,093

 

 

23,141

Total

 

$

148,103

 

$

156,311

 

Prepaid Expenses and Other Current Assets

 

Prepaid expenses and other current assets primarily consist of supplier deposits, prepaid value-added tax, lease deposits, prepaid insurance, and prepaid licenses. Veeco had deposits with its suppliers of $15.1 million and $12.8 million at March 31, 2019 and December 31, 2018, respectively.

 

Property, Plant, and Equipment

 

Property, plant, and equipment at March 31, 2019 and December 31, 2018 consist of the following:

 

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

    

2019

    

2018

 

 

(in thousands)

Land

 

$

5,669

 

$

5,669

Building and improvements

 

 

61,286

 

 

61,124

Machinery and equipment (1)

 

 

129,864

 

 

128,385

Leasehold improvements

 

 

7,041

 

 

9,033

Gross property, plant, and equipment

 

 

203,860

 

 

204,211

Less: accumulated depreciation and amortization

 

 

126,123

 

 

123,927

Net property, plant, and equipment

 

$

77,737

 

$

80,284

(1)

Machinery and equipment also includes software, furniture and fixtures

 

For the three months ended March 31, 2019 and 2018, depreciation expense was $4.6 million and $4.2 million, respectively.

 

Goodwill

 

Goodwill represents the future economic benefits arising from assets acquired in a business combination that are not individually identified and separately recognized. There were no changes to goodwill during the three months ended March 31, 2019.

 

Intangible Assets

 

Intangible assets consist of purchased technology, customer relationships, patents, trademarks and tradenames, and backlog, and are initially recorded at fair value. Long-lived intangible assets are amortized over their estimated useful lives in a method reflecting the pattern in which the economic benefits are consumed or amortized on a straight-line basis if such pattern cannot be reliably determined.

 

The components of purchased intangible assets were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2019

 

December 31, 2018

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

Accumulated

 

 

 

 

    

Gross

    

Amortization

    

 

    

Gross

    

Amortization

    

 

 

 

Carrying

 

and

 

Net

 

Carrying

 

and

 

Net

 

 

Amount

 

Impairment

 

Amount

 

Amount

 

Impairment

 

Amount

 

 

(in thousands)

Technology

 

$

337,218

 

$

293,528

 

$

43,690

 

$

337,218

 

$

290,808

 

$

46,410

Customer relationships

 

 

164,595

 

 

137,257

 

 

27,338

 

 

164,595

 

 

136,126

 

 

28,469

In-process R&D

 

 

13,710

 

 

10,530

 

 

3,180

 

 

13,710

 

 

10,530

 

 

3,180

Trademarks and tradenames

 

 

30,910

 

 

24,239

 

 

6,671

 

 

30,910

 

 

23,899

 

 

7,011

Other

 

 

3,686

 

 

3,634

 

 

52

 

 

3,686

 

 

3,607

 

 

79

Total

 

$

550,119

 

$

469,188

 

$

80,931

 

$

550,119

 

$

464,970

 

$

85,149

 

Other intangible assets primarily consist of patents, licenses, and backlog.

 

 

 

 

 

Other Assets

 

The Company has a non-marketable investment in Kateeva, Inc. (“Kateeva”), with a carrying value of $21.0 million at March 31, 2019 and December 31, 2018. Additionally, the Company has a non-marketable investment in a separate entity, with a carrying value of $3.5 million at March 31, 2019 and December 31, 2018. The Company does not exert significant influence over these investments, and its ownership interest is less than 20%. Neither equity investment has a readily observable market price, and therefore the Company has elected to measure these investments at cost, adjusted for changes in observable market prices minus impairment. The investments are included in “Other assets” on the Consolidated Balance Sheets. There were no changes in observable market prices for either investment for the three months ended March 31, 2019. These investments are subject to periodic impairment reviews; as there are no open-market valuations, the impairment analyses require judgment. The analyses include assessments of the companies’ financial condition, the business outlooks for their products and technologies, their projected results and cash flow, business valuation indications from recent rounds of financing, the likelihood of obtaining subsequent rounds of financing, and the impact of equity preferences held by Veeco relative to other investors.

v3.19.1
Liabilities
 3 Months Ended
Mar. 31, 2019
Liabilities  
Liabilities

Note 4 — Liabilities

 

Accrued Expenses and Other Current Liabilities

 

The components of accrued expenses and other current liabilities at March 31, 2019 and December 31, 2018 consist of:

 

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

    

2019

    

2018

 

 

(in thousands)

Payroll and related benefits

 

$

17,722

 

$

20,486

Warranty

 

 

7,226

 

 

7,852

Operating lease liabilities

 

 

4,797

 

 

 —

Interest

 

 

1,992

 

 

4,321

Professional fees

 

 

3,059

 

 

2,897

Sales, use, and other taxes

 

 

1,256

 

 

2,670

Restructuring liability

 

 

1,720

 

 

2,213

Other

 

 

6,268

 

 

6,011

Total

 

$

44,040

 

$

46,450

 

Warranty

 

Warranties are typically valid for one year from the date of system final acceptance, and Veeco estimates the costs that may be incurred under the warranty. Estimated warranty costs are determined by analyzing specific product and historical configuration statistics and regional warranty support costs and are affected by product failure rates, material usage, and labor costs incurred in correcting product failures during the warranty period. Unforeseen component failures or exceptional component performance can also result in changes to warranty costs. Changes in product warranty reserves for the three months ended March 31, 2019 include:

 

 

 

 

 

 

    

(in thousands)

Balance - December 31, 2018

 

$

7,852

Warranties issued

 

 

1,427

Consumption of reserves

 

 

(1,978)

Changes in estimate

 

 

(75)

Balance - March 31, 2019

 

$

7,226

 

Restructuring Accruals

 

During the second quarter of 2018, the Company initiated plans to further reduce excess capacity associated with the manufacture and support of the Company's advanced packaging lithography and 3D wafer inspection systems by consolidating these operations into its San Jose, California facility. As a result of this and other cost saving initiatives, the Company announced headcount reductions of approximately 40 employees. During the three months ended March 31, 2019, additional accruals were recognized and payments were made related to these restructuring initiatives.

 

The Company continued to record restructuring charges in the first quarter of 2019 in an effort to streamline operations, enhance efficiencies, and reduce costs.

 

 

 

 

 

 

 

 

 

 

 

    

Personnel

    

Facility

    

 

 

 

 

Severance and

 

Related Costs

 

 

 

 

 

Related Costs

 

and Other

 

Total

 

 

(in thousands)

Balance - December 31, 2018

 

$

2,143

 

$

70

 

$

2,213

Provision

 

 

1,320

 

 

110

 

 

1,430

Payments

 

 

(1,743)

 

 

(180)

 

 

(1,923)

Balance - March 31, 2019

 

$

1,720

 

$

 —

 

$

1,720

 

Customer Deposits and Deferred Revenue

 

Customer deposits totaled $26.6 million and $28.3 million at March 31, 2019 and December 31, 2018, respectively. Deferred revenue represents amounts billed, other than deposits, in excess of the revenue that can be recognized on a particular contract at the balance sheet date. Changes in deferred revenue were as follows:

 

 

 

 

 

 

 

(in thousands)

Balance - December 31, 2018

 

$

44,415

Deferral of revenue

 

 

792

Recognition of previously deferred revenue

 

 

(2,887)

Balance - March 31, 2019

 

$

42,320

 

As of March 31, 2019, the Company has approximately $68.5 million of remaining performance obligations on contracts with an original estimated duration of one year or more, of which approximately 65% is expected to be recognized within one year, with the remaining amounts expected to be recognized between one to three years. The Company has elected to exclude disclosures regarding remaining performance obligations that have an original expected duration of one year or less.

 

Convertible Senior Notes

 

On January 10, 2017, the Company issued $345.0 million of 2.70% convertible senior unsecured notes (the “Convertible Senior Notes”). The Company received net proceeds, after deducting underwriting discounts and fees and expenses payable by the Company, of approximately $335.8 million. The Convertible Senior Notes bear interest at a rate of 2.70% per year, payable semiannually in arrears on January 15 and July 15 of each year, commencing on July 15, 2017. The Convertible Senior Notes mature on January 15, 2023 (the “Maturity Date”), unless earlier purchased by the Company, redeemed, or converted.

 

The carrying value of the Convertible Senior Notes is as follows:

 

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

    

2019

    

2018

 

 

(in thousands)

Principal amount

 

$

345,000

 

$

345,000

Unamortized debt discount

 

 

(49,537)

 

 

(52,336)

Unamortized transaction costs

 

 

(4,990)

 

 

(5,272)

Net carrying value

 

$

290,473

 

$

287,392

 

Total interest expense related to the Convertible Senior Notes is as follows:

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31,

 

 

    

2019

    

2018

 

 

 

(in thousands)

 

Cash Interest Expense

 

 

  

 

 

  

 

Coupon interest expense

 

$

2,329

 

$

2,329

 

Non-Cash Interest Expense

 

 

  

 

 

  

 

Amortization of debt discount

 

 

2,799

 

 

2,598

 

Amortization of transaction costs

 

 

282

 

 

261

 

Total Interest Expense

 

$

5,410

 

$

5,188

 

 

The Company determined the Convertible Senior Notes is a Level 2 liability in the fair value hierarchy and estimated its fair value as $295.0 million at March 31, 2019.

 

Other Liabilities

 

As part of the acquisition of Ultratech, the Company assumed an executive non-qualified deferred compensation plan that allowed qualifying executives to defer cash compensation. The plan was frozen at the time of acquisition and no further contributions have been made. At March 31, 2019 and December 31, 2018, plan assets approximated $3.4 million and $3.2 million, respectively, representing the cash surrender value of life insurance policies and is included within “Other assets” in the Consolidated Balance Sheets, while plan liabilities approximated $2.9 million and $3.5 million, respectively, and is included within “Other liabilities” in the Consolidated Balance Sheets. Other liabilities at both March 31, 2019 and December 31, 2018 also includes asset retirement obligations of $3.2 million, medical and dental benefits of $2.2 million, and income tax payables of $1.0 million.

v3.19.1
Commitments and Contingencies
 3 Months Ended
Mar. 31, 2019
Commitments and Contingencies  
Commitments and Contingencies

Note 5 — Commitments and Contingencies

 

Leases

 

The Company’s operating leases primarily include real estate leases for properties used for manufacturing, R&D activities, sales and service, and administration, as well as certain equipment leases. Some leases may include options to renew for a period of up to 5 years, while others may include options to terminate the lease. The weighted average remaining lease term of the Company’s operating leases as of March 31, 2019 was 3 years, and the weighted average discount rate used in determining the present value of future lease payments was 6.0%.

 

Minimum lease commitments at March 31, 2019 for property and equipment under operating lease agreements are payable as follows:

 

 

 

 

 

 

 

Operating

 

    

Leases

 

 

(in thousands)

Payments due by period:

 

 

 

2019 (excluding three months ended March 31, 2019)

 

$

4,144

2020

 

 

5,233

2021

 

 

2,431

2022

 

 

1,334

2023

 

 

853

Thereafter

 

 

548

Total future minimum lease payments

 

 

14,543

Less: Imputed interest

 

 

(1,364)

Total

 

 

13,179

 

 

 

 

Reported as of March 31, 2019

 

 

 

Other current liabilities

 

 

4,797

Operating lease liabilities

 

 

8,382

Total

 

$

13,179

 

Minimum lease commitments at December 31, 2018 for property and equipment under operating lease agreements were payable as follows:

 

 

 

 

 

 

 

Operating

 

    

Leases

 

 

(in thousands)

Payments due by period:

 

 

2019

 

$

5,143

2020

 

 

5,056

2021

 

 

2,432

2022

 

 

1,812

2023

 

 

1,066

Thereafter

 

 

548

Total

 

$

16,057

 

Operating lease cost and variable lease cost for the three months ended March 31, 2019 were $1.4 million and $0.6 million, respectively. Additionally, the Company has an immaterial amount of short term leases. Lease expense for the three months ended March 31, 2018 was $1.7 million. Operating cash flows from operating leases for the three months ended March 31, 2019 was $1.5 million.

 

Purchase Commitments

 

Veeco has purchase commitments of $90.5 million at March 31, 2019, substantially all of which become due within one year.

 

Bank Guarantees

 

Veeco has bank guarantees and letters of credit issued by a financial institution on its behalf as needed. At March 31, 2019, outstanding bank guarantees and letters of credit totaled $8.5 million, and unused bank guarantees and letters of credit of $66.1 million were available to be drawn upon.

 

Legal Proceedings

 

On June 8, 2018, an Ultratech shareholder who received Veeco stock as part of the consideration for the Ultratech acquisition filed a purported class action complaint in the Superior Court of the State of California, County of Santa Clara, captioned Wolther v. Maheshwari et al., Case No. 18CV329690, on behalf of himself and others who purchased or acquired shares of Veeco pursuant to the registration statement and prospectus which Veeco filed with the SEC in connection with the Ultratech acquisition (the “Wolther Action”). On August 2 and August 8, 2018, two purported class action complaints substantially similar to the Wolther Action were filed on behalf of different plaintiffs in the same court as the Wolther Action. These cases have been consolidated with the Wolther Action, and a consolidated complaint was filed on December 11, 2018. The consolidated complaint seeks to recover damages and fees under Sections 11, 12, and 15 of the Securities Act of 1933 for, among other things, alleged false/misleading statements in the registration statement and prospectus relating to the Ultratech acquisition, relating primarily to the alleged failure to disclose delays in the advanced packaging business, increased MOCVD competition in China, and an intellectual property dispute. Veeco is defending this matter vigorously.

 

On December 21, 2018, a purported Veeco stockholder filed a derivative action in the Superior Court of the State of California, County of Santa Clara, captioned Vladimir Gusinsky Revocable Trust v. Peeler, et al., Case No. 18CV339925, on behalf of nominal defendant Veeco. The complaint seeks to assert claims for breach of fiduciary duty, waste of corporate assets, and unjust enrichment against current and former Veeco directors premised on purported misstatements and omissions in the registration statement relating to the Ultratech acquisition. The court ordered this action stayed until a future case management conference. Veeco is defending this matter vigorously.

 

The Company is involved in various other legal proceedings arising in the normal course of business. The Company does not believe that the ultimate resolution of these matters will have a material adverse effect on its consolidated financial position, results of operations, or cash flows.

v3.19.1
Derivative Financial Instruments
 3 Months Ended
Mar. 31, 2019
Derivative Financial Instruments  
Derivative Financial Instruments

Note 6 — Derivative Financial Instruments

 

The Company is exposed to financial market risks arising from changes in currency exchange rates. Changes in currency exchange rates could affect the Company’s foreign currency denominated monetary assets and liabilities and forecasted cash flows. The Company enters into monthly forward derivative contracts with the intent of mitigating a portion of this risk. The Company only uses derivative financial instruments in the context of hedging and not for speculative purposes and had not designated its foreign exchange derivatives as hedges. Accordingly, changes in fair value from these contracts are recorded as “Other, net” in the Company’s Consolidated Statements of Operations. The Company executes derivative transactions with highly rated financial institutions to mitigate counterparty risk.

 

The Company did not have any outstanding derivative contracts at March 31, 2019 or December 31, 2018. Additionally, the Company did not have any gains or losses from currency exchange derivatives during the three months ended March 31, 2019. The following table shows the gains and (losses) from currency exchange derivatives during the three months ended March 31, 2018, which are included in “Other, net” in the Consolidated Statements of Operations, as well as the weighted average notional amount of derivatives outstanding for the period:

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31, 2018

 

 

    

 

Gains
(Losses)

    

Weighted average
notional amount

 

 

 

 

(in thousands)

 

Foreign currency exchange forwards

 

$

 

17

 

$

930

 

 

v3.19.1
Equity
 3 Months Ended
Mar. 31, 2019
Equity  
Equity

Note 7 — Equity

 

Statement of Stockholders’ Equity

 

The following tables present the changes in Stockholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

 

    

 

 

 

 

 

    

 

 

    

 

 

    

Accumulated

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

Other

 

 

 

 

 

Common Stock

 

Treasury Stock

 

Paid-in

 

Accumulated

 

Comprehensive

 

 

 

 

 

Shares

 

Amount

 

Shares

    

Amount

 

Capital

 

Deficit

 

Income

 

Total

 

 

(in thousands)

Balance at December 31, 2018

 

48,547

 

$

485

 

 

523

 

$

(5,872)

 

$

1,061,325

 

$

(619,983)

 

$

1,820

 

$

437,775

Net loss

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(18,530)

 

 

 —

 

 

(18,530)

Other comprehensive income, net of tax

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

38

 

 

38

Share-based compensation expense

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

3,157

 

 

 —

 

 

 —

 

 

3,157

Net issuance under employee stock plans

 

128

 

 

 2

 

 

(523)

 

 

5,872

 

 

(6,303)

 

 

(213)

 

 

 —

 

 

(642)

Balance at March 31, 2019

 

48,675

 

$

487

 

 

 —

 

$

 —

 

$

1,058,179

 

$

(638,726)

 

$

1,858

 

$

421,798

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

 

    

 

 

 

 

 

    

 

 

    

 

 

    

Accumulated

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

Other

 

 

 

 

 

Common Stock

 

Treasury Stock

 

Paid-in

 

Accumulated

 

Comprehensive

 

 

 

 

 

Shares

 

Amount

 

Shares

    

Amount

 

Capital

 

Deficit

 

Income

 

Total

 

 

(in thousands)

Balance at December 31, 2017

 

48,229

 

$

482

 

 

85

 

$

(1,284)

 

$

1,051,953

 

$

(212,870)

 

$

1,812

 

$

840,093

Net loss

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(15,827)

 

 

 —

 

 

(15,827)

Other comprehensive income, net of tax

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

24

 

 

24

Share-based compensation expense

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

4,537

 

 

 —

 

 

 —

 

 

4,537

Net issuance under employee stock plans

 

462

 

 

 5

 

 

(115)

 

 

1,728

 

 

(2,159)

 

 

 —

 

 

 —

 

 

(426)

Purchases of common stock

 

 —

 

 

 —

 

 

30

 

 

(444)

 

 

 —

 

 

 —

 

 

 —

 

 

(444)

Balance at March 31, 2018

 

48,691

 

$

487

 

 

 —

 

$

 —

 

$

1,054,331

 

$

(228,697)

 

$

1,836

 

$

827,957

 

Accumulated Other Comprehensive Income (“AOCI”)

 

The following table presents the changes in the balances of each component of AOCI, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized

 

 

 

 

 

 

 

Gains (Losses)

 

 

 

 

 

Foreign

 

on Available

 

 

 

 

 

Currency

 

for Sale 

 

 

 

 

    

Translation

    

Securities

    

Total

 

 

(in thousands)

Balance - December 31, 2018

 

$

1,836

 

$

(16)

 

$

1,820

Other comprehensive income (loss)

 

 

11

 

 

27

 

 

38

Balance - March 31, 2019

 

$

1,847

 

$

11

 

$

1,858

 

There were minimal reclassifications from AOCI into net income for the three months ended March 31, 2019 and 2018.

v3.19.1
Share-based compensation
 3 Months Ended
Mar. 31, 2019
Stock Plans  
Stock Plans

Note 8 — Share-based compensation

 

Restricted share awards are issued to employees that are subject to specified restrictions and a risk of forfeiture. The restrictions typically lapse over one to five years and may entitle holders to dividends and voting rights. Other types of share-based compensation include performance share awards, performance share units, and restricted share units (collectively with restricted share awards, “restricted shares”), as well as options to purchase common stock.

 

Share-based compensation expense was recognized in the following line items in the Consolidated Statements of Operations for the three months ended March 31, 2019 and 2018:

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31,

 

 

    

2019

    

2018

    

 

 

(in thousands)

 

Cost of sales

 

$

470

 

$

554

 

Research and development

 

 

792

 

 

954

 

Selling, general, and administrative

 

 

1,895

 

 

2,857

 

Restructuring

 

 

 —

 

 

172

 

Total

 

$

3,157

 

$

4,537

 

 

For the three months ended March 31, 2019, equity activity related to stock options was as follows:

 

 

 

 

 

 

 

 

 

 

 

Weighted 

 

 

Number of

 

Average

 

    

Shares

    

Exercise Price

 

 

(in thousands)

 

 

 

Balance -  December 31, 2018

 

1,222

 

 

34.80

Expired or forfeited

 

(33)

 

 

33.82

Balance -  March 31, 2019

 

1,189

 

 

34.83

 

For the three months ended March 31, 2019, equity activity related to non-vested restricted shares and performance shares was as follows:

 

 

 

 

 

 

 

 

    

 

    

Weighted

 

 

 

 

Average

 

 

Number of

 

Grant Date

 

 

Shares

 

Fair Value

 

 

(in thousands)

 

 

 

Balance -  December 31, 2018

 

2,218

 

 

20.74

Granted

 

974

 

 

11.32

Performance award adjustments

 

(9)

 

 

32.67

Vested

 

(156)

 

 

21.71

Forfeited

 

(89)

 

 

21.84

Balance -  March 31, 2019

 

2,938

 

 

17.50

 

v3.19.1
Income Taxes
 3 Months Ended
Mar. 31, 2019
Income Taxes  
Income Taxes

Note 9 — Income Taxes

 

Income taxes are estimated for each of the jurisdictions in which the Company operates. Deferred income taxes reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as the tax effect of carryforwards. Realization of net deferred tax assets is dependent on future taxable income. At March 31, 2019, the Company’s U.S. deferred tax assets are fully offset by a valuation allowance since the Company cannot conclude that it is more likely than not that these future benefits will be realized.

 

At the end of each interim reporting period, the effective tax rate is aligned with expectations for the full year. This estimate is used to determine the income tax provision on a year-to-date basis and may change in subsequent interim periods. If necessary, the year-to-date tax benefit for interim period losses is limited to the amount that could be recognizable at the end of the fiscal year.

 

Loss before income taxes and income tax expense (benefit) for the three months ended March 31, 2019 and 2018 were as follows:

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31,

 

 

    

2019

    

2018

 

 

 

(in thousands)

 

Loss before income taxes

 

$

(18,340)

 

$

(16,057)

 

Income tax expense (benefit)

 

$

190

 

$

(230)

 

 

The Company’s tax expense for the three months ended March 31, 2019 was $0.2 million, compared to a tax benefit of $0.2 million for the comparable prior period. The 2019 tax expense included an expense of $0.1 million related to the Company’s domestic operations, and $0.1 million related to the Company’s non-U.S. operations, compared to 2018 when the benefit included an expense of $0.1 million related to the Company’s domestic operations, and a $0.3 million tax benefit related to the Company’s non-U.S. operations. Although there was a domestic pre-tax loss for the three months ended March 31, 2019 and 2018, the Company did not provide a current tax benefit on domestic pre-tax losses, as the amounts are not realizable on a more-likely-than-not basis. The domestic tax expense for the three months ended March 31, 2019 and 2018 is primarily attributable to the tax amortization of indefinite-lived intangible assets that is not available to offset U.S. deferred tax assets. The non-US tax expense for the three months ended March 31, 2019 is primarily attributable to tax expense on non-U.S operation profits and foreign withholding taxes on unremitted earnings as of March 31, 2019, offset by the amortization of intangible assets. The non-U.S. tax benefit for the three months ended March 31, 2018 is primarily attributable to the amortization of intangible assets, offset by tax expense on non-U.S operation profits incurred during the period, as well as foreign withholding taxes on unremitted earnings as of March 31, 2018.

v3.19.1
Segment Reporting and Geographic Information
 3 Months Ended
Mar. 31, 2019
Segment Reporting and Geographic Information  
Segment Reporting and Geographic Information

Note 10 — Segment Reporting and Geographic Information

 

Veeco operates and measures its results in one operating segment and therefore has one reportable segment: the design, development, manufacture, and support of thin film process equipment primarily sold to make electronic devices.

 

Veeco categorizes its sales into the following four end-markets:

 

Advanced Packaging, MEMS & RF Filters

 

Advanced Packaging includes a portfolio of wafer-level assembly technologies that enable the miniaturization and performance improvement of electronic products, such as smartphones, smartwatches, tablets, and laptops. Micro-Electro Mechanical Systems (“MEMS”) includes tiny mechanical devices such as sensors, switches, mirrors, and actuators embedded in semiconductor chips used in vehicles, smartphones, tablets, and games. RF Filters refers to RF filters used in smartphones, tablets, and mobile devices.

 

LED Lighting, Display & Compound Semiconductor

 

LED Lighting refers to Light Emitting Diode (“LED”) and semiconductor illumination sources used in various applications including, but not limited to, displays such as backlights, general lighting, automotive running lights, and headlamps. Display refers to LEDs used for displays and Organic Light Emitting Diode (“OLED”) displays found in outdoor display/signage applications, TVs, smartphones, wearable devices, and tablets. Compound Semiconductor includes Photonics, Power Electronics, and Radio Frequency (“RF”) Devices. Photonics refers to laser diodes, Vertical Cavity Surface Emitting Lasers (“VCSEL”) in 3D sensing and communications, and various other optical devices. Power Electronics refers to semiconductor devices such as rectifiers, inverters, and converters for the control and conversion of electric power. RF devices refers to radio frequency emitting and receiving devices that enable wireless communications. Such devices include power amplifiers, switches, and transceivers for applications such as mobile (including handsets and base stations), defense, automobile, and the Internet of Things.

 

Front-End Semiconductor

 

Front-End Semiconductor refers to the early steps in the process of integrated circuit fabrication where the microchips are created but still remain on the silicon wafer. This category includes Laser Spike Anneal, Ion Beam etch for front-end semiconductor applications, and Ion Beam deposition for EUV mask blanks.

 

Scientific & Industrial

 

Scientific refers to advanced materials research at university research institutions, industry research institutions, industry consortiums, and government research agencies. Industrial refers to large-scale product manufacturing applications including data storage and optical coatings: thin layers of material deposited on a lens or mirror that alters how light reflects and transmits.

 

Sales by end-market and geographic region for the three months ended March 31, 2019 and 2018 were as follows:

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31,

 

 

    

2019

 

2018

    

 

 

(in thousands)

 

Sales by end-market

 

 

 

 

 

 

 

Advanced Packaging, MEMS & RF Filters

 

$

23,127

 

$

27,153

 

LED Lighting, Display & Compound Semiconductor

 

 

13,550

 

 

89,916

 

Front-End Semiconductor

 

 

22,617

 

 

9,457

 

Scientific & Industrial

 

 

40,077

 

 

32,048

 

Total

 

$

99,371

 

$

158,574

 

Sales by geographic region

 

 

 

 

 

 

 

United States

 

$

32,315

 

$

23,754

 

China

 

 

10,159

 

 

75,395

 

EMEA(1)

 

 

17,827

 

 

15,745

 

Rest of World

 

 

39,070

 

 

43,680

 

   Total

 

$

99,371

 

$

158,574

 

(1)

EMEA consists of Europe, the Middle East, and Africa

 

For geographic reporting, sales are attributed to the location in which the customer facility is located.

v3.19.1
Basis of Presentation (Policies)
 3 Months Ended
Mar. 31, 2019
Basis of Presentation  
Basis of Presentation

The accompanying unaudited Consolidated Financial Statements of Veeco have been prepared in accordance with U.S. GAAP as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 270 for interim financial information and with the instructions to Rule 10-01 of Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements as the interim information is an update of the information that was presented in Veeco’s most recent annual financial statements. For further information, refer to Veeco’s Consolidated Financial Statements and Notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2018 (“2018 Form 10-K”). In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal, recurring nature.

Fiscal Period

Veeco reports interim quarters on a 13-week basis ending on the last Sunday of each quarter. The fourth quarter always ends on the last day of the calendar year, December 31. The 2019 interim quarters end on March 31, June 30, and September 29, and the 2018 interim quarters ended on April 1, July 1, and September 30. These interim quarters are reported as March 31, June 30, and September 30 in Veeco’s interim consolidated financial statements.

Revenue recognition

Revenue Recognition

 

Revenue is recognized upon the transfer of control of the promised product or service to the customer in an amount that reflects the consideration the Company expects to receive in exchange for such product or service. The Company’s contracts with customers generally do not contain variable consideration. In the rare instances where variable consideration is included, the Company estimates the amount of variable consideration and determines what portion of that, if any, has a high probability of significant subsequent revenue reversal, and if so, that amount is excluded from the transaction price. The Company’s contracts with customers frequently contain multiple deliverables, such as systems, upgrades, components, spare parts, installation, maintenance, and service plans. Judgment is required to properly identify the performance obligations within a contract and to determine how the revenue should be allocated among the performance obligations. The Company also evaluates whether multiple transactions with the same customer or related parties should be considered part of a single contract based on an assessment of whether the contracts or agreements are negotiated or executed within a short time frame of each other or if there are indicators that the contracts are negotiated in contemplation of one another.

   

When there are separate units of accounting, the Company allocates revenue to each performance obligation on a relative stand-alone selling price basis. The stand-alone selling prices are determined based on the prices at which the Company separately sells the systems, upgrades, components, spare parts, installation, maintenance, and service plans. For items that are not sold separately, the Company estimates stand-alone selling prices generally using an expected cost plus margin approach.

   

Most of the Company’s revenue is recognized at a point in time when the performance obligation is satisfied. The Company considers many facts when evaluating each of its sales arrangements to determine the timing of revenue recognition, including its contractual obligations and the nature of the customer’s post-delivery acceptance provisions. The Company’s system sales arrangements, including certain upgrades, generally include field acceptance provisions that may include functional or mechanical test procedures. For many of these arrangements, a customer source inspection of the system is performed in the Company’s facility, test data is sent to the customer documenting that the system is functioning to the agreed upon specifications prior to delivery, or other quality assurance testing is performed internally to ensure system functionality prior to shipment. Historically, such source inspection or test data replicates the field acceptance provisions that are performed at the customer’s site prior to final acceptance of the system. When the Company objectively demonstrates that the criteria specified in the contractual acceptance provisions are achieved prior to delivery either through customer testing or the Company’s historical experience of its tools meeting specifications, transfer of control of the product to the customer is considered to have occurred and revenue is recognized upon system delivery since there is no substantive contingency remaining related to the acceptance provisions at that date. For new products, new applications of existing products, or for products with substantive customer acceptance provisions where the Company cannot objectively demonstrate that the criteria specified in the contractual acceptance provisions have been achieved prior to delivery, revenue and the associated costs are deferred. The Company recognizes such revenue and costs upon obtaining objective evidence that the acceptance provisions can be achieved, assuming all other revenue recognition criteria have been met.

   

In certain cases the Company’s contracts with customers contain a billing retention, typically 10% of the sales price, which is billed by the Company and payable by the customer when field acceptance provisions are completed. Revenue recognized in advance of the amount that has been billed is recorded as a contract asset on the Consolidated Balance Sheets.

   

The Company recognizes revenue related to maintenance and service contracts over time based upon the respective contract term. Installation revenue is recognized over time as the installation services are performed. The Company recognizes revenue from the sales of components, spare parts, and specified service engagements at a point in time, which is typically consistent with the time of delivery in accordance with the terms of the applicable sales arrangement.

   

The Company may receive customer deposits on system transactions. The timing of the transfer of goods or services related to the deposits is either at the discretion of the customer or expected to be within one year from the deposit receipt. As such, the Company does not adjust transaction prices for the time value of money. Incremental direct costs incurred related to the acquisition of a customer contract, such as sales commissions, are expensed as incurred since the expected amortization period is one year or less.

 

The Company has elected to treat shipping and handling costs as a fulfillment activity, and the Company includes such costs in cost of services when the Company recognizes revenue for the related goods. Taxes assessed by governmental authorities that are collected by the Company from a customer are excluded from revenue.

Leases

Leases

 

At contract inception, the Company determines if an arrangement is a lease, or contains a lease, of an identified asset for which the Company has the right to obtain substantially all of the economic benefits from its use and the right to direct its use. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term, while lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term. The implicit discount rate in the Company’s leases generally cannot readily be determined, and therefore the Company uses its incremental borrowing rate based on information available at lease commencement date in determining the present value of future payments. The Company has options to renew or terminate certain leases. These options are included in the determination of lease term when it is reasonably certain that the Company will exercise such options. The Company does not separate lease and non-lease components in determining ROU assets or lease liabilities for real estate leases. Additionally, the Company does not recognize ROU assets or lease liabilities for leases with original terms or renewals of one year or less.

Recently Adopted Accounting Standards and Recent Accounting Pronouncements Not Yet Adopted

Recently Adopted Accounting Standards

 

In February 2016, the FASB issued ASU 2016-02: Leases, which, along with subsequent ASUs related to this topic, has been codified as Accounting Standards Codification 842 (“ASC 842”). ASC 842 generally requires operating lessee rights and obligations to be recognized as assets and liabilities on the balance sheet. The new standard, which the Company adopted effective January 1, 2019, offers a transition option whereby companies can recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than in the earliest period presented. The Company has adopted using this transition method, and therefore prior period balances have not been adjusted. In addition, ASC 842 provides for a number of optional exemptions in transition. The Company has elected certain exemptions whereby prior conclusions regarding lease identification, lease classification, and initial direct costs were not reassessed under the new standard. The adoption of the standard impacted the Company’s Consolidated Balance Sheets through the recognition of ROU assets and lease liabilities of approximately $14.2 million each as of January 1, 2019, but did not have an impact on the Consolidated Statements of Operations, Statements of Comprehensive Income, or Statements of Cash Flows.

v3.19.1
Income (Loss) Per Common Share (Tables)
 3 Months Ended
Mar. 31, 2019
Income (Loss) Per Share  
Schedule of basic and diluted income (loss) per share and weighted average shares

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31,

 

 

 

    

2019

    

2018

    

    

 

 

(in thousands, except per share amounts)

 

 

Net income (loss)

 

$

(18,530)

 

$

(15,827)

 

 

Net income (loss) per common share:

 

 

 

 

 

 

 

 

Basic

 

$

(0.40)

 

$

(0.34)

 

 

Diluted

 

$

(0.40)

 

$

(0.34)

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average shares outstanding

 

 

46,848

 

 

46,963

 

 

Effect of potentially dilutive share-based awards

 

 

 —

 

 

 —

 

 

Diluted weighted average shares outstanding

 

 

46,848

 

 

46,963

 

 

 

 

 

 

 

 

 

 

 

Common share equivalents excluded from the diluted weighted average shares outstanding since Veeco incurred a net loss and their effect would be antidilutive

 

 

320

 

 

169

 

 

Potentially dilutive shares excluded from the diluted calculation as their effect would be antidilutive

 

 

2,426

 

 

2,092

 

 

Maximum potential shares to be issued for settlement of the Convertible Senior Notes excluded from the diluted calculation as their effect would be antidilutive

 

 

8,618

 

 

8,618

 

 

 

v3.19.1
Assets (Tables)
 3 Months Ended
Mar. 31, 2019
Assets  
Schedule of portion of Veeco's assets (excluding cash balances) that are measured at fair value on a recurring basis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Level 1

    

Level 2

    

Level 3

    

Total

 

 

(in thousands)

March 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Certificate of deposits and time deposits

 

$

66,863

 

$

 —

 

$

 —

 

$

66,863

U.S. treasuries

 

 

19,917

 

 

 —

 

 

 —

 

 

19,917

Commercial paper

 

 

 —

 

 

11,257

 

 

 —

 

 

11,257

Total

 

$

86,780

 

$

11,257

 

$

 —

 

$

98,037

Short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasuries

 

$

51,726

 

$

 —

 

$

 —

 

$

51,726

Government agency securities

 

 

 —

 

 

4,964

 

 

 —

 

 

4,964

Corporate debt

 

 

 —

 

 

1,999

 

 

 —

 

 

1,999

Commercial paper

 

 

 —

 

 

8,526

 

 

 —

 

 

8,526

Total

 

$

51,726

 

$

15,489

 

$

 —

 

$

67,215

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Certificate of deposits and time deposits

 

$

65,571

 

$

 —

 

$

 —

 

$

65,571

U.S. treasuries

 

 

3,990

 

 

 —

 

 

 —

 

 

3,990

Total

 

$

69,561

 

$

 —

 

$

 —

 

$

69,561

Short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasuries

 

$

37,184

 

$

 —

 

$

 —

 

$

37,184

Corporate debt

 

 

 —

 

 

8,516

 

 

 —

 

 

8,516

Commercial paper

 

 

 —

 

 

2,489

 

 

 —

 

 

2,489

Total

 

$

37,184

 

$

11,005

 

$

 —

 

$

48,189

 

Trading Securities And Certain Trading Asset [Table Text Block]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Gross

    

Gross

    

 

 

 

Amortized

 

Unrealized

 

Unrealized

 

Estimated

 

 

Cost

 

Gains

 

Losses

 

Fair Value

 

 

(in thousands)

March 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasuries

 

$

51,715

 

$

11

 

$

 —

 

$

51,726

Government agency securities

 

 

4,964

 

 

 —

 

 

 —

 

 

4,964

Corporate debt

 

 

1,999

 

 

 —

 

 

 —

 

 

1,999

Commercial paper

 

 

8,526

 

 

 —

 

 

 —

 

 

8,526

Total

 

$

67,204

 

$

11

 

$

 —

 

$

67,215

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasuries

 

$

37,191

 

$

 —

 

$

(7)

 

$

37,184

Corporate debt

 

 

8,525

 

 

 —

 

 

(9)

 

 

8,516

Commercial paper

 

 

2,489

 

 

 —

 

 

 —

 

 

2,489

Total

 

$

48,205

 

$

 —

 

$

(16)

 

$

48,189

 

Schedule of fair value and unrealized losses of available-for-sale securities in a loss position

 

 

 

 

 

 

 

 

 

December 31, 2018

 

    

 

    

Gross

 

 

Estimated

 

Unrealized

 

 

Fair Value

 

Losses

 

 

(in thousands)

U.S. treasuries

 

$

37,184

 

$

(7)

Corporate debt

 

 

8,516

 

 

(9)

Total

 

$

45,700

 

$

(16)

 

Schedule of inventories

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

    

2019

    

2018

 

 

(in thousands)

Materials

 

$

84,711

 

$

90,816

Work-in-process

 

 

36,299

 

 

42,354

Finished goods

 

 

27,093

 

 

23,141

Total

 

$

148,103

 

$

156,311

 

Schedule of property, plant, and equipment

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

    

2019

    

2018

 

 

(in thousands)

Land

 

$

5,669

 

$

5,669

Building and improvements

 

 

61,286

 

 

61,124

Machinery and equipment (1)

 

 

129,864

 

 

128,385

Leasehold improvements

 

 

7,041

 

 

9,033

Gross property, plant, and equipment

 

 

203,860

 

 

204,211

Less: accumulated depreciation and amortization

 

 

126,123

 

 

123,927

Net property, plant, and equipment

 

$

77,737

 

$

80,284

(1)

Machinery and equipment also includes software, furniture and fixtures

 

Schedule of intangible assets excluding goodwill

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2019

 

December 31, 2018

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

Accumulated

 

 

 

 

    

Gross

    

Amortization

    

 

    

Gross

    

Amortization

    

 

 

 

Carrying

 

and

 

Net

 

Carrying

 

and

 

Net

 

 

Amount

 

Impairment

 

Amount

 

Amount

 

Impairment

 

Amount

 

 

(in thousands)

Technology

 

$

337,218

 

$

293,528

 

$

43,690

 

$

337,218

 

$

290,808

 

$

46,410

Customer relationships

 

 

164,595

 

 

137,257

 

 

27,338

 

 

164,595

 

 

136,126

 

 

28,469

In-process R&D

 

 

13,710

 

 

10,530

 

 

3,180

 

 

13,710

 

 

10,530

 

 

3,180

Trademarks and tradenames

 

 

30,910

 

 

24,239

 

 

6,671

 

 

30,910

 

 

23,899

 

 

7,011

Other

 

 

3,686

 

 

3,634

 

 

52

 

 

3,686

 

 

3,607

 

 

79

Total

 

$

550,119

 

$

469,188

 

$

80,931

 

$

550,119

 

$

464,970

 

$

85,149

 

v3.19.1
Liabilities (Tables)
 3 Months Ended
Mar. 31, 2019
Liabilities  
Schedule of accrued expenses and other current liabilities

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

    

2019

    

2018

 

 

(in thousands)

Payroll and related benefits

 

$

17,722

 

$

20,486

Warranty

 

 

7,226

 

 

7,852

Operating lease liabilities

 

 

4,797

 

 

 —

Interest

 

 

1,992

 

 

4,321

Professional fees

 

 

3,059

 

 

2,897

Sales, use, and other taxes

 

 

1,256

 

 

2,670

Restructuring liability

 

 

1,720

 

 

2,213

Other

 

 

6,268

 

 

6,011

Total

 

$

44,040

 

$

46,450

 

Schedule of changes in product warranty reserves

 

 

 

 

 

    

(in thousands)

Balance - December 31, 2018

 

$

7,852

Warranties issued

 

 

1,427

Consumption of reserves

 

 

(1,978)

Changes in estimate

 

 

(75)

Balance - March 31, 2019

 

$

7,226

 

Schedule of restructuring accrual activities

 

 

 

 

 

 

 

 

 

 

 

    

Personnel

    

Facility

    

 

 

 

 

Severance and

 

Related Costs

 

 

 

 

 

Related Costs

 

and Other

 

Total

 

 

(in thousands)

Balance - December 31, 2018

 

$

2,143

 

$

70

 

$

2,213

Provision

 

 

1,320

 

 

110

 

 

1,430

Payments

 

 

(1,743)

 

 

(180)

 

 

(1,923)

Balance - March 31, 2019

 

$

1,720

 

$

 —

 

$

1,720

 

Schedule of changes in deferred revenue

 

 

 

 

 

 

(in thousands)

Balance - December 31, 2018

 

$

44,415

Deferral of revenue

 

 

792

Recognition of previously deferred revenue

 

 

(2,887)

Balance - March 31, 2019

 

$

42,320

 

Schedule of carrying value of Convertible Senior Notes

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

    

2019

    

2018

 

 

(in thousands)

Principal amount

 

$

345,000

 

$

345,000

Unamortized debt discount

 

 

(49,537)

 

 

(52,336)

Unamortized transaction costs

 

 

(4,990)

 

 

(5,272)

Net carrying value

 

$

290,473

 

$

287,392

 

Schedule of interest expense related to Convertible Senior Notes

 

 

 

 

 

 

 

 

 

 

Three months ended March 31,

 

 

    

2019

    

2018

 

 

 

(in thousands)

 

Cash Interest Expense

 

 

  

 

 

  

 

Coupon interest expense

 

$

2,329

 

$

2,329

 

Non-Cash Interest Expense

 

 

  

 

 

  

 

Amortization of debt discount

 

 

2,799

 

 

2,598

 

Amortization of transaction costs

 

 

282

 

 

261

 

Total Interest Expense

 

$

5,410

 

$

5,188

 

 

v3.19.1
Commitments and Contingencies (Tables)
 3 Months Ended
Mar. 31, 2019
Commitments and Contingencies  
Schedule of minimum lease commitments 2019

Minimum lease commitments at March 31, 2019 for property and equipment under operating lease agreements are payable as follows:

 

 

 

 

 

 

 

Operating

 

    

Leases

 

 

(in thousands)

Payments due by period:

 

 

 

2019 (excluding three months ended March 31, 2019)

 

$

4,144

2020

 

 

5,233

2021

 

 

2,431

2022

 

 

1,334

2023

 

 

853

Thereafter

 

 

548

Total future minimum lease payments

 

 

14,543

Less: Imputed interest

 

 

(1,364)

Total

 

 

13,179

 

 

 

 

Reported as of March 31, 2019

 

 

 

Other current liabilities

 

 

4,797

Operating lease liabilities

 

 

8,382

Total

 

$

13,179

 

Schedule of minimum lease commitments 2018

Minimum lease commitments at December 31, 2018 for property and equipment under operating lease agreements were payable as follows:

 

 

 

 

 

 

 

Operating

 

    

Leases

 

 

(in thousands)

Payments due by period:

 

 

2019

 

$

5,143

2020

 

 

5,056

2021

 

 

2,432

2022

 

 

1,812

2023

 

 

1,066

Thereafter

 

 

548

Total

 

$

16,057

 

v3.19.1
Derivative Financial Instruments (Tables)
 3 Months Ended
Mar. 31, 2019
Derivative Financial Instruments  
Schedule of gains and (losses) and weighted average notional amount of derivatives

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31, 2018

 

 

    

 

Gains
(Losses)

    

Weighted average
notional amount

 

 

 

 

(in thousands)

 

Foreign currency exchange forwards

 

$

 

17

 

$

930

 

 

v3.19.1
Equity (Tables)
 3 Months Ended
Mar. 31, 2019
Equity  
Schedule of Stockholders' Equity

 

    

 

    

 

 

    

 

 

 

 

 

    

 

 

    

 

 

    

Accumulated

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

Other

 

 

 

 

 

Common Stock

 

Treasury Stock

 

Paid-in

 

Accumulated

 

Comprehensive

 

 

 

 

 

Shares

 

Amount

 

Shares

    

Amount

 

Capital

 

Deficit

 

Income

 

Total

 

 

(in thousands)

Balance at December 31, 2018

 

48,547

 

$

485

 

 

523

 

$

(5,872)

 

$

1,061,325

 

$

(619,983)

 

$

1,820

 

$

437,775

Net loss

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(18,530)

 

 

 —

 

 

(18,530)

Other comprehensive income, net of tax

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

38

 

 

38

Share-based compensation expense

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

3,157

 

 

 —

 

 

 —

 

 

3,157

Net issuance under employee stock plans

 

128

 

 

 2

 

 

(523)

 

 

5,872

 

 

(6,303)

 

 

(213)

 

 

 —

 

 

(642)

Balance at March 31, 2019

 

48,675

 

$

487

 

 

 —

 

$

 —

 

$

1,058,179

 

$

(638,726)

 

$

1,858

 

$

421,798

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

 

    

 

 

 

 

 

    

 

 

    

 

 

    

Accumulated

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

Other

 

 

 

 

 

Common Stock

 

Treasury Stock

 

Paid-in

 

Accumulated

 

Comprehensive

 

 

 

 

 

Shares

 

Amount

 

Shares

    

Amount

 

Capital

 

Deficit

 

Income

 

Total

 

 

(in thousands)

Balance at December 31, 2017

 

48,229

 

$

482

 

 

85

 

$

(1,284)

 

$

1,051,953

 

$

(212,870)

 

$

1,812

 

$

840,093

Net loss

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(15,827)

 

 

 —

 

 

(15,827)

Other comprehensive income, net of tax

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

24

 

 

24

Share-based compensation expense

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

4,537

 

 

 —

 

 

 —

 

 

4,537

Net issuance under employee stock plans

 

462

 

 

 5

 

 

(115)

 

 

1,728

 

 

(2,159)

 

 

 —

 

 

 —

 

 

(426)

Purchases of common stock

 

 —

 

 

 —

 

 

30

 

 

(444)

 

 

 —

 

 

 —

 

 

 —

 

 

(444)

Balance at March 31, 2018

 

48,691

 

$

487

 

 

 —

 

$

 —

 

$

1,054,331

 

$

(228,697)

 

$

1,836

 

$

827,957

 

Schedule of the changes in the balances of each component of AOCI, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized

 

 

 

 

 

 

 

Gains (Losses)

 

 

 

 

 

Foreign

 

on Available

 

 

 

 

 

Currency

 

for Sale 

 

 

 

 

    

Translation

    

Securities

    

Total

 

 

(in thousands)

Balance - December 31, 2018

 

$

1,836

 

$

(16)

 

$

1,820

Other comprehensive income (loss)

 

 

11

 

 

27

 

 

38

Balance - March 31, 2019

 

$

1,847

 

$

11

 

$

1,858

 

v3.19.1
Share-based compensation (Tables)
 3 Months Ended
Mar. 31, 2019
Stock Plans  
Schedule of share-based compensation expense

 

 

 

 

 

 

 

 

 

 

Three months ended March 31,

 

 

    

2019

    

2018

    

 

 

(in thousands)

 

Cost of sales

 

$

470

 

$

554

 

Research and development

 

 

792

 

 

954

 

Selling, general, and administrative

 

 

1,895

 

 

2,857

 

Restructuring

 

 

 —

 

 

172

 

Total

 

$

3,157

 

$

4,537

 

 

Summary of stock option activity

 

 

 

 

 

 

 

 

 

 

Weighted 

 

 

Number of

 

Average

 

    

Shares

    

Exercise Price

 

 

(in thousands)

 

 

 

Balance -  December 31, 2018

 

1,222

 

 

34.80

Expired or forfeited

 

(33)

 

 

33.82

Balance -  March 31, 2019

 

1,189

 

 

34.83

 

Summary of non-vested restricted and performance shares activity

 

 

 

 

 

 

 

    

 

    

Weighted

 

 

 

 

Average

 

 

Number of

 

Grant Date

 

 

Shares

 

Fair Value

 

 

(in thousands)

 

 

 

Balance -  December 31, 2018

 

2,218

 

 

20.74

Granted

 

974

 

 

11.32

Performance award adjustments

 

(9)

 

 

32.67

Vested

 

(156)

 

 

21.71

Forfeited

 

(89)

 

 

21.84

Balance -  March 31, 2019

 

2,938

 

 

17.50

 

v3.19.1
Income Taxes (Tables)
 3 Months Ended
Mar. 31, 2019
Income Taxes  
Schedule of loss before income taxes and income tax benefit

 

 

 

 

 

 

 

 

 

 

Three months ended March 31,

 

 

    

2019

    

2018

 

 

 

(in thousands)

 

Loss before income taxes

 

$

(18,340)

 

$

(16,057)

 

Income tax expense (benefit)

 

$

190

 

$

(230)

 

 

v3.19.1
Segment Reporting and Geographic Information (Tables)
 3 Months Ended
Mar. 31, 2019
Segment Reporting and Geographic Information  
Schedule of sales by end-market

 

 

 

 

 

 

 

 

 

 

Three months ended March 31,

 

 

    

2019

 

2018

    

 

 

(in thousands)

 

Sales by end-market

 

 

 

 

 

 

 

Advanced Packaging, MEMS & RF Filters

 

$

23,127

 

$

27,153

 

LED Lighting, Display & Compound Semiconductor

 

 

13,550

 

 

89,916

 

Front-End Semiconductor

 

 

22,617

 

 

9,457

 

Scientific & Industrial

 

 

40,077

 

 

32,048

 

Total

 

$

99,371

 

$

158,574

 

Sales by geographic region

 

 

 

 

 

 

 

United States

 

$

32,315

 

$

23,754

 

China

 

 

10,159

 

 

75,395

 

EMEA(1)

 

 

17,827

 

 

15,745

 

Rest of World

 

 

39,070

 

 

43,680

 

   Total

 

$

99,371

 

$

158,574

 

(1)

EMEA consists of Europe, the Middle East, and Africa
v3.19.1
Basis of Presentation - Fiscal Period (Details)
 3 Months Ended
Mar. 31, 2019
Basis of Presentation  
Fiscal period duration (in days) 91 days
v3.19.1
Basis of Presentation - Revenue Recognition (Details)
 3 Months Ended
Mar. 31, 2019
Basis of Presentation  
Billing retention recognized at time of transfer of control (as a percent) 10.00%
Revenue, Practical Expedient, Incremental Cost of Obtaining Contract true
v3.19.1
Basis of Presentation - Recently Adopted Accounting Standards (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2019
Jan. 01, 2019
Accounting Changes    
Lease, Practical Expedients, Package true  
Operating lease right-of-use-assets $ 12,874  
Operating lease liability $ 13,179  
ASU 2016-02 | Adjustment    
Accounting Changes    
Operating lease right-of-use-assets   $ 14,200
Operating lease liability   $ 14,200
v3.19.1
Income (Loss) Per Common Share - Basic and Diluted (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Income (Loss) Per Share    
Net income (loss) $ (18,530) $ (15,827)
Net income (loss) per common share:    
Basic (in dollars per share) $ (0.40) $ (0.34)
Diluted (in dollars per share) $ (0.40) $ (0.34)
Weighted average shares reconciliation    
Basic weighted average shares outstanding 46,848 46,963
Diluted weighted average shares outstanding 46,848 46,963
v3.19.1
Income (Loss) Per Common Share - Shares Excluded from EPS (Details) - shares
shares in Thousands
 3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Common share equivalents    
Diluted income (loss) per share    
Securities excluded from the diluted calculation as their effect would be antidilutive 320 169
Potentially dilutive shares    
Diluted income (loss) per share    
Securities excluded from the diluted calculation as their effect would be antidilutive 2,426 2,092
Potential shares to be issued for settlement of the Convertible Senior Notes    
Diluted income (loss) per share    
Securities excluded from the diluted calculation as their effect would be antidilutive 8,618 8,618
v3.19.1
Assets - Fair Value (Details) - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Short-term investments    
Transfer of assets from Level 1 to Level 2 $ 0  
Transfer of assets from Level 2 to Level 1 0  
Transfer of Liabilities from Level 1 to Level 2 0  
Transfer of Liabilities from Level 2 to Level 1 0  
Measured at fair value on a recurring basis    
Cash equivalents    
Total Cash equivalents 98,037 $ 69,561
Short-term investments    
Total Short-term investments 67,215 48,189
Measured at fair value on a recurring basis | Certificate of deposits and time deposits    
Cash equivalents    
Total Cash equivalents 66,863 65,571
Measured at fair value on a recurring basis | U.S. treasuries    
Cash equivalents    
Total Cash equivalents 19,917 3,990
Short-term investments    
Total Short-term investments 51,726 37,184
Measured at fair value on a recurring basis | Government agency securities    
Short-term investments    
Total Short-term investments 4,964  
Measured at fair value on a recurring basis | Corporate debt    
Short-term investments    
Total Short-term investments 1,999 8,516
Measured at fair value on a recurring basis | Commercial paper    
Cash equivalents    
Total Cash equivalents 11,257  
Short-term investments    
Total Short-term investments 8,526 2,489
Measured at fair value on a recurring basis | Level 1    
Cash equivalents    
Total Cash equivalents 86,780 69,561
Short-term investments    
Total Short-term investments 51,726 37,184
Measured at fair value on a recurring basis | Level 1 | Certificate of deposits and time deposits    
Cash equivalents    
Total Cash equivalents 66,863 65,571
Measured at fair value on a recurring basis | Level 1 | U.S. treasuries    
Cash equivalents    
Total Cash equivalents 19,917 3,990
Short-term investments    
Total Short-term investments 51,726 37,184
Measured at fair value on a recurring basis | Level 2    
Cash equivalents    
Total Cash equivalents 11,257  
Short-term investments    
Total Short-term investments 15,489 11,005
Measured at fair value on a recurring basis | Level 2 | Government agency securities    
Short-term investments    
Total Short-term investments 4,964  
Measured at fair value on a recurring basis | Level 2 | Corporate debt    
Short-term investments    
Total Short-term investments 1,999 8,516
Measured at fair value on a recurring basis | Level 2 | Commercial paper    
Cash equivalents    
Total Cash equivalents 11,257  
Short-term investments    
Total Short-term investments $ 8,526 $ 2,489
v3.19.1
Assets - Available-For-Sale Securities (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2019
Sep. 30, 2018
Mar. 31, 2018
Sep. 30, 2018
Dec. 31, 2018
Total available-for-sale securities          
Amortized Cost $ 67,204       $ 48,205
Gross Unrealized Gains 11        
Gross Unrealized Losses         (16)
Estimated Fair Value 67,215       48,189
Available-for-sale securities in a loss position          
Estimated Fair Value         45,700
Gross Unrealized Losses         (16)
Short-term investments in a continuous loss position          
Investments that had been in a continuous loss position for more than 12 months 0       0
Realized gains or losses          
Realized gains 0   $ 0    
Realized losses   $ 0   $ 0  
U.S. treasuries          
Total available-for-sale securities          
Amortized Cost 51,715       37,191
Gross Unrealized Gains 11        
Gross Unrealized Losses         (7)
Estimated Fair Value 51,726       37,184
Available-for-sale securities in a loss position          
Estimated Fair Value         37,184
Gross Unrealized Losses         (7)
Government agency securities          
Total available-for-sale securities          
Amortized Cost 4,964        
Estimated Fair Value 4,964        
Corporate debt          
Total available-for-sale securities          
Amortized Cost 1,999       8,525
Gross Unrealized Losses         (9)
Estimated Fair Value 1,999       8,516
Available-for-sale securities in a loss position          
Estimated Fair Value         8,516
Gross Unrealized Losses         (9)
Commercial paper          
Total available-for-sale securities          
Amortized Cost 8,526       2,489
Estimated Fair Value $ 8,526       $ 2,489
v3.19.1
Assets - Accounts Receivable (Details) - USD ($)
$ in Millions
Mar. 31, 2019
Dec. 31, 2018
Assets    
Allowance for doubtful accounts receivable $ 0.2 $ 0.3
v3.19.1
Assets - Inventories (Details) - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Inventories    
Materials $ 84,711 $ 90,816
Work-in-process 36,299 42,354
Finished goods 27,093 23,141
Total $ 148,103 $ 156,311
v3.19.1
Assets - Prepaid Expenses and Other Current Assets (Details) - USD ($)
$ in Millions
Mar. 31, 2019
Dec. 31, 2018
Prepaid expenses and other current assets    
Deposits with suppliers $ 15.1 $ 12.8
v3.19.1
Assets - Property, Plant, and Equipment (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Dec. 31, 2018
Property, plant, and equipment      
Gross property, plant and equipment $ 203,860   $ 204,211
Less: accumulated depreciation and amortization 126,123   123,927
Net property, plant, and equipment 77,737   80,284
Depreciation expense 4,600 $ 4,200  
Land      
Property, plant, and equipment      
Gross property, plant and equipment 5,669   5,669
Building and improvements      
Property, plant, and equipment      
Gross property, plant and equipment 61,286   61,124
Machinery and equipment      
Property, plant, and equipment      
Gross property, plant and equipment 129,864   128,385
Leaseholds improvements      
Property, plant, and equipment      
Gross property, plant and equipment $ 7,041   $ 9,033
v3.19.1
Assets - Goodwill (Details)
$ in Millions
 3 Months Ended
Mar. 31, 2019
USD ($)
Goodwill  
Changes in goodwill during the period $ 0.0
v3.19.1
Assets - Intangible Assets (Details) - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Intangible assets    
Total Gross Intangible Assets $ 550,119 $ 550,119
Accumulated Amortization and Impairment 469,188 464,970
Total Net Intangible Assets 80,931 85,149
In-process R&D    
Intangible assets    
Gross Carrying Amount, Indefinite-lived intangible assets 13,710 13,710
Accumulated Amortization and Impairment, Indefinite-lived intangible assets 10,530 10,530
Net Amount, Indefinite-lived intangible assets 3,180 3,180
Technology    
Intangible assets    
Gross Carrying Amount, Definite-lived intangible assets 337,218 337,218
Accumulated Amortization and Impairment, Definite-lived intangible assets 293,528 290,808
Net Amount, Definite-lived intangible assets 43,690 46,410
Customer relationships    
Intangible assets    
Gross Carrying Amount, Definite-lived intangible assets 164,595 164,595
Accumulated Amortization and Impairment, Definite-lived intangible assets 137,257 136,126
Net Amount, Definite-lived intangible assets 27,338 28,469
Trademarks and tradenames    
Intangible assets    
Gross Carrying Amount, Definite-lived intangible assets 30,910 30,910
Accumulated Amortization and Impairment, Definite-lived intangible assets 24,239 23,899
Net Amount, Definite-lived intangible assets 6,671 7,011
Other Intangible Assets    
Intangible assets    
Gross Carrying Amount, Definite-lived intangible assets 3,686 3,686
Accumulated Amortization and Impairment, Definite-lived intangible assets 3,634 3,607
Net Amount, Definite-lived intangible assets $ 52 $ 79
v3.19.1
Assets - Other Assets (Details) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Mar. 31, 2019
Dec. 31, 2018
Kateeva    
Other Investment    
Carrying value of investment $ 21.0 $ 21.0
Separate non-marketable investment    
Other Investment    
Amount of investment made $ 3.5 $ 3.5
Separate non-marketable investment | Maximum    
Other Investment    
Percentage ownership of cost method investee 20.00%  
v3.19.1
Liabilities - Accrued Expenses and Other Current Liabilities (Details) - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Accrued expenses and other current liabilities    
Payroll and related benefits $ 17,722 $ 20,486
Warranty 7,226 7,852
Operating lease liability 4,797  
Interest 1,992 4,321
Professional fees 3,059 2,897
Sales, use, and other taxes 1,256 2,670
Restructuring liability 1,720 2,213
Other 6,268 6,011
Total $ 44,040 $ 46,450
v3.19.1
Liabilities - Warranty (Details)
$ in Thousands
 3 Months Ended
Mar. 31, 2019
USD ($)
Warranty  
Warranty period 1 year
Balance, beginning of the year $ 7,852
Warranties issued 1,427
Consumption of reserves (1,978)
Changes in estimate (75)
Balance, end of the year $ 7,226
v3.19.1
Liabilities - Restructuring Accruals (Details)
$ in Thousands
 3 Months Ended
Mar. 31, 2019
USD ($)
Jun. 30, 2018
employee
Mar. 31, 2018
USD ($)
Restructuring Accruals      
Number of employees terminated | employee   40  
Restructuring charges $ 1,430   $ 2,695
Restructuring accruals roll forward      
Balance at the beginning of the period 2,213    
Provision 1,430    
Payments (1,923)    
Balance at the end of the period 1,720    
Personnel severance and related costs      
Restructuring accruals roll forward      
Balance at the beginning of the period 2,143    
Provision 1,320    
Payments (1,743)    
Balance at the end of the period 1,720    
Facility Related Costs and Other      
Restructuring accruals roll forward      
Balance at the beginning of the period 70    
Provision 110    
Payments $ (180)    
v3.19.1
Liabilities - Customer Deposits and Deferred Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2019
Dec. 31, 2018
Liabilities    
Customer deposits and deferred revenue $ 26,600 $ 28,300
Changes in deferred revenue    
Beginning balance 44,415  
Deferral of revenue 792  
Recognition of previously deferred revenue (2,887)  
Ending balance $ 42,320  
v3.19.1
Liabilities - Performance Obligations Amount (Details)
$ in Millions
Mar. 31, 2019
USD ($)
Liabilities  
Remaining performance obligations $ 68.5
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01  
Performance obligations  
Remaining performance obligations, expected timing of satisfaction 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01  
Performance obligations  
Remaining performance obligations, expected timing of satisfaction 2 years
v3.19.1
Liabilities - Performance Obligations Timing (Details)
 3 Months Ended
Mar. 31, 2019
Liabilities  
Revenue, Practical Expedient, Remaining Performance Obligation true
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01  
Performance obligations  
Percentage of remaining performance obligation expected to be recognized 65.00%
v3.19.1
Liabilities - Convertible Senior Notes (Details) - Convertible Notes - USD ($)
$ in Thousands
 3 Months Ended
Jan. 10, 2017
Mar. 31, 2019
Mar. 31, 2018
Dec. 31, 2018
Debt        
Principal amount $ 345,000 $ 345,000   $ 345,000
Interest rate (as a percent) 2.70%      
Proceeds received, net of transaction fees $ 335,800      
Unamortized debt discount   (49,537)   (52,336)
Unamortized transaction costs   (4,990)   (5,272)
Net carrying value   290,473   $ 287,392
Cash Interest Expense        
Coupon interest expense   2,329 $ 2,329  
Non-Cash Interest Expense        
Amortization of debt discount   2,799 2,598  
Amortization of transaction costs   282 261  
Total Interest Expense   5,410 $ 5,188  
Estimated fair value   $ 295,000    
Convertible Debt, Fair Value by Fair Value Hierarchy Level [Extensible List]   Fair Value Inputs Level2 [Member]    
v3.19.1
Liabilities - Other Liabilities (Details) - USD ($)
$ in Millions
Mar. 31, 2019
Dec. 31, 2018
Other Assets    
Other liabilities    
Deferred compensation plan assets $ 3.4 $ 3.2
Other Liabilities    
Other liabilities    
Deferred compensation plan liabilities 2.9 3.5
Asset retirement obligations 3.2 3.2
Medical and dental benefits 2.2 2.2
Income taxes payable $ 1.0 $ 1.0
v3.19.1
Commitments and Contingencies - Lease terms (Details)
Mar. 31, 2019
Leases  
Remaining lease term 3 years
Weighted average discount rate (as a percent) 6.00%
v3.19.1
Commitments and Contingencies - Minimum lease commitments 2019 (Details)
$ in Thousands
Mar. 31, 2019
USD ($)
Minimum lease commitments, Payments due by period:  
2019 (excluding three months ended March 31, 2019) $ 4,144
2020 5,233
2021 2,431
2022 1,334
2023 853
Thereafter 548
Total future minimum lease payments 14,543
Less: Imputed interest (1,364)
Total operating lease liabilities 13,179
Operating lease liability, current $ 4,797
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] Accrued and Other Liabilities, Current
Operating lease liability, noncurrent $ 8,382
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] Operating lease liability, noncurrent
Total operating lease liabilities $ 13,179
v3.19.1
Commitments and Contingencies - Minimum lease commitments 2018 (Details)
$ in Thousands
Dec. 31, 2018
USD ($)
Minimum lease commitments, Payments due by period:  
2019 $ 5,143
2020 5,056
2021 2,432
2022 1,812
2023 1,066
Thereafter 548
Total $ 16,057
v3.19.1
Commitments and Contingencies - Lease costs (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Lease cost    
Operating lease cost $ 1.4  
Variable lease cost 0.6  
Lease expense   $ 1.7
Operating cash flows from operating leases $ 1.5  
v3.19.1
Commitments and Contingencies - Purchase Commitments and Bank Guarantees (Details)
$ in Millions
Mar. 31, 2019
USD ($)
Purchase commitments  
Purchase commitments due within one year $ 90.5
Bank guarantees  
Bank guarantees and letters of credit outstanding 8.5
Unused bank guarantees and letters of credit $ 66.1
v3.19.1
Commitments and Contingencies - Legal Proceedings (Detail)
Aug. 08, 2018
case
Ultratech acquisition litigation  
Legal Proceedings  
Number of purported class action complaints filed 2
v3.19.1
Derivative Financial Instruments (Details) - Not designated as hedges - Foreign currency exchange forwards
$ in Thousands
 3 Months Ended
Mar. 31, 2019
USD ($)
Derivative Financial Instruments  
Gains (losses) $ 17
Weighted average notional amount $ 930
v3.19.1
Equity - Statement of Stockholders' Equity (Details) - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Increase (Decrease) in Stockholders' Equity    
Balance at the beginning of the period $ 437,775 $ 840,093
Net loss (18,530) (15,827)
Other comprehensive income, net of tax 38 24
Share-based compensation expense 3,157 4,537
Net issuance under employee stock plans (642) (426)
Purchases of common stock   (444)
Balance at the end of the period 421,798 827,957
Common Stock    
Increase (Decrease) in Stockholders' Equity    
Balance at the beginning of the period $ 485 $ 482
Balance (in shares) 48,547 48,229
Net issuance under employee stock plans $ 2 $ 5
Net issuance under employee stock plans (in shares) 128 462
Balance at the end of the period $ 487 $ 487
Balance (in shares) 48,675 48,691
Treasury Stock    
Increase (Decrease) in Stockholders' Equity    
Balance at the beginning of the period $ (5,872) $ (1,284)
Balance (in shares) 523 85
Net issuance under employee stock plans $ 5,872 $ 1,728
Net issuance under employee stock plans (in shares) (523) (115)
Purchases of common stock   $ (444)
Purchase of common stock (in shares)   30
Additional Paid-in Capital    
Increase (Decrease) in Stockholders' Equity    
Balance at the beginning of the period $ 1,061,325 $ 1,051,953
Share-based compensation expense 3,157 4,537
Net issuance under employee stock plans (6,303) (2,159)
Balance at the end of the period 1,058,179 1,054,331
Accumulated Deficit    
Increase (Decrease) in Stockholders' Equity    
Balance at the beginning of the period (619,983) (212,870)
Net loss (18,530) (15,827)
Net issuance under employee stock plans (213)  
Balance at the end of the period (638,726) (228,697)
Accumulated Other Comprehensive Income    
Increase (Decrease) in Stockholders' Equity    
Balance at the beginning of the period 1,820 1,812
Other comprehensive income, net of tax 38 24
Balance at the end of the period $ 1,858 $ 1,836
v3.19.1
Equity - AOCI Rollforward (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Changes in the balances of each component of AOCI    
Balance at the beginning of the period $ 437,775 $ 840,093
Total other comprehensive income (loss), net of tax 38 24
Balance at the end of the period 421,798 827,957
Accumulated Other Comprehensive Income    
Changes in the balances of each component of AOCI    
Balance at the beginning of the period 1,820 1,812
Total other comprehensive income (loss), net of tax 38  
Balance at the end of the period 1,858 $ 1,836
Foreign Currency Translation    
Changes in the balances of each component of AOCI    
Balance at the beginning of the period 1,836  
Total other comprehensive income (loss), net of tax 11  
Balance at the end of the period 1,847  
Unrealized Gains (Losses) on Available for Sale Securities    
Changes in the balances of each component of AOCI    
Balance at the beginning of the period (16)  
Total other comprehensive income (loss), net of tax 27  
Balance at the end of the period $ 11  
v3.19.1
Share-based compensation (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Share-based compensation    
Total $ 3,157 $ 4,537
Cost of sales    
Share-based compensation    
Total 470 554
Research and development    
Share-based compensation    
Total 792 954
Selling, general and administrative    
Share-based compensation    
Total $ 1,895 2,857
Restructuring    
Share-based compensation    
Total   $ 172
Restricted stock awards | Minimum    
Share-based compensation    
Expiration term 1 year  
Restricted stock awards | Maximum    
Share-based compensation    
Expiration term 5 years  
Stock options    
Number of Shares    
Outstanding at the beginning of the period (in shares) 1,222  
Expired or forfeited (in shares) (33)  
Outstanding at the end of the period (in shares) 1,189  
Weighted Average Exercise Price    
Outstanding at the beginning of the period (in dollars per share) $ 34.80  
Expired or forfeited (in dollars per share) 33.82  
Outstanding at the end of the period (in dollars per share) $ 34.83  
Non-vested restricted shares and performance shares    
Number of Shares    
Outstanding at the beginning of the period (in shares) 2,218  
Granted (in shares) 974  
Performance award adjustments (in shares) (9)  
Vested (in shares) (156)  
Forfeited (in shares) (89)  
Outstanding at the end of the period (in shares) 2,938  
Weighted Average Grant Date Fair Value    
Outstanding at the beginning of the period (in dollars per share) $ 20.74  
Granted (in dollars per share) 11.32  
Performance award adjustments (in dollars per share) 32.67  
Vested (in dollars per share) 21.71  
Forfeited (in dollars per share) 21.84  
Outstanding at the end of the period (in dollars per share) $ 17.50  
v3.19.1
Income Taxes (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Tax reconciliation disclosures    
Loss before income taxes $ (18,340) $ (16,057)
Income tax expense (benefit) 190 (230)
Domestic    
Tax reconciliation disclosures    
Income tax expense (benefit) 100 100
Foreign tax    
Tax reconciliation disclosures    
Income tax expense (benefit) $ 100 $ (300)
v3.19.1
Segment Reporting and Geographic Information (Details)
$ in Thousands
 3 Months Ended
Mar. 31, 2019
USD ($)
item
segment
Mar. 31, 2018
USD ($)
Revenue reporting by end-market and geographic region    
Number of operating segments | segment 1  
Number of reportable segments | segment 1  
Number of key markets | item 4  
Sale by end-market $ 99,371 $ 158,574
United States    
Revenue reporting by end-market and geographic region    
Sale by end-market 32,315 23,754
China    
Revenue reporting by end-market and geographic region    
Sale by end-market 10,159 75,395
EMEA    
Revenue reporting by end-market and geographic region    
Sale by end-market 17,827 15,745
Rest Of World    
Revenue reporting by end-market and geographic region    
Sale by end-market 39,070 43,680
Advanced Packaging, MEMS & RF Filters    
Revenue reporting by end-market and geographic region    
Sale by end-market 23,127 27,153
LED Lighting, Display & Compound Semiconductor    
Revenue reporting by end-market and geographic region    
Sale by end-market 13,550 89,916
Front-End Semiconductor    
Revenue reporting by end-market and geographic region    
Sale by end-market 22,617 9,457
Scientific & Industrial    
Revenue reporting by end-market and geographic region    
Sale by end-market $ 40,077 $ 32,048