Veeco Instruments Inc. announced its financial results for the fourth quarter and full year ended December 31, 2009. Veeco reports its results on a generally accepted accounting principles ("GAAP") basis, and also provides results excluding certain items. Please refer to the attached table for details of the reconciliation between GAAP operating results and Non-GAAP operating results.

John R. Peeler, Veeco's Chief Executive Officer, commented, "We are pleased to report these excellent fourth quarter results. Our fourth quarter revenue was $146 million, a record level for Veeco, increasing 33% from the fourth quarter of 2008 and 48% sequentially. This strong revenue drove EBITA of $25.1 million, GAAP EPS of $0.50 per share, and non-GAAP EPS of $0.41 per share. Fourth quarter LED & Solar revenues were a record $98 million, with MOCVD revenues more than doubling on a sequential basis. All three of our businesses, LED & Solar, Data Storage, and Metrology reported improved sequential gross margins, with overall Veeco margins increasing to 45%. Veeco generated $37 million in cash from operations during the fourth quarter."

"Veeco's fourth quarter 2009 orders were $262 million, surpassing our prior record of $226 million achieved in the third quarter by 16% and nearly 200% higher than the fourth quarter of 2008," continued Mr. Peeler. "LED & Solar orders were $177 million, with sixteen LED manufacturers placing orders for TurboDisc(R) Metal Organic Chemical Vapor Deposition (MOCVD) Systems during the quarter. We continued to see strong MOCVD demand as LED manufacturers ramp production for laptop and TV backlighting as well as general illumination. Data Storage orders were $53 million, up over 200% sequentially, as hard drive customers invested in Veeco's market leading front-end etch and deposition systems and back-end processing tools for technology and capacity requirements. In Metrology we booked $32 million, our best order performance in six quarters, with excellent customer traction for our newest generation instruments, particularly our Dimension(R) Icon(R) Atomic Force Microscope, and improvement overall in research and industrial customers' spending patterns. It is particularly gratifying to end 2009 with such strong bookings levels in all three Veeco businesses."

Outlook
Regarding Veeco's outlook, Mr. Peeler commented, "With record backlog of $402 million at the end of December, Veeco begins 2010 with unprecedented momentum. Business patterns in LED remain very strong in the first quarter, similar to what we experienced in the latter half of 2009, with multi-tool system orders being quoted to a large number of customers. Leading global LED manufacturers are showing strong interest in our newly introduced TurboDisc K465i(TM) GaN MOCVD System, which we believe is the best product on the market today. We are increasing manufacturing capacity to satisfy customer demand, with a current plan to ramp capacity to 45 or more tools this quarter and approximately 70 by the second quarter. Our highest priority is to satisfy our customers with on-time deliveries and world-class customer support of their manufacturing ramps."

"We believe our Data Storage business, with its dramatically lowered breakeven structure and backlog of $60 million ending 2009, is in excellent position starting 2010," added Mr. Peeler. "We remain well-aligned with our key customers and plan to introduce new technologies to continue to advance areal densities for thin film magnetic heads. In Metrology, our new product pipeline is the best it's been in years, and the business returned to profitability in both Q3 and Q4 2009. We currently expect all three Veeco businesses to grow revenues and profits in 2010."

Q1'10 Guidance
Veeco's first quarter 2010 revenues are currently forecasted to be between $150-$165 million, with earnings per share between $0.50 to $0.62 on a GAAP basis and $0.41 to $0.50 on a non-GAAP basis. Please refer to the attached financial tables for more details.