<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 1997
Commission file number 0-16244
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VEECO INSTRUMENTS INC.
(Exact name of registrant as specified in its charter)
Delaware 11-2989601
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number
Terminal Drive 11803
Plainview, New York (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (516) 349-8300
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Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days:
YES X NO
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8,851,988 shares of common stock, $.01 par value per share, were
outstanding as of August 12, 1997.
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<PAGE>
VEECO INSTRUMENTS INC.
INDEX
PAGE
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited):
Condensed Consolidated Statements of Income - Three
Months Ended June 30, 1997 and 1996.................................. 3
Condensed Consolidated Statements of Income - Six Months
Ended June 30, 1997 and 1996......................................... 4
Condensed Consolidated Balance Sheets -June 30, 1997 and
December 31, 1996.................................................... 5
Condensed Consolidated Statements of Cash Flows -Six
Months Ended June 30, 1997 and 1996.................................. 6
Notes to Condensed Consolidated Financial Statements................. 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................................ 9
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders................ 12
Item 6. Exhibits and Reports on Form 8-K................................... 12
SIGNATURES................................................................. 14
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<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Veeco Instruments Inc.
and Subsidiaries
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
--------------------
<S> <C> <C>
1997 1996
--------- ---------
Net sales................................................................................... $ 33,867 $ 25,095
Cost of sales............................................................................... 18,798 13,972
--------- ---------
Gross profit................................................................................ 15,069 11,123
Costs and expenses:
Research and development expense.......................................................... 3,561 2,579
Selling, general and administrative expense............................................... 6,668 5,216
Amortization expense...................................................................... 69 52
Other--net................................................................................ (51) 25
Purchased in process technology........................................................... 4,200 --
--------- ---------
Operating income............................................................................ 622 3,251
Interest income, net........................................................................ 105 162
--------- ---------
Income before income taxes.................................................................. 727 3,413
Income taxes................................................................................ 281 1,307
--------- ---------
Net income.................................................................................. $ 446 $ 2,106
--------- ---------
--------- ---------
Net income per common share................................................................. $ 0.07 $ 0.35
--------- ---------
--------- ---------
Shares used in computation.................................................................. 6,264 5,958
--------- ---------
--------- ---------
</TABLE>
See accompanying notes.
-3-
<PAGE>
Veeco Instruments Inc.
and Subsidiaries
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------------------
<S> <C> <C>
1997 1996
--------- ---------
Net sales................................................................................... $ 63,418 $ 45,739
Cost of sales............................................................................... 35,440 25,409
--------- ---------
Gross profit................................................................................ 27,978 20,330
Costs and expenses:
Research and development expense.......................................................... 6,513 4,583
Selling, general and administrative expense............................................... 12,433 9,589
Amortization expense...................................................................... 138 105
Other--net................................................................................ (69) 117
Purchased in process technology........................................................... 4,200 --
--------- ---------
Operating income............................................................................ 4,763 5,936
Interest income, net........................................................................ 210 362
--------- ---------
Income before income taxes.................................................................. 4,973 6,298
Income taxes................................................................................ 1,890 2,382
--------- ---------
Net income.................................................................................. $ 3,083 $ 3,916
--------- ---------
--------- ---------
Net income per common share................................................................. $ 0.50 $ 0.66
--------- ---------
--------- ---------
Shares used in computation.................................................................. 6,206 5,925
--------- ---------
--------- ---------
</TABLE>
See accompanying notes.
-4-
<PAGE>
Veeco Instruments Inc.
and Subsidiaries
Consolidated Balance Sheet
(In thousands)
<TABLE>
<CAPTION>
JUNE 30,
1997 DECEMBER 31,
(UNAUDITED) 1996
----------- ------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents........................................................... $ 21,230 $ 21,209
Accounts and trade notes receivable................................................. 23,397 19,826
Inventories......................................................................... 26,453 21,263
Prepaid expenses and other current assets........................................... 1,263 858
Deferred income taxes............................................................... 3,667 1,937
----------- ------------
Total current assets.................................................................. 76,010 65,093
Property, plant and equipment at cost, net............................................ 12,647 9,761
Excess of cost over net assets acquired............................................... 4,383 4,448
Other assets--net..................................................................... 2,766 1,025
----------- ------------
Total assets.......................................................................... $ 95,806 $ 80,327
----------- ------------
----------- ------------
Liabilities and shareholders' equity
Current liabilities:
Accounts payable.................................................................... $ 14,702 $ 11,196
Accrued expenses.................................................................... 16,005 9,964
Income taxes payable................................................................ 1,338 479
----------- ------------
Total current liabilities............................................................. 32,045 21,639
Deferred income taxes................................................................. 257 257
Other liabilities..................................................................... 414 461
Shareholders' equity:
Common stock........................................................................ 60 58
Additional paid-in capital.......................................................... 48,968 47,638
Retained earnings................................................................... 12,692 9,609
Stock options tax benefit........................................................... 1,290 --
Cumulative translation adjustment................................................... 80 665
----------- ------------
Total shareholders' equity............................................................ 63,090 57,970
----------- ------------
Total liabilities and shareholders' equity............................................ $ 95,806 $ 80,327
----------- ------------
----------- ------------
</TABLE>
See accompanying notes.
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<PAGE>
Veeco Instruments Inc.
and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------------------
<S> <C> <C>
1997 1996
--------- ---------
Operating activities
Net income.................................................................................. $ 3,083 $ 3,916
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization............................................................. 699 657
Deferred income taxes..................................................................... (1,730) (20)
Purchased in process technology........................................................... 4,200 --
Changes in operating assets and liabilities:
Accounts receivable....................................................................... (3,834) (979)
Inventories............................................................................... (3,582) (3,570)
Accounts payable.......................................................................... 3,533 1,534
Accrued expenses and other current liabilities............................................ 4,056 (733)
Other--net................................................................................ (289) (281)
--------- ---------
Net cash provided by operating activities................................................... 6,136 524
Investing activities
Capital expenditures........................................................................ (2,807) (1,219)
Net assets of business acquired............................................................. (4,375) --
--------- ---------
Net cash used in investing activities....................................................... (7,182) (1,219)
Financing activities
Proceeds from stock issuance................................................................ 1,332 224
Other....................................................................................... (14) (150)
--------- ---------
Net cash provided by financing activities................................................... 1,318 74
Effect of exchange rates on cash............................................................ (251) 114
--------- ---------
Net change in cash and cash equivalents..................................................... 21 (507)
Cash and cash equivalents at beginning of period............................................ 21,209 17,568
--------- ---------
Cash and cash equivalents at end of period.................................................. $ 21,230 $ 17,061
--------- ---------
--------- ---------
</TABLE>
See accompanying notes.
-6-
<PAGE>
VEECO INSTRUMENTS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments considered
necessary for a fair presentation (consisting of normal recurring accruals) have
been included. Operating results for the six months ended June 30, 1997, are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1997. For further information, refer to the financial statements
and footnotes thereto included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1996.
Earnings per share is computed using the weighted average number of
common and common equivalent shares outstanding during the period.
NOTE 2--ACQUISITIONS
On April 10, 1997, Veeco Instruments Inc. ("Veeco" or the "Company")
acquired certain assets and personnel of the Media and Magnetics Applications
Division of Materials Research Corporation for cash plus the assumption of
certain liabilities. The acquisition is accounted for using the purchase
method of accounting. Accordingly, a portion of the purchase price is
allocated to the net assets acquired based on their estimated fair values as
determined by an outside appraisal, including $4.2 million allocated to
in-process engineering and development projects. These projects have not
reached technological feasibility and have no alternative future uses and
thus have been expensed as of the date of acquisition.
On July 25, 1997, the Company's wholly-owned subsidiary, Veeco
Acquisition Corp., merged into Wyko Corporation ("Wyko") of Tucson, Arizona,
a leading supplier of optical interferometric measurement systems for the
data storage and semiconductor industries. Under the merger, Wyko
shareholders received 2,863,810 shares of Veeco common stock and holders of
options to acquire Wyko common stock received options to acquire an aggregate
of 136,190 shares of Veeco common stock. The merger is accounted for as a
pooling of interests transaction and, accordingly, historical data in future
reports will be restated to include Wyko data. The following unaudited pro
forma data summarizes the combined results of operations of the Company and
Wyko as though the merger had occurred at the beginning of fiscal year 1994.
Unaudited pro forma
(In thousands, except per share data)
<TABLE>
<CAPTION>
YEARS ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
---------------------------------- --------------------
1996 1995 1994 1997 1996
---------- ----------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net sales.............................................. $ 115,042 $ 85,825 $ 60,031 $ 79,670 $ 54,276
Net income............................................. 10,835 9,237 441 6,080 5,143
Net income per common share............................ 1.22 1.09 0.08 0.66 0.58
</TABLE>
7
<PAGE>
Veeco and Wyko estimate that they will incur direct transaction costs of
approximately $2.8 million associated with the Merger which will be charged
to operations in the quarter ended September 30, 1997.
NOTE 3--INVENTORIES
Interim inventories have been determined by lower of cost (principally
first-in, first-out) or market. Inventories consist of:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
--------- ------------
(IN THOUSANDS)
<S> <C> <C>
Raw materials............................................................................ $ 11,817 $ 9,546
Work-in process.......................................................................... 6,855 4,909
Finished goods........................................................................... 7,781 6,808
--------- ------------
$ 26,453 $ 21,263
--------- ------------
--------- ------------
</TABLE>
NOTE 4--BALANCE SHEET INFORMATION
Selected balance sheet account disclosures follow:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
----------- ---------------
(IN THOUSANDS)
<S> <C> <C>
Allowance for doubtful accounts.......................................................... $ 674 $ 482
Accumulated depreciation and amortization of property, plant and equipment............... 7,013 6,503
Accumulated amortization of excess of cost over net assets acquired...................... 975 910
</TABLE>
NOTE 5--OTHER INFORMATION
Interest paid for the six months ended June 30, 1997 and 1996 was
insignificant. The Company made income tax payments of $1.4 million and $1.7
million for the six months ended June 30, 1997 and 1996, respectively.
NOTE 6--NEW ACCOUNTING PROUNCEMENT
In February 1997, the Financial Accounting Standards Board issued SFAS No.
128, "Earnings Per Share", which is effective for both interim and annual
financial statements for periods ending after December 15, 1997. At that time,
the Company will be required to change the method currently used to compute
earnings per share and to restate all prior periods. Under the new requirements
for calculating primary earnings per share, the dilutive effect of stock options
will be excluded. The impact of adopting SFAS No. 128 on the calculation of
primary and fully diluted earnings per share is not expected to be material.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Three Months Ended June 30, 1997 and 1996
Net sales for 1997 increased by approximately $8.8 million or 35% over the
comparable 1996 period. The increase principally reflects continuing growth in
ion beam system sales. Sales in the U.S. increased approximately 52% while
international sales included an approximately 86% increase in Japan, a 36%
increase in Europe, and a 24% decrease in Asia-Pacific. The Company believes
that there will continue to be quarter to quarter variations in the geographic
concentration of sales.
Sales of process equipment (ion beam/PVD systems) of approximately $22.8
million increased by approximately $8.5 million or 59% over the comparable
period in 1996, driven principally by increased demand from the data storage
industry for high-density hard drives. Of this increase, approximately 10% was
due to growth in volume,with the balance of the increase due to an
approximately 65% higher average selling price of a system resulting from a
shift in customer demand to multi-process modules with increased automation.
Sales of process metrology products for 1997 of approximately $5.9 million
increased by approximately $.4 million or 7% over the comparable 1996 period
principally due to growth in volume. Sales of industrial measurement products
for 1997 of approximately $5.2 million was equivalent to the comparable period
in 1996.
Veeco booked approximately $39.7 million of orders in 1997 compared to
approximately $25.1 million of orders in 1996, reflecting both the increased
demand for high density hard drives and the continued industry transition to the
next generation MR thin film magnetic heads.
Gross profit for 1997 of approximately $15.1 million increased by
approximately $3.9 million over the comparable 1996 period. Gross profit as a
percentage of net sales of 44.5% in 1997 was comparable to the 44.3% achieved in
1996.
Research and development expense in 1997 increased by approximately $1.0
million or 38.0% compared to 1996 as the Company increased its R&D investment in
each product line with particular emphasis in process equipment.
Selling, general and administrative expenses for 1997 increased by
approximately $1.5 million compared to 1996. The increase was primarily due to
approximately $1.0 million of additional selling expense comprised of sales
commissions related to the higher sales volume, as well as increased
compensation and travel expense as a result of the hiring of additional sales
and service personnel to support the Company's continuing growth.
In connection with acquisition of certain assets of the Media and Magnetic
Applications business of Materials Research Corporation in April 1997, the
Company expensed $4.2 million representing the estimated fair values of
in-process engineering and development projects that had not reached
technological feasibility and had no future alternative uses.
Operating income for 1997 decreased to approximately $.6 million compared to
approximately $3.3 million for 1996, principally due to the Company expensing
$4.2 million in 1997 of in-process engineering and development projects.
9
<PAGE>
Income taxes amounted to approximately $.3 million or 38.7% of income before
income taxes for 1997 as compared to $1.3 million or 38.3% of income before
income taxes for the same period in 1996.
RESULTS OF OPERATIONS
Six Months Ended June 30, 1997 and 1996
Net sales for 1997 increased by approximately $17.7 million or 39% over the
comparable 1996 period. The increase principally reflects continuing growth in
ion beam system sales. Sales in the U.S. increased approximately 52% while
international sales included an approximately 5% decrease in Japan, a 62%
increase in Asia-Pacific and flat sales in Europe. The Company believes that
there will continue to be quarter to quarter variations in the geographic
concentration of sales.
Sales of process equipment (ion beam/PVD systems) for 1997 of approximately
$40.7 million increased by approximately $16.7 million or 70% over the
comparable period in 1996, driven principally by increased demand from the data
storage industry for high-density hard drives. Of this increase, approximately
37% was due to growth in volume, with the balance of the increase due to an
approximately 55% higher average selling price of a system resulting from a
shift in customer demand to multi-process modules with increased automation.
Sales of process metrology products for 1997 of approximately $12.6 million
increased by approximately $1.4 million or 12% over the comparable 1996 period
reflecting a 15% increase in stylus profiler sales and an 8% increase of SXM
product sales. Of this increase, approximately 29% was due to growth in volume,
with the balance of the increase due to an approximately 14% higher average
selling price of process metrology products. Sales of industrial measurement
products for 1997 of approximately $10.1 million decreased by approximately
$.4 million or 4% compared to the comparable period in 1996.
Veeco booked approximately $71.1 million of orders in 1997 compared to
approximately $50.5 million of orders in 1996, reflecting both the increased
demand for high density hard drives and the continued industry transition to the
next generation MR thin film magnetic heads.
Gross profit for 1997 of approximately $28.0 million represents an increase
of approximately $7.6 million or 38% over the comparable 1996 period. Gross
profit as a percentage of net sales decreased to 44.1% for 1997 from 44.4% for
1996 principally due to product mix changes offset by an increase in volume.
Research and development expense in the first six months of 1997 increased
by approximately $1.9 million or 42% over the comparable period of 1996 as the
Company increased its R&D investment in each product line.
Selling, general and administrative expenses for 1997 increased by
approximately $2.8 million compared to the first six months of 1996. The
increase was primarily due to approximately $1.7 million of additional selling
expense comprised of sales commissions related to the higher sales volume, as
well as increased compensation and travel expense as a result of the hiring of
additional sales and service personnel to support the Company's continuing
growth.
As previously noted in the results of operations for the three months ended
June 30, 1997 and 1996, in connection with acquisition of certain assets of the
Media Magnetic Applications business of Materials Research Corporation in April
1997, the Company expensed $4.2 million representing the estimated fair values
of in-process engineering and development projects that had not reached
technological feasibility and had no future alternative uses.
10
<PAGE>
Operating income for 1997 decreased to approximately $4.8 million compared
to approximately $5.9 million for the comparable 1996 period, due to the Company
expensing $4.2 million in 1997 of in-process engineering and development
projects partially offset by the above noted factors.
Income taxes for 1997 amounted to approximately $1.9 million or 38.0% of
income before income taxes as compared to $2.4 million or 37.8% of income before
taxes for the same period in 1996.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operations totaled approximately $6.1 million for
the first six months of 1997 compared to $.5 million for the comparable 1996
period. This improvement resulted principally from higher income for 1997
after adding back to net income the $2.6 million net of tax charge for the
write-off of in-process research and engineering projects supplemented by
favorable changes in operating assets and liabilities.
Veeco made capital expenditures of approximately $2.8 million for the six
months ended June 30, 1997, as compared to approximately $1.2 million in the
comparable 1996 period. Capital expenditures in the first six months of 1997
principally reflect investments in building improvements, laboratory tools and
business information systems.
Relative to the acquisition in April 1997 of the Media and Magnetics
Applications business of Materials Research Corporation, Veeco believes that it
will expend approximately $5 million of cash during the last six months of 1997
for capital expenditures and working capital requirements related to this
business. The expected time-frame for developing the acquired technology into
commercially viable products is approximately 12 months from the acquisition
date and it is anticipated that during this time-frame between $2 million and $3
million of expense will be incurred in connection with the technical and
research and development efforts necessary to develop these products.
Relative to the merger with Wyko Corporation in July 1997, Veeco does not
believe there will be a significant impact on its cash balance or future cash
requirements.
The Company believes that existing cash balances together with cash
generated from operations and amounts under the Company's bank credit facility
will be sufficient to meet the Company's projected working capital and other
cash flow requirements for the foreseeable future.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of stockholders of the Company was held on May 15,
1997. Each person nominated for election as a director of the Company was
elected to such position at the meeting by a minimum of 5,505,057 votes. The
other matters voted upon at the meeting were as follows: (a) an amendment to
the Amended and Restated Certificate of Incorporation of Veeco Instruments
Inc. to provide for the classification of the Board of Directors into three
classes with staggered terms; (b) an amendment to the Veeco Instruments Inc.
Amended and Restated 1992 Employees' Stock Option Plan; (c) an amendment to
the Amended and Restated Veeco Instruments Inc. 1994 Stock Option Plan for
Outside Directors; and (d) the appointment of Ernst & Young LLP as auditors
of the Company for the fiscal year ending December 31, 1997. The votes of the
Company's stockholders on these matters were as follows:
BROKER
MATTERS IN FAVOR OPPOSED ABSTAINED NON-VOTE
- ---------- ------------- ------------- --------------- ---------------
(a) 2,943,073 1,922,996 13,751 628,350
(b) 2,941,098 1,842,651 13,626 710,795
(c) 3,648,565 1,141,361 20,476 697,768
(d) 5,496,240 2,020 9,910 --
A special meeting of stockholders of the Company was held on July 25,
1997. Matters voted upon at the meeting were as follows: (a) the proposed
merger of Veeco Acquisition Corp., a newly formed, wholly owned subsidiary of
Veeco, with and into Wyko Corporation pursuant to the Agreement and Plan of
Merger dated April 28, 1997; (b) an amendment to Veeco's Amended and Restated
Certificate of Incorporation, as amended; and (c) an amendment to the Veeco
Instruments Inc. Amended and Restated 1992 Employees' Stock Option Plan, as
amended. The votes of the Company's stockholders on these matters were as
follows:
BROKER
MATTERS IN FAVOR OPPOSED ABSTAINED NON-VOTE
- ---------- ---------- ---------- ----------- ----------
(a) 3,565,620 2,192 9,897 2,414,242
(b) 3,313,444 1,165,171 10,097 1,483,445
(c) 4,320,224 110,406 58,082 1,483,445
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits.
3.1 Amended and Restated Certificate of Incorporation of the
Company, as amended. (1)
10.31 Attachment 2 to the OEM Agreement for Acquisition of IBM
Products between International Business Machines Corporation and
Veeco Instruments Inc. dated as of May 13, 1997 (confidential
treatment has been granted for certain portions; confidential
portions have been filed separately with the Securities and
Exchange Commission). (2)
27 Financial Data Schedule. (1)
(1) Filed herein.
(2) Incorporated by reference from the Registrant's Current
Report on Form 8-K dated July 2, 1997.
12
<PAGE>
b) Reports on Form 8-K.
The Registrant filed a Current Report on Form 8-K on March 13, 1997
reporting that on March 5, 1997, the Registrant entered into a letter of
intent with Wyko Corporation ("Wyko") pursuant to which it was contemplated
that the Registrant would acquire all of the issued and outstanding stock
of Wyko in exchange for the issuance of 3,000,000 shares of common stock,
$.01 par value per share, of the Registrant. The Registrant also reported
that on March 10, 1997, the Registrant issued a press release announcing
that it had entered into a Memorandum of Understanding with MRC Corporation
("MRC") pursuant to which it was contemplated that the Registrant would
acquire certain assets and assume certain liabilities relating to MRC's
Media and Magnetics Application Division in exchange for cash.
The Registrant filed a Current Report on Form 8-K on July 2, 1997
making reference to Attachment 2 to the OEM Agreement for Acquisition of
IBM Products between International Business Machines Corporation and
Veeco for the development, marketing and sales of the SXM 200M (Manual),
filed as an exhibit thereto.
The Registrant filed a Current Report on Form 8-K on August 11, 1997
reporting that on July 25, 1997 it issued a press release announcing that
it had completed a merger with Wyko. Under the merger Wyko shareholders
received 2,863,810 shares of Veeco common stock, and holders of options to
acquire Wyko common stock received options to acquire an aggregate of
136,190 shares of Veeco common stock.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: August 13, 1997
Veeco Instruments Inc.
By: /s/ Edward H. Braun
------------------------------
Edward H. Braun
Chairman, CEO and President
By: /s/ John F. Rein, Jr.
------------------------------
John F. Rein, Jr.
Vice President, Finance
and Chief Financial Officer
14
<PAGE>
Exhibit Index
Exhibits:
3.1 Amended and Restated Certificate of Incorporation of the Company,
as amended. (1)
10.31 Attachment 2 to the OEM Agreement for Acquisition of IBM products
between International Business Machines Corporation and Veeco
Instruments Inc. dated as of May 13, 1997 (Confidential treatment
has been granted for certain portions; confidential portions have
been filed separately with the Securities and Exchange
Commission). (2)
27 Financial Data Schedule. (1)
---------------------------
(1) Filed herein.
(2) Incorporated by reference from the Registrant's Current Report on
Form 8-K dated July 2, 1997.
<PAGE>
Exhibit 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
VEECO INSTRUMENTS INC.
Pursuant to Sections 242 and 245 of the
General Corporation Law of Delaware
1. The name of the corporation is Veeco Instruments Inc., formerly
known as Veeco Instruments Acquisition Corp.
2. The address of the corporation's registered office in Delaware is 32
Loockerman Square, Suite L-100, Dover, Delaware 19901. The Prentice Hall
Corporation is the corporation's registered agent at that address.
3. The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
4. The corporation shall have authority to issue a total of 10,000,000
shares, to be divided into 9,500,000 shares of common stock with par value
$.01 per share and 500,000 shares of preferred stock with par value of $.01
per share.
5. The Board of Directors is authorized, subject to limitations
prescribed by law and the provisions of Article 4, to provide for the
issuance of the shares of Preferred Stock in series, and by filing a
certificate pursuant to the applicable law of the State of Delaware, to
establish from time to time the number of shares to be included in each such
series, and to fix the designation, powers, preferences and rights of the
shares of each such series and the qualifications, limitations or
restrictions thereof.
The authority of the Board with respect to each series shall include,
but not be limited to, determination of the following:
(a) The number of shares constituting that series and the
distinctive designation of that series;
(b) The dividend rate on the shares of that series, whether
dividends shall be cumulative, and, if so, from which date or dates, and
the relative rights of priority, if any, of payment of dividends on
shares of that series;
<PAGE>
(c) Whether that series shall have voting rights, in addition to
the voting rights provided by law, and, if so, the terms of such voting
rights;
(d) Whether that series shall have conversion privileges, and, if
so, the terms and conditions of such conversion, including provision for
adjustment of the conversion rate in such events as the Board of
Directors shall determine;
(e) Whether or not the shares of that series shall be redeemable,
and, if so, the terms and conditions of such redemption, including the
date or dates upon or after which they shall be redeemable, and the
amount per share payable in case of redemption, which amount may vary
under different conditions and at different redemption dates;
(f) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if so, the
terms and amount of such sinking fund;
(g) The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding up of the
corporation, and the relative rights of priority, if any, of payment of
shares of that series;
(h) Any other relative rights, preferences and limitations of that
series.
Dividends on outstanding shares of Preferred Stock shall be paid or
declared and set apart for payment before any dividends shall be paid or
declared and set apart for payment on the common shares with respect to the
same dividend period.
If upon any voluntary or involuntary liquidation, dissolution or winding
up of the corporation, the assets available for distribution to holders of
shares of Preferred Stock of all series shall be insufficient to pay such
holders the full preferential amount to which they are entitled, then such
assets shall be distributed ratably among the shares of all series of
Preferred Stock in accordance with the respective preferential amounts
(including unpaid cumulative dividends, if any) payable with respect thereto.
6. The original Certificate of Incorporation was filed with the
Secretary of State of Delaware on August 8, 1989.
7. The Board of Directors shall have the power to make, alter or repeal
the by-laws of the corporation.
8. The election of the Board of Directors need not be by written ballot.
<PAGE>
9. The corporation shall indemnify to the fullest extent permitted by
Section 145 of the General Corporation Law of Delaware as amended from time
to time each person that such Section grants the corporation the power to
indemnify.
10. No director shall be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director
for any act or omission occurring subsequent to the date when this provision
becomes effective, except that he may be liable (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under Section 174 of the Delaware
General Corporation Law or (iv) for any transaction from which the director
derived an improper personal benefit.
11. No action required or permitted to be taken at any meeting of
stockholders may be taken by written consent without a meeting.
12. Special meetings of the stockholders may be called by resolution of
the Board of Directors or by the president and shall be called by the
president or secretary upon the written request (stating the purpose or
purposes of the meeting) of a majority of the directors then in office or of
the holders of 50% of the outstanding shares entitled to vote. Only business
related to the purposes set forth in the notice of the meeting may be
transacted at a special meeting.
13. The foregoing amendment and restatement was duly adopted in
accordance with the provisions of Sections 242 and 245 of the General
Corporation Law of Delaware.
Dated: December 1, 1994
-----------
VEECO INSTRUMENTS INC.
By /s/ Walter Scherr
---------------------------
Walter Scherr
Executive Vice-President
Attest:
/s/ John F. Rein, Jr.
- ------------------------
John F. Rein, Jr.
Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
VEECO INSTRUMENTS INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called "corporation") is
Veeco Instruments Inc.
2. The amended and restated certificate of incorporation of the
corporation is hereby amended as follows:
(a) by inserting a new paragraph 9 which reads as follows:
"9. Subject to the rights of the holders of any series of
Preferred Stock to elect additional directors under specified
circumstances, the directors shall be divided into three (3)
classes designated as Class I, Class II and Class III,
respectively, as nearly equal in size as possible. Directors
shall be assigned to each class in accordance with a resolution
or resolutions adopted by the Board of Directors. At the first
annual meeting following the 1997 Annual Meeting of
Stockholders, the term of office of the Class I directors shall
expire and Class I directors shall be elected for a full term
of three (3) years. At the second annual meeting of
stockholders following the 1997 Annual Meeting of
Stockholders, the term of office of the Class II directors shall
expire and Class II directors shall be elected for a full term
of three (3) years. At the third annual meeting of stockholders
following the 1997 Annual Meeting of Stockholders, the term of
office of the Class III directors shall expire and Class III
directors shall be elected for a full term of three (3) years.
At each succeeding annual meeting of stockholders, directors
shall be elected for a full term of three (3) years to succeed
the directors of the class whose terms expire at such annual
meeting. Each director shall serve until his successor is duly
elected and qualified or until his death, resignation or
removal. No decrease in the number of directors constituting
the Board of Directors shall shorten the term of any incumbent
director."
and
(b) by renumbering the existing paragraphs 9 through 13 to
paragraphs 10 through 14, respectively.
<PAGE>
3. The amendments of the amended and restated certificate of
incorporation of the corporation herein certified have been duly adopted in
accordance with the provisions of Section 242 of the General Corporation Law
of the State of Delaware.
Dated: May 29, 1997
VEECO INSTRUMENTS INC.
By: /s/ John F. Rein, Jr.
------------------------
John F. Rein, Jr.
Vice President-Finance
2
<PAGE>
CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
VEECO INSTRUMENTS INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called "corporation") is
Veeco Instruments Inc.
2. Article 4 of the amended and restated certificate of incorporation
of the corporation, as amended to date (hereinafter called the "Certificate
of Incorporation"), is hereby amended to read in its entirety as follows:
"4. The corporation shall have authority to issue a total
of 25,500,000 shares, to be divided into 25,000,000 shares of common
stock with par value of $.01 per share and 500,000 shares of
preferred stock with par value of $.01 per share."
3. The amendment of the Certificate of Incorporation herein certified
has been duly adopted in accordance with the provisions of Section 242 of the
General Corporation Law of the State of Delaware.
Dated: July 25, 1997
VEECO INSTRUMENTS INC.
By: /s/ John F. Rein, Jr.
--------------------------
John F. Rein, Jr.
Vice President-Finance
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 1997 AND FOR THE SIX
MONTHS ENDED JUNE 30, 1997 WHICH ARE CONTAINED IN FORM 10-Q FOR THE QUARTER
ENDED JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 21,230
<SECURITIES> 0
<RECEIVABLES> 24,071
<ALLOWANCES> 674
<INVENTORY> 26,453
<CURRENT-ASSETS> 76,010
<PP&E> 19,660
<DEPRECIATION> 7,013
<TOTAL-ASSETS> 95,806
<CURRENT-LIABILITIES> 32,045
<BONDS> 0
0
0
<COMMON> 60
<OTHER-SE> 63,030
<TOTAL-LIABILITY-AND-EQUITY> 95,806
<SALES> 63,418
<TOTAL-REVENUES> 63,418
<CGS> 35,440
<TOTAL-COSTS> 23,284
<OTHER-EXPENSES> (69)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (210)
<INCOME-PRETAX> 4,973
<INCOME-TAX> 1,890
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,083
<EPS-PRIMARY> .50
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