Veeco Instruments-Who? Message Board

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Technology Stocks : Veeco Instruments-Who?

VECO 29.15

-0.6%

Oct 30 3:59 PM EDT

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To: Sam who wrote (3000)	8/17/2010 12:24:02 AM
From: Sam	of 3069

ML likes the deal. Sale of metrology business a positive VECO this morning announced a sale of their metrology business to Bruker Corporation for $229M in cash or $160M net of all taxes and fees (adding ~$3.60 cash/share) and is expected to close in 4Q10. We view this as a positive since this re-focuses VECO as a deposition company geared towards the high growth LED (light emitting diode) segment and saves about $40M in operating expenses annually. We expect the company to remain in the no-growth cyclical data storage business due to the synergies (both technological and personnel) associated with the LED product platform. We don’t expect significant incremental op-ex to be allocated to the data storage segment. The metrology business was more transactional with high associated SG&A costs due to the diverse nature of the products and customer base. While in theory the metrology products had higher gross margin (almost 50%), their operating margins (~10%) were below the company average. Updated guidance for 3Q. Model under review VECO now expects September (3Q10) revenues to be $255-$280M (prior guidance was $290-$315M) with GAAP EPS of $1.45-$1.72 (previously was $1.55-$1.82). We are currently reviewing our model.

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