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Technology Stocks : Veeco Instruments-Who? -- Ignore unavailable to you. Want to Upgrade?

To: All Mtn Ski who wrote (2340)	7/30/1999 3:26:00 PM
From: All Mtn Ski	Respond to of 3069

VEECO NEWS: Veeco Signs Letter of Intent to Acquire OptiMag Inc. PLAINVIEW, N.Y.--(BUSINESS WIRE)--July 30, 1999--Veeco Instruments Inc. (Nasdaq: VECO - news) today announced that it has signed a letter of intent to acquire OptiMag Inc., of San Diego, CA. OptiMag, a development stage company founded in 1998, is a supplier of automated optical defect inspection and process control equipment for the data storage thin film magnetic head industry. The intended acquisition is subject to a number of conditions including completion of a definitive purchase agreement, final approval by the Board of Directors of Veeco and OptiMag and receipt of any necessary governmental consent. Edward H. Braun, Chairman, President and CEO of Veeco, commented, ''OptiMag provides an important addition to our in-line metrology product offering for Veeco's worldwide data storage customers, which includes atomic force microscopes, optical interferometers and stylus profilers. OptiMag's high throughput optical inspection equipment detects and classifies visual defects in magnetoresistive (MR) and giant magnetoresistive (GMR) thin film heads at slider level to resolutions of .175u. Initial installations have been completed at Seagate, IBM and Fujitsu.'' David T. Cornaby, OptiMag's President and CEO, stated, ''This partnership with Veeco will be integral to a successful product launch for OptiMag, as it provides us the ability to leverage their market presence and customer base of the leading worldwide data storage companies. In addition, Veeco's critical mass, worldwide service organization and customer support will be an enormous benefit to our company.'' The OptiMag Automated Slider Inspection System (OASIS(TM)) is a precision automated slider defect inspection station for high throughput production. It can also be used in research and development where high resolution imaging or large statistical sample sizes are desired. The system acquires slider images (nano, pico, or femto), using a 4 megapixel digital camera, and the user can define the desired combination of inspection views of the air bearing surface and the pole tip. The system is supplied with flexible software to meet the differing specifications of volume head manufacturers. OASIS(TM) technology is extendable to meet the inspection needs of other precision applications such as printer heads and biotechnology. Veeco Instruments Inc., headquartered in Plainview, New York is a worldwide leader in Metrology tools for the data storage and semiconductor industries, and Process Equipment etch and deposition tools for the data storage industry. Manufacturing and engineering facilities are located in New York, California and Arizona. Global sales and service offices are located throughout the United States, Europe, Japan and Asia Pacific. biz.yahoo.com

To: All Mtn Ski who wrote (2340)	7/31/1999 5:26:00 PM
From: A. Edwards	Read Replies (1) \| Respond to of 3069

Lowering Veeco's Estimates in 1999/2000: Salomon Smith Barney July 30, 1999 After the close on Wednesday, Veeco announced an inline 2Q99 in terms of earnings per share ($0.35), but lower than expected sales and orders. While sales were $3 million below expectations, better gross margins (48.8% vs. our 47.0% est.) allowed the company to meet our $0.35 estimate. Sales declined 1% sequentially to $55 million, below our estimate of $58 million. Process equipment drove sales, increasing 30% sequentially to $25 million, while metrology sales declined 18% to $26 million. Sales to Veeco's top 3 customers (IBM, Seagate, and Read-Rite) improved and 7 of the top 10 customers were in Asia-Pacific, which indicates increased penetration outside of the U.S. By region, sales were US - 44%, Europe - 18%, Japan - 17%, Asia/Pacific - 19%, and ROW - 2%. As usual, revenues from data storage accounted for the majority of revenues (61%), followed by research & industrial at 29%, and semiconductors at 10%. Orders of $54 Million Were A Negative Surprise We had concerns of the order front and Veeco's orders declined from $65 million in 1Q99 to $54 million, well below our estimate of $60-$65 million. By segment, orders were broken out between process equipment ($25 million), metrology ($25 million), and industrial measurement ($4 million). The decline in bookings was primarily attributable to a decline in etch bookings from $23 million in 1Q99 to $9 million in 2Q99. The spike in etch bookings during 1Q99 was an anomaly and due to 2 US customers who purchased $15 million in reactive ion pole tip trimming systems. This activity ceased in 2Q99 and we expect $8-$9 million will be the "normal" level of bookings. We expect etch to remain flat in 3Q99, with growth being driven by deposition and AFMs. Lowering Estimates in 1999/2000 Due to low visibility and a lower level of orders, we are lowering our EPS estimate to $1.40 from $1.50 in 1999 and reducing 2000 to $1.82 from $2.01. We are lowering our sales estimate in 1999 to $229 million from $242 million and increasing our operating expense estimate slightly to 32.7% from 32.2%. We look for sales of $58 million (vs. $62 million previously) in 3Q99 and EPS of $0.36 (vs. $0.39 previously). For 4Q99, we are modeling sales of $60 million versus $66 million previously and EPS of $0.37 versus $0.43 previously. In 2000, we are reducing our sales estimate to $275 million from $289 million, lowering gross margins by 30 basis points to 48.4%, and keeping our operating expense estimate of 31.4% unchanged. We reiterate our 2H (Outperform, High Risk) rating as we believe the stock represent a good risk/reward but stress that patience is required. Until there are positive signs emanating from the disk drive/head sector, we believe Veeco's shares will remain in the current high 20's to low 30's trading range. We are lowering our price target to $41, or 2.5x our 2000 sales per share estimate of $16.5, from $70, or 4x our previous calendar 2000 sales per share estimate of $17.4.