Veeco Instruments (VECO) swung to a net profit for the quarter ended Mar. 31, 2017. The company has made a net profit of $1.10 million, or $ 0.03 a share in the quarter, against a net loss of $15.53 million, or $0.40 a share in the last year period. On an adjusted basis, net profit for the quarter stood at $3.64 million, or $0.09 a share compared with a net loss of $5.73 million, or $0.15 a share in the last year period.
Revenue during the quarter grew 20.99 percent to $94.39 million from $78.01 million in the previous year period. Gross margin for the quarter contracted 473 basis points over the previous year period to 36.23 percent. Operating margin for the quarter stood at negative 6.19 percent as compared to a negative 19.58 percent for the previous year period.
Operating loss for the quarter was $5.84 million, compared with an operating loss of $15.27 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $7.30 million compared to negative $2.13 million in the prior year second quarter. At the same time, adjusted EBITDA margin stood at 7.74 percent for the quarter compared to negative 2.73 percent in the last year period.
"Veeco's first quarter sales were above seasonal average and increased by more than 20% year-over-year, reflecting a recovery in LED industry conditions. We are continuing to build backlog and see a healthy sales pipeline, which supports top line growth in the second half of 2017. Our Q1 gross margin reflects, among other factors, the temporary impact of our manufacturing consolidation efforts. We now expect to complete these plans in the third quarter. We believe our consolidation efforts combined with sustained cost discipline will drive positive operating leverage, as revenues scale," commented John R. Peeler, chairman and chief executive officer.
For the second-quarter 2017, Veeco Instruments forecasts revenue to be in the range of $85 million to $100 million. The company expects diluted loss per share to be in the range of negative $0.14 to $0.02. On an adjusted basis, the company expects diluted loss per share to be in the range of negative $0.05 to $0.09.
Working capital increases sharply
Veeco Instruments has recorded an increase in the working capital over the last year. It stood at $689.64 million as at Mar. 31, 2017, up 91.35 percent or $329.22 million from $360.41 million on Mar. 31, 2016. Current ratio was at 6.19 as on Mar. 31, 2017, up from 3.29 on Mar. 31, 2016.
Cash conversion cycle (CCC) has decreased to 51 days for the quarter from 154 days for the last year period. Days sales outstanding went down to 48 days for the quarter compared with 62 days for the same period last year.
Days inventory outstanding has decreased to 48 days for the quarter compared with 153 days for the previous year period. At the same time, days payable outstanding went down to 45 days for the quarter from 60 for the same period last year.
Debt increases substantially
Veeco Instruments has witnessed an increase in total debt over the last one year. It stood at $268.47 million as on Mar. 31, 2017, up 18,402.62 percent or $267.02 million from $1.45 million on Mar. 31, 2016. Total debt was 24.82 percent of total assets as on Mar. 31, 2017, compared with 0.17 percent on Mar. 31, 2016.
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