Veeco's revenues slide as restructuring hits home
revenues drop 13 per cent to $97.7m (€68.7m) and plans to make 100
staff redundant as part of a restructuring drive.
The US manufacturer metrology and nanoscale production and measurement instruments reported a third-quarter $5.7m loss from revenues of $97.7m. This compares with a profit of $4.5m from revenues of $112m for the same period last year.
While the company said its revenues were 'in-line' with expectations, Veeco's CEO John Peeler said the company was in the "first phase of a multi-quarter turn-around plan to improve Veeco's profitability."
This turn-around plan involves a plan to reduce in staffing levels that will see approximately 100 employees, consultants and temporary workers let go as well as a 'realignment' of the company's sales organisation to more closely match both regional and market trends.
The company has struggled in the data storage and semiconductor markets that together make up over one third of its business with "orders down 15 per cent and 22 per cent sequentially, respectively," said Peeler.
However, the company's Scientific Research Instrumentation business that accounted for 26 per cent of third quarter revenues ($25.4m) appears to be bucking that trend.
According to Peeler, Veeco's scientific research instrument orders increased significantly, up 17 per cent form the previous month and 26 per cent from the same period last year.
The company's HB-LED/wireless business saw "very strong activity" with orders up 26 per cent from the previous quarter and 49 per cent from the Q3 2006.
In addition, to the 'realignment' Peeler plans to downsize and consolidate the company's corporate headquarters as well as strengthening its leadership team to aid in the development of strategies that will accelerate the company's growth.
The company expects that its full year revenue will drop 10 per cent from last year's levels with revenue dropping to between $400m and $408m. However, Peeler expects the data storage and semiconductor markets to stabilise and the growth in the HB-LED markets to continue to enable the company to finish the year with an improved outlook for 2008 and a backlog of $180m of orders.
"We also anticipate strength in the scientific research / industrial market to continue as we are experiencing strong customer acceptance of several new instrumentation products, including our Innova SPM and Dektak 150 Optical Profilers," said Peeler.
