Veeco announces cost reduction initiatives, sees Q3 EPS impact of $1.44-$1.59
Veeco announced additional cost reduction initiatives with the decision to significantly reduce future investments in its Atomic Layer Deposition, or ALD, technology development. This action reflects the company's ongoing focus to balance technology investments with the potential for associated revenue realization. ALD cost reduction activities are expected to be complete by year end 2016 and are in addition to the previously announced restructuring plans, which targeted $20M in annualized savings. In total, these initiatives are expected to generate $30M in annualized savings. "While we have continued to make progress with our ALD technology development for advanced semiconductor applications, the expected timing for revenue realization has been delayed," said John Peeler, chairman and CEO. "Consequently, we have made the difficult decision to lower investments in our ALD program. We plan to retain the intellectual property and technology capabilities and continue to assess future market opportunities." In Q3, the company expects to record total asset impairment and restructuring charges of between $56M-$62M, or $1.44-$1.59 on a per share basis. Of these charges, the vast majority are non-cash relating to an intangible ALD asset impairment, while approximately $2M are cash restructuring charges.