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Note 1—Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of Veeco Instruments Inc. (together with its consolidated subsidiaries, “Veeco”, the “Company”, “we”, “us”, and “our”, unless the context indicates otherwise) have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation (consisting of normal recurring accruals) have been included. Operating results for the three months ended March 31, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. For further information, refer to the consolidated financial statements and footnotes thereto included in our annual report on Form 10-K for the year ended December 31, 2012.
Consistent with prior years, we report interim quarters, other than fourth quarters which always end on December 31, on a 13-week basis ending on the last Sunday of each period. The interim quarter ends are determined at the beginning of each year based on the 13-week quarters. The 2013 interim quarter ends are March 31, June 30 and September 29. The 2012 interim quarter ends were April 1, July 1 and September 30. For ease of reference, we report these interim quarter ends as March 31, June 30 and September 30 in our interim condensed consolidated financial statements. We have reclassified certain amounts previously reported in our financial statements to conform to the current presentation, including amounts related to discontinued operations.
Accounting Review
During 2012, the Company commenced an internal investigation in response to information it received concerning certain issues, including contract documentation issues, related to a limited number of customer transactions in South Korea. During the review of information in connection with the internal investigation, questions were raised that prompted the Company to conduct a comprehensive and extensive review of its revenue recognition accounting for certain multiple element arrangements. The Company retained experienced counsel, assisted by an experienced outside accounting consulting firm, to oversee the accounting review undertaken by the Company. The Company completed that review in October 2013.
The delay in filing our periodic reports began with an announcement, on November 15, 2012, regarding our accounting review of our application of accounting principles related to the Company’s sales of multiple element arrangements of Metal Organic Chemical Vapor Deposition (“MOCVD”) systems in certain transactions originating in 2009 and 2010. We conducted examinations of our MOCVD transactions to determine whether the revenue and related expenses were recognized in the appropriate accounting period. Subsequently, we expanded our accounting review to other relevant transactions of similar multiple element arrangements arising since 2009. In the course of our accounting review, we have examined more than 100 multiple element arrangements.
The primary focus of the Company’s accounting review concerned whether the Company correctly interpreted and applied generally accepted accounting principles relating to revenue recognition for multiple element arrangements as set forth in Securities and Exchange Commission Staff Accounting Bulletin No. 104: Revenue Recognition, and ASC 605-25 - Revenue Recognition: Multiple Element Arrangements (formerly known as EITF 00-21 and EITF 08-01), to certain sales of Veeco products.
We often enter into large orders with our customers consisting of several elements. For accounting purposes, these are called multiple element arrangements, and can include systems, upgrades, spare parts, services, as well as certain other items. Our accounting review examined the selected sales transactions to determine whether the Company appropriately: (1) identified all of the elements in its arrangements with customers; (2) determined the proper units of accounting as part of the arrangements; and (3) allocated the arrangements’ consideration to each of the units of accounting under the applicable accounting standards. As a result of our accounting review we identified errors in the consolidated financial statements related to prior periods. The errors were primarily attributable to the misapplication of U.S. GAAP for recognizing revenue and related costs under multiple element arrangements and accounting for warranties. We assessed the materiality of these errors, both quantitatively and qualitatively, and concluded that these errors were not material, individually or in the aggregate, to our consolidated financial statements in 2012 or any other prior periods.
Notwithstanding the material weaknesses discussed in “Part I. Item 4. Controls and Procedures” and based upon the accounting review discussed above, our management has concluded that our consolidated financial statements are fairly stated in all material respects in accordance with U.S. GAAP for interim financial statements.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by management include: the best estimate of selling price for our products and services; allowance for doubtful accounts; inventory valuation; recoverability and useful lives of property, plant and equipment and identifiable intangible assets; investment valuations; fair value of derivatives; recoverability of goodwill and long lived assets; recoverability of deferred tax assets; liabilities for product warranty; accruals for contingencies; equity-based payments, including forfeitures and performance based vesting; and liabilities for tax uncertainties. Actual results could differ from those estimates.
(Loss) Income Per Common Share
The following table sets forth the reconciliation of basic weighted average shares outstanding and diluted weighted average shares outstanding (in thousands):
|
|
Three months ended |
| ||
|
|
March 31, |
| ||
|
|
2013 |
|
2012 |
|
Basic weighted average shares outstanding |
|
38,716 |
|
38,261 |
|
Dilutive effect of stock options and restricted stock |
|
— |
|
602 |
|
Diluted weighted average shares outstanding |
|
38,716 |
|
38,863 |
|
Basic (loss) income per common share is computed using the weighted average number of common shares outstanding during the period. Diluted (loss) income per common share is computed using the weighted average number of common shares and common equivalent shares outstanding during the period. Potentially dilutive securities attributable to outstanding stock options and restricted stock were approximately 1.4 million and 1.2 million common equivalent shares during the three months ended March 31, 2013 and 2012. Approximately 0.5 million common equivalent shares were excluded from the calculation of diluted net loss per share during the three months ended March 31, 2013, because their effect on loss per share was anti-dilutive due to the net loss sustained during the period.
Revenue Recognition
We recognize revenue when all of the following criteria have been met: persuasive evidence of an arrangement exists with a customer; delivery of the specified products has occurred or services have been rendered; prices are contractually fixed or determinable; and collectability is reasonably assured. Revenue is recorded including shipping and handling costs and excluding applicable taxes related to sales. A significant portion of our revenue is derived from contractual arrangements with customers that have multiple elements, such as systems, upgrades, components, spare parts, maintenance and service plans. For sales arrangements that contain multiple elements, we split the arrangement into separate units of accounting if the individually delivered elements have value to the customer on a standalone basis. We also evaluate whether multiple transactions with the same customer or related party should be considered part of a multiple element arrangement, whereby we assess, among other factors, whether the contracts or agreements are negotiated or executed within a short time frame of each other or if there are indicators that the contracts are negotiated in contemplation of each other. When we have separate units of accounting, we allocate revenue to each element based on the following selling price hierarchy: vendor-specific objective evidence (“VSOE”) if available; third party evidence (“TPE”) if VSOE is not available; or our best estimate of selling price (“BESP”) if neither VSOE nor TPE is available. For the majority of the elements in our arrangements we utilize BESP. The accounting guidance for selling price hierarchy did not include BESP for arrangements entered into prior to January 1, 2011, and as such we recognized revenue for those arrangements as described below.
We consider many facts when evaluating each of our sales arrangements to determine the timing of revenue recognition, including the contractual obligations, the customer’s creditworthiness and the nature of the customer’s post-delivery acceptance provisions. Our system sales arrangements, including certain upgrades, generally include field acceptance provisions that may include functional or mechanical test procedures. For the majority of our arrangements, a customer source inspection of the system is performed in our facility or test data is sent to the customer documenting that the system is functioning to the agreed upon specifications prior to delivery. Historically, such source inspection or test data replicates the field acceptance provisions that will be performed at the customer’s site prior to final acceptance of the system. As such, we objectively demonstrate that the criteria specified in the contractual acceptance provisions are achieved prior to delivery and, therefore, we recognize revenue upon delivery since there is no substantive contingency remaining related to the acceptance provisions as of that date, subject to the retention amount constraint described below. For new products, new applications of existing products or for products with substantive customer acceptance provisions where we cannot objectively demonstrate that the criteria specified in the contractual acceptance provisions have been achieved prior to delivery, revenue and the associated costs are deferred and fully recognized upon the receipt of final customer acceptance, assuming all other revenue recognition criteria have been met.
Our system sales arrangements, including certain upgrades, generally do not contain provisions for right of return or forfeiture, refund, or other purchase price concessions. In the rare instances where such provisions are included, we defer all revenue until such rights expire. In many cases our products are sold with a billing retention, typically 10% of the sales price (the “retention amount”), which is typically payable by the customer when field acceptance provisions are completed. The amount of revenue recognized upon delivery of a system or upgrade is limited to the lower of i) the amount that is not contingent upon acceptance provisions or ii) the value allocated to the delivered elements, if such sale is part of a multiple-element arrangement.
For transactions entered into prior to January 1, 2011, under the accounting rules for multiple-element arrangements in place at that time, we deferred the greater of the retention amount or the relative fair value of the undelivered elements based on VSOE. When we could not establish VSOE or TPE for all undelivered elements of an arrangement, revenue on the entire arrangement was deferred until the earlier of the point when we did have VSOE for all undelivered elements or the delivery of all elements of the arrangement.
Our sales arrangements, including certain upgrades, generally include installation. The installation process is not deemed essential to the functionality of the equipment since it is not complex; that is, it does not require significant changes to the features or capabilities of the equipment or involve building elaborate interfaces or connections subsequent to factory acceptance. We have a demonstrated history of consistently completing installations in a timely manner and can reliably estimate the costs of such activities. Most customers engage us to perform the installation services, although there are other third-party providers with sufficient knowledge who could complete these services. Based on these factors, we deem the installation of our systems to be inconsequential and perfunctory relative to the system as a whole, and as a result, do not consider such services to be a separate element of the arrangement. As such, we accrue the cost of the installation at the time of revenue recognition for the system.
In Japan, where our contractual terms with customers generally specify title and risk and rewards of ownership transfer upon customer acceptance, revenue is recognized and the customer is billed upon the receipt of written customer acceptance.
Revenue related to maintenance and service contracts is recognized ratably over the applicable contract term. Component and spare part revenue are recognized at the time of delivery in accordance with the terms of the applicable sales arrangement.
|
Note 2—Discontinued Operations
We recorded a $0.1 million loss from discontinued operations with no sales recorded for the three months ended March 31, 2012.
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Note 3—Balance Sheet Information
Cash and Cash Equivalents
Cash and cash equivalents include cash and certain highly liquid investments. Highly liquid investments with maturities of three months or less when purchased may be classified as cash equivalents. Such items may include liquid money market accounts, treasury bills, government agency securities and corporate debt. The investments that are classified as cash equivalents are carried at cost, which approximates fair value.
Short-Term Investments
Available-for-sale securities consist of the following (in thousands):
|
|
March 31, 2013 |
| ||||||||||
|
|
Amortized |
|
Gains in |
|
Losses in |
|
Estimated |
| ||||
Treasury bills |
|
$ |
271,168 |
|
$ |
33 |
|
$ |
— |
|
$ |
271,201 |
|
Government agency securities |
|
8,055 |
|
— |
|
— |
|
8,055 |
| ||||
Corporate bonds |
|
63,488 |
|
38 |
|
(27 |
) |
63,499 |
| ||||
Commercial paper |
|
19,992 |
|
— |
|
— |
|
19,992 |
| ||||
Total available-for-sale securities |
|
$ |
362,703 |
|
$ |
71 |
|
$ |
(27 |
) |
$ |
362,747 |
|
|
|
December 31, 2012 |
| ||||||||||
|
|
Amortized |
|
Gains in |
|
Losses in |
|
Estimated |
| ||||
Treasury bills |
|
$ |
184,102 |
|
$ |
76 |
|
$ |
— |
|
$ |
184,178 |
|
Government agency securities |
|
8,056 |
|
— |
|
— |
|
8,056 |
| ||||
Total available-for-sale securities |
|
$ |
192,158 |
|
$ |
76 |
|
$ |
— |
|
$ |
192,234 |
|
During the three months ended March 31, 2013 and 2012, available-for-sale securities were liquidated for total proceeds of $101.2 million and $43.6 million, respectively. The gross realized gains and losses on these sales were $0.1 million for the three months ended March 31, 2013 and minimal gross realized gains for the three months ended March 31, 2012. The cost of securities sold is based on specific identification.
The table below shows the fair value of short-term investments that have been in an unrealized loss position for less than 12 months as of March 31, 2013 (in thousands):
|
|
Estimated |
|
Unrealized |
| ||
Corporate bonds |
|
$ |
28,491 |
|
$ |
(27 |
) |
Total |
|
$ |
28,491 |
|
$ |
(27 |
) |
We did not hold any short-term investments that have been in an unrealized loss position for 12 months or longer for the period noted in the preceding table.
The Company regularly reviews its investment portfolio to identify and evaluate investments that have indications of possible impairment. Factors considered in determining whether an unrealized loss was considered to be temporary or other-than-temporary and therefore impaired include: the length of time and extent to which fair value has been lower than the cost basis; the financial condition and near-term prospects of the investee; and whether it is more likely than not that the Company will be required to sell the security prior to recovery. The Company believes the gross unrealized losses on the Company’s short-term investments as of March 31, 2013 were temporary in nature and therefore did not recognize any impairment. As of December 31, 2012 we did not hold any short-term investments that were in a loss position.
Contractual maturities of available-for-sale securities are as follows (in thousands):
|
|
March 31, 2013 |
| |
|
|
Estimated Fair Value |
| |
Due in one year or less |
|
$ |
288,752 |
|
Due in 1—2 years |
|
32,811 |
| |
Due in 2—3 years |
|
41,184 |
| |
Total available-for-sale securities |
|
$ |
362,747 |
|
Actual maturities may differ from contractual maturities because some borrowers have the right to call or prepay obligations with or without call or prepayment penalties.
Restricted Cash
As of March 31, 2013 and December 31, 2012, restricted cash consisted of $2.1 million and $2.0 million, respectively, which serves as collateral for bank guarantees that provide financial assurance that the Company will fulfill certain customer obligations. This cash is held in custody by the issuing bank and is restricted as to withdrawal or use while the related bank guarantees are outstanding.
Accounts Receivable, Net
Accounts receivable are shown net of the allowance for doubtful accounts of $0.5 million as of March 31, 2013 and December 31, 2012.
Inventories
Inventories are stated at the lower of cost (principally first-in, first-out) or market. Inventories consist of (in thousands):
|
|
March 31, |
|
December 31, |
| ||
|
|
2013 |
|
2012 |
| ||
Materials |
|
$ |
44,219 |
|
$ |
36,523 |
|
Work in process |
|
17,248 |
|
13,363 |
| ||
Finished goods |
|
6,222 |
|
9,921 |
| ||
|
|
$ |
67,689 |
|
$ |
59,807 |
|
Cost Method Investment
As of March 31, 2013 and December 31, 2012 we have recorded a total investment of $14.5 million in a rapidly developing organic light emitting diode (“OLED”) equipment company (the “Investment”). Our ownership in the Investment is approximately 15.3% of the preferred shares and a 12.0% interest in the total company. Since we do not exert significant influence on the Investment, this investment is treated under the cost method in accordance with applicable accounting guidance. The fair value of this investment is not estimated because there are no identified events or changes in circumstances that may indicate an other-than-temporary decline in the fair value of the investment and we are exempt from estimating interim fair values because the investment does not meet the definition of a publicly traded company. This investment is recorded in other assets in our Condensed Consolidated Balance Sheets. Subsequently, during the second and third quarters of 2013, we invested an additional $0.8 million in the Investment each quarter.
Customer Deposits
As of March 31, 2013 and December 31, 2012, we had customer deposits of $38.4 million and $32.7 million, respectively, which are recorded as a component of accrued expenses and other current liabilities.
Accrued Warranty
We estimate the costs that may be incurred under the warranties we provide and record a liability in the amount of such costs at the time the related revenue is recognized. Factors that affect our warranty liability include product failure rates, material usage and labor costs incurred in correcting product failures during the warranty period. This accrual is recorded in accrued expense and other current liabilities in our Condensed Consolidated Balance Sheets. We periodically assess the adequacy of our recognized warranty liability and adjust the amount as necessary. Changes in our warranty liability during the period are as follows (in thousands):
|
|
Three months ended |
| ||||
|
|
March 31, |
| ||||
|
|
2013 |
|
2012 |
| ||
Balance as of the beginning of period |
|
$ |
4,942 |
|
$ |
8,731 |
|
Warranties issued during the period |
|
478 |
|
696 |
| ||
Settlements made during the period |
|
(1,341 |
) |
(1,840 |
) | ||
Changes in estimate during the period |
|
— |
|
327 |
| ||
Balance as of the end of period |
|
$ |
4,079 |
|
$ |
7,914 |
|
In the current year’s presentation we no longer include installation in the accrued warranty balance; therefore, in order to conform the balance to current year presentation, we have reclassified $1.047 million from the beginning balance of 2012 accrued warranty to accrued installation which, along with accrued warranty, is also a component of Accrued expenses and other current liabilities.
Mortgage Payable
We have a mortgage payable with approximately $2.3 million outstanding as of March 31, 2013 and $2.4 million outstanding as of December 31, 2012. The mortgage accrues interest at an annual rate of 7.91%, and the final payment is due on January 1, 2020. The fair value of the mortgage as of March 31, 2013 was approximately $2.5 million and $2.6 million as of December 31, 2012.
Accumulated Other Comprehensive Income
The components of accumulated other comprehensive income are (in thousands):
As of March 31, 2013 |
|
Gross |
|
Taxes |
|
Net |
| |||
Translation adjustments |
|
$ |
6,290 |
|
$ |
(352 |
) |
$ |
5,938 |
|
Minimum pension liability |
|
(1,285 |
) |
510 |
|
(775 |
) | |||
Unrealized gain on available-for-sale securities |
|
44 |
|
(13 |
) |
31 |
| |||
Accumulated other comprehensive income |
|
$ |
5,049 |
|
$ |
145 |
|
$ |
5,194 |
|
As of December 31, 2012 |
|
Gross |
|
Taxes |
|
Net |
| |||
Translation adjustments |
|
$ |
7,040 |
|
$ |
(339 |
) |
$ |
6,701 |
|
Minimum pension liability |
|
(1,285 |
) |
510 |
|
(775 |
) | |||
Unrealized gain on available-for-sale securities |
|
76 |
|
(29 |
) |
47 |
| |||
Accumulated other comprehensive income |
|
$ |
5,831 |
|
$ |
142 |
|
$ |
5,973 |
|
|
Note 4—Segment Information
We manage the business, review operating results and assess performance, as well as allocate resources, based upon four reporting units that are aggregated into two segments: the VIBE and Mechanical reporting units which are reported in our Data Storage segment; and the MOCVD and molecular beam epitaxy (“MBE”) reporting units which are reported in our Light Emitting Diode (“LED”) and Solar segment. In identifying the reporting units, management considered the economic characteristics of operating segments including the products and services provided, production processes, types or classes of customer and product distribution. Our LED & Solar segment consists of MOCVD systems, MBE systems and thermal deposition sources. These systems are primarily sold to customers in the LED, wireless devices and solar industries, as well as to scientific research customers. This segment has manufacturing, product development and marketing sites in Somerset, New Jersey; Poughkeepsie, New York; and St. Paul, Minnesota. Our Data Storage segment consists of the ion beam etch, ion beam deposition, diamond-like carbon, physical vapor deposition and dicing and slicing products sold primarily to customers in the data storage industry. This segment has manufacturing, product development and marketing sites in Plainview, New York; Camarillo, California; and Ft. Collins, Colorado. We evaluate the performance of our reportable segments based on income (loss) from continuing operations before interest, income taxes, amortization and certain items (in the aggregate “segment profit (loss)”), which is the primary indicator used to plan and forecast future periods. The presentation of this financial measure facilitates meaningful comparison with prior periods, as management believes segment profit (loss) reports baseline performance and thus provides useful information. Certain items include restructuring charges and equity-based compensation expense. The accounting policies of the reportable segments are the same as those described in the summary of critical accounting policies.
The following tables present certain data pertaining to our reportable segments and a reconciliation of segment (loss) profit to (loss) income from continuing operations before income taxes for the three months ended March 31, 2013 and 2012, respectively, and goodwill and total assets as of March 31, 2013 and December 31, 2012 (in thousands):
|
|
LED & Solar |
|
Data |
|
Unallocated |
|
Total |
| ||||
Three months ended March 31, 2013 |
|
|
|
|
|
|
|
|
| ||||
Net sales |
|
$ |
42,307 |
|
$ |
19,474 |
|
$ |
— |
|
$ |
61,781 |
|
Segment (loss) profit |
|
$ |
(11,222 |
) |
$ |
375 |
|
$ |
(4,811 |
) |
$ |
(15,658 |
) |
Interest income, net |
|
— |
|
— |
|
192 |
|
192 |
| ||||
Amortization |
|
(532 |
) |
(324 |
) |
— |
|
(856 |
) | ||||
Equity-based compensation |
|
(710 |
) |
(130 |
) |
(1,739 |
) |
(2,579 |
) | ||||
Restructuring |
|
(423 |
) |
(50 |
) |
(58 |
) |
(531 |
) | ||||
Loss from continuing operations before income taxes |
|
$ |
(12,887 |
) |
$ |
(129 |
) |
$ |
(6,416 |
) |
$ |
(19,432 |
) |
Three months ended March 31, 2012 |
|
|
|
|
|
|
|
|
| ||||
Net sales |
|
$ |
95,574 |
|
$ |
44,335 |
|
$ |
— |
|
$ |
139,909 |
|
Segment profit (loss) |
|
$ |
17,486 |
|
$ |
8,953 |
|
$ |
(1,085 |
) |
$ |
25,354 |
|
Interest income, net |
|
— |
|
— |
|
203 |
|
203 |
| ||||
Amortization |
|
(863 |
) |
(352 |
) |
— |
|
(1,215 |
) | ||||
Equity-based compensation |
|
(1,006 |
) |
(411 |
) |
(1,713 |
) |
(3,130 |
) | ||||
Restructuring |
|
(58 |
) |
(5 |
) |
— |
|
(63 |
) | ||||
Income (loss) from continuing operations before income taxes |
|
$ |
15,559 |
|
$ |
8,185 |
|
$ |
(2,595 |
) |
$ |
21,149 |
|
|
|
LED & Solar |
|
Data Storage |
|
Unallocated |
|
Total |
| ||||
As of March 31, 2013 |
|
|
|
|
|
|
|
|
| ||||
Goodwill |
|
$ |
55,828 |
|
$ |
— |
|
$ |
— |
|
$ |
55,828 |
|
Total assets |
|
$ |
256,616 |
|
$ |
38,465 |
|
$ |
640,802 |
|
$ |
935,883 |
|
|
|
|
|
|
|
|
|
|
| ||||
As of December 31, 2012 |
|
|
|
|
|
|
|
|
| ||||
Goodwill |
|
$ |
55,828 |
|
$ |
— |
|
$ |
— |
|
$ |
55,828 |
|
Total assets |
|
$ |
276,352 |
|
$ |
38,664 |
|
$ |
622,288 |
|
$ |
937,304 |
|
|
Note 5—Fair Value Measurements
We have categorized our assets and liabilities recorded at fair value based upon the fair value hierarchy. The levels of fair value hierarchy are as follows:
· Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access.
· Level 2 inputs utilize other-than-quoted prices that are observable, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs such as interest rates and yield curves that are observable at commonly quoted intervals.
· Level 3 inputs are unobservable and are typically based on our own assumptions, including situations where there is little, if any, market activity.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, we categorize such assets or liabilities based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset.
Both observable and unobservable inputs may be used to determine the fair value of positions that are classified within the Level 3 category. As a result, the unrealized gains and losses for assets within the Level 3 category may include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in historical company data) inputs.
The major categories of assets and liabilities measured on a recurring basis, at fair value, as of March 31, 2013 and December 31, 2012, are as follows (in thousands):
|
|
March 31, 2013 |
| ||||||||||
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
| ||||
Treasury bills |
|
$ |
271,201 |
|
$ |
— |
|
$ |
— |
|
$ |
271,201 |
|
Government agency securities |
|
— |
|
48,054 |
|
— |
|
48,054 |
| ||||
Corporate bonds |
|
— |
|
63,499 |
|
— |
|
63,499 |
| ||||
Commercial paper |
|
— |
|
19,992 |
|
— |
|
19,992 |
| ||||
Total |
|
$ |
271,201 |
|
$ |
131,545 |
|
$ |
— |
|
$ |
402,746 |
|
|
|
December 31, 2012 |
| ||||||||||
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
| ||||
Treasury bills |
|
$ |
278,698 |
|
$ |
— |
|
$ |
— |
|
$ |
278,698 |
|
Government agency securities |
|
— |
|
123,054 |
|
— |
|
123,054 |
| ||||
Total |
|
$ |
278,698 |
|
$ |
123,054 |
|
$ |
— |
|
$ |
401,752 |
|
Consistent with Level 1 measurement principles, treasury bills are priced using active market prices of identical securities. Consistent with Level 2 measurement principles, government agency securities, commercial paper and corporate bonds are priced with matrix pricing.
Government agency securities and treasury bills that are classified as cash equivalents are carried at cost, which approximates market value. Accordingly, no gains or losses (realized/unrealized) have been incurred for cash equivalents. All investments classified as available-for-sale are recorded at fair value within short-term investments in the Condensed Consolidated Balance Sheets.
In determining the fair value of its investments and levels, the Company uses pricing information from pricing services that value securities based on quoted market prices in active markets and matrix pricing. Matrix pricing is a mathematical valuation technique that does not rely exclusively on quoted prices of specific investments, but on the investment’s relationship to other benchmarked quoted securities. The Company has a review process in place for investment valuations to facilitate identification and resolution of potentially erroneous prices. The Company reviews the information provided by the third-party service provider to record the fair value of its portfolio.
|
Note 6—Derivative Financial Instruments
We use derivative financial instruments to minimize the impact of foreign currency exchange rate changes on earnings and cash flows. In the normal course of business, our operations are exposed to fluctuations in foreign currency exchange rates. In order to reduce the effect of fluctuating foreign currencies on short-term foreign currency-denominated intercompany transactions and other known foreign currency exposures, we enter into monthly forward contracts. We do not use derivative financial instruments for trading or speculative purposes. Our forward contracts are not expected to subject us to material risks due to exchange rate movements because gains and losses on these contracts are intended to offset exchange gains and losses on the underlying assets and liabilities. We have not designated these economic hedges as accounting hedges pursuant to the accounting guidance. The forward contracts are marked-to-market through earnings. We conduct our derivative transactions with highly rated financial institutions in an effort to mitigate any material counterparty risk. Derivatives consist of (in thousands):
March 31, 2013 | |||||||||||
|
|
|
|
|
|
|
|
|
| ||
Not Designated as Hedges under ASC 815 |
|
Component of |
|
Maturity |
|
Notional |
|
Estimated |
| ||
Foreign currency exchange forwards |
|
Accrued expenses and other current liabilities |
|
April 2013 |
|
$ |
3,715 |
|
$ |
(21 |
) |
Total Derivative Instruments |
|
|
|
|
|
$ |
3,715 |
|
$ |
(21 |
) |
December 31, 2012 | |||||||||||
|
|
|
|
|
|
|
|
|
| ||
Not Designated as Hedges under ASC 815 |
|
Component of |
|
Maturity |
|
Notional |
|
Estimated |
| ||
Foreign currency exchange forwards |
|
Prepaid expenses and other current assets |
|
January 2013 |
|
$ |
9,590 |
|
$ |
244 |
|
Total Derivative Instruments |
|
|
|
|
|
$ |
9,590 |
|
$ |
244 |
|
|
|
Location of Realized Net (Loss) Gain and |
|
For the three months |
| ||||
|
|
Changes in the Fair Value of Derivatives |
|
2013 |
|
2012 |
| ||
Foreign currency exchange forwards |
|
Other, net |
|
$ |
228 |
|
$ |
80 |
|
|
|
|
|
|
|
|
| ||
Weighted average notional amount of derivatives outstanding |
|
$ |
2,400 |
|
$ |
2,405 |
|
|
Note 7—Commitments, Contingencies and Other Matters
Restructuring
During the three months ended March 31, 2013, we took measures to improve profitability. As a result of these actions, we recorded a restructuring charge of $0.5 million. During the three months ended March 31, 2013, we recorded $0.4 million in personnel severance and related costs and $0.1 million in other associated costs resulting from a headcount reduction of approximately 20 employees.
A summary of restructuring expense is as follows (in thousands):
|
|
For the three months ended |
| ||||
|
|
2013 |
|
2012 |
| ||
Personnel severance and related costs |
|
$ |
435 |
|
$ |
63 |
|
Other associated costs |
|
96 |
|
— |
| ||
Restructuring expense |
|
$ |
531 |
|
$ |
63 |
|
Restructuring Liability
The following is a reconciliation of the restructuring liability through March 31, 2013 (in thousands):
|
|
LED & Solar |
|
Data Storage |
|
Unallocated |
|
Total |
| ||||
Short-term liability |
|
|
|
|
|
|
|
|
| ||||
Balance as of January 1, 2013 |
|
$ |
448 |
|
$ |
1,308 |
|
$ |
119 |
|
$ |
1,875 |
|
Restructuring |
|
422 |
|
51 |
|
58 |
|
531 |
| ||||
Cash payments |
|
(602 |
) |
(672 |
) |
(152 |
) |
(1,426 |
) | ||||
Balance as of March 31, 2013 |
|
$ |
268 |
|
$ |
687 |
|
$ |
25 |
|
$ |
980 |
|
The balance of the short-term liability will be paid over the next 12 months.
The following is a reconciliation of the restructuring liability through December 31, 2012 (in thousands):
|
|
LED & Solar |
|
Data Storage |
|
Unallocated |
|
Total |
| ||||
Short-term liability |
|
|
|
|
|
|
|
|
| ||||
Balance as of January 1, 2012 |
|
$ |
534 |
|
$ |
128 |
|
$ |
294 |
|
$ |
956 |
|
Restructuring |
|
874 |
|
1,684 |
|
135 |
|
2,693 |
| ||||
Cash payments |
|
(960 |
) |
(504 |
) |
(310 |
) |
(1,774 |
) | ||||
Balance as of December 31, 2012 |
|
$ |
448 |
|
$ |
1,308 |
|
$ |
119 |
|
$ |
1,875 |
|
|
Note 8—Subsequent Events
Notice of Potential De-Listing: During our internal control evaluation and accounting review, we were unable to timely file our periodic statements with the SEC and, as of the date of this Report, have yet to become current with all of our required filings. We have been notified by the NASDAQ Stock Market that our common stock listing will be suspended if we have not filed all of our outstanding periodic reports with the SEC on or before November 4, 2013. If our stock is delisted, then it will no longer be traded on the NASDAQ Global Select Market, however, it would continue to trade in the over-the-counter market, which may have an adverse effect on the trading price of our stock.
Colbus: Veeco and certain other parties were named as defendants in a lawsuit filed on April 25, 2013 in the Superior Court of California, County of Sonoma. The plaintiff in the lawsuit, Patrick Colbus, seeks unspecified damages and asserts claims that he suffered burns and other injuries while he was cleaning a molecular beam epitaxy system alleged to have been manufactured by Veeco. The lawsuit alleges, among other things, that the molecular beam epitaxy system was defective and that Veeco failed to adequately warn of the potential risks of the system. Veeco believes this lawsuit is without merit and intends to defend vigorously against the claims and Veeco maintains insurance which may apply to this matter. Because the Company believes that this potential loss is not probable or estimable, it has not recorded any reserves related to this legal matter.
Acquisition of Synos Technology, Inc. (“Synos”): On October 1, 2013, we acquired Synos, which designs and manufactures Fast Array Scanning™ Atomic Layer Deposition systems (“ALD”) that are enabling the production of flexible organic light-emitting diode (“OLED”) displays for mobile devices. The initial purchase price is $70 million. The agreement also includes an earn-out feature that would require an additional payment of up to $115 million if future performance milestones are achieved prior to December 31, 2014. With the earn-out feature, the total maximum potential purchase price is $185 million. Synos is headquartered in Fremont, California and has approximately 50 employees. Preliminary purchase accounting allocations for Synos are not yet available.
|
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by management include: the best estimate of selling price for our products and services; allowance for doubtful accounts; inventory valuation; recoverability and useful lives of property, plant and equipment and identifiable intangible assets; investment valuations; fair value of derivatives; recoverability of goodwill and long lived assets; recoverability of deferred tax assets; liabilities for product warranty; accruals for contingencies; equity-based payments, including forfeitures and performance based vesting; and liabilities for tax uncertainties. Actual results could differ from those estimates.
(Loss) Income Per Common Share
The following table sets forth the reconciliation of basic weighted average shares outstanding and diluted weighted average shares outstanding (in thousands):
|
|
Three months ended |
| ||
|
|
March 31, |
| ||
|
|
2013 |
|
2012 |
|
Basic weighted average shares outstanding |
|
38,716 |
|
38,261 |
|
Dilutive effect of stock options and restricted stock |
|
— |
|
602 |
|
Diluted weighted average shares outstanding |
|
38,716 |
|
38,863 |
|
Basic (loss) income per common share is computed using the weighted average number of common shares outstanding during the period. Diluted (loss) income per common share is computed using the weighted average number of common shares and common equivalent shares outstanding during the period. Potentially dilutive securities attributable to outstanding stock options and restricted stock were approximately 1.4 million and 1.2 million common equivalent shares during the three months ended March 31, 2013 and 2012. Approximately 0.5 million common equivalent shares were excluded from the calculation of diluted net loss per share during the three months ended March 31, 2013, because their effect on loss per share was anti-dilutive due to the net loss sustained during the period.
Revenue Recognition
We recognize revenue when all of the following criteria have been met: persuasive evidence of an arrangement exists with a customer; delivery of the specified products has occurred or services have been rendered; prices are contractually fixed or determinable; and collectability is reasonably assured. Revenue is recorded including shipping and handling costs and excluding applicable taxes related to sales. A significant portion of our revenue is derived from contractual arrangements with customers that have multiple elements, such as systems, upgrades, components, spare parts, maintenance and service plans. For sales arrangements that contain multiple elements, we split the arrangement into separate units of accounting if the individually delivered elements have value to the customer on a standalone basis. We also evaluate whether multiple transactions with the same customer or related party should be considered part of a multiple element arrangement, whereby we assess, among other factors, whether the contracts or agreements are negotiated or executed within a short time frame of each other or if there are indicators that the contracts are negotiated in contemplation of each other. When we have separate units of accounting, we allocate revenue to each element based on the following selling price hierarchy: vendor-specific objective evidence (“VSOE”) if available; third party evidence (“TPE”) if VSOE is not available; or our best estimate of selling price (“BESP”) if neither VSOE nor TPE is available. For the majority of the elements in our arrangements we utilize BESP. The accounting guidance for selling price hierarchy did not include BESP for arrangements entered into prior to January 1, 2011, and as such we recognized revenue for those arrangements as described below.
We consider many facts when evaluating each of our sales arrangements to determine the timing of revenue recognition, including the contractual obligations, the customer’s creditworthiness and the nature of the customer’s post-delivery acceptance provisions. Our system sales arrangements, including certain upgrades, generally include field acceptance provisions that may include functional or mechanical test procedures. For the majority of our arrangements, a customer source inspection of the system is performed in our facility or test data is sent to the customer documenting that the system is functioning to the agreed upon specifications prior to delivery. Historically, such source inspection or test data replicates the field acceptance provisions that will be performed at the customer’s site prior to final acceptance of the system. As such, we objectively demonstrate that the criteria specified in the contractual acceptance provisions are achieved prior to delivery and, therefore, we recognize revenue upon delivery since there is no substantive contingency remaining related to the acceptance provisions as of that date, subject to the retention amount constraint described below. For new products, new applications of existing products or for products with substantive customer acceptance provisions where we cannot objectively demonstrate that the criteria specified in the contractual acceptance provisions have been achieved prior to delivery, revenue and the associated costs are deferred and fully recognized upon the receipt of final customer acceptance, assuming all other revenue recognition criteria have been met.
Our system sales arrangements, including certain upgrades, generally do not contain provisions for right of return or forfeiture, refund, or other purchase price concessions. In the rare instances where such provisions are included, we defer all revenue until such rights expire. In many cases our products are sold with a billing retention, typically 10% of the sales price (the “retention amount”), which is typically payable by the customer when field acceptance provisions are completed. The amount of revenue recognized upon delivery of a system or upgrade is limited to the lower of i) the amount that is not contingent upon acceptance provisions or ii) the value allocated to the delivered elements, if such sale is part of a multiple-element arrangement.
For transactions entered into prior to January 1, 2011, under the accounting rules for multiple-element arrangements in place at that time, we deferred the greater of the retention amount or the relative fair value of the undelivered elements based on VSOE. When we could not establish VSOE or TPE for all undelivered elements of an arrangement, revenue on the entire arrangement was deferred until the earlier of the point when we did have VSOE for all undelivered elements or the delivery of all elements of the arrangement.
Our sales arrangements, including certain upgrades, generally include installation. The installation process is not deemed essential to the functionality of the equipment since it is not complex; that is, it does not require significant changes to the features or capabilities of the equipment or involve building elaborate interfaces or connections subsequent to factory acceptance. We have a demonstrated history of consistently completing installations in a timely manner and can reliably estimate the costs of such activities. Most customers engage us to perform the installation services, although there are other third-party providers with sufficient knowledge who could complete these services. Based on these factors, we deem the installation of our systems to be inconsequential and perfunctory relative to the system as a whole, and as a result, do not consider such services to be a separate element of the arrangement. As such, we accrue the cost of the installation at the time of revenue recognition for the system.
In Japan, where our contractual terms with customers generally specify title and risk and rewards of ownership transfer upon customer acceptance, revenue is recognized and the customer is billed upon the receipt of written customer acceptance.
Revenue related to maintenance and service contracts is recognized ratably over the applicable contract term. Component and spare part revenue are recognized at the time of delivery in accordance with the terms of the applicable sales arrangement.
|
The following table sets forth the reconciliation of basic weighted average shares outstanding and diluted weighted average shares outstanding (in thousands):
|
|
Three months ended |
| ||
|
|
March 31, |
| ||
|
|
2013 |
|
2012 |
|
Basic weighted average shares outstanding |
|
38,716 |
|
38,261 |
|
Dilutive effect of stock options and restricted stock |
|
— |
|
602 |
|
Diluted weighted average shares outstanding |
|
38,716 |
|
38,863 |
|
|
Available-for-sale securities consist of the following (in thousands):
|
|
March 31, 2013 |
| ||||||||||
|
|
Amortized |
|
Gains in |
|
Losses in |
|
Estimated |
| ||||
Treasury bills |
|
$ |
271,168 |
|
$ |
33 |
|
$ |
— |
|
$ |
271,201 |
|
Government agency securities |
|
8,055 |
|
— |
|
— |
|
8,055 |
| ||||
Corporate bonds |
|
63,488 |
|
38 |
|
(27 |
) |
63,499 |
| ||||
Commercial paper |
|
19,992 |
|
— |
|
— |
|
19,992 |
| ||||
Total available-for-sale securities |
|
$ |
362,703 |
|
$ |
71 |
|
$ |
(27 |
) |
$ |
362,747 |
|
|
|
December 31, 2012 |
| ||||||||||
|
|
Amortized |
|
Gains in |
|
Losses in |
|
Estimated |
| ||||
Treasury bills |
|
$ |
184,102 |
|
$ |
76 |
|
$ |
— |
|
$ |
184,178 |
|
Government agency securities |
|
8,056 |
|
— |
|
— |
|
8,056 |
| ||||
Total available-for-sale securities |
|
$ |
192,158 |
|
$ |
76 |
|
$ |
— |
|
$ |
192,234 |
|
The table below shows the fair value of short-term investments that have been in an unrealized loss position for less than 12 months as of March 31, 2013 (in thousands):
|
|
Estimated |
|
Unrealized |
| ||
Corporate bonds |
|
$ |
28,491 |
|
$ |
(27 |
) |
Total |
|
$ |
28,491 |
|
$ |
(27 |
) |
Contractual maturities of available-for-sale securities are as follows (in thousands):
|
|
March 31, 2013 |
| |
|
|
Estimated Fair Value |
| |
Due in one year or less |
|
$ |
288,752 |
|
Due in 1—2 years |
|
32,811 |
| |
Due in 2—3 years |
|
41,184 |
| |
Total available-for-sale securities |
|
$ |
362,747 |
|
Inventories are stated at the lower of cost (principally first-in, first-out) or market. Inventories consist of (in thousands):
|
|
March 31, |
|
December 31, |
| ||
|
|
2013 |
|
2012 |
| ||
Materials |
|
$ |
44,219 |
|
$ |
36,523 |
|
Work in process |
|
17,248 |
|
13,363 |
| ||
Finished goods |
|
6,222 |
|
9,921 |
| ||
|
|
$ |
67,689 |
|
$ |
59,807 |
|
Changes in our warranty liability during the period are as follows (in thousands):
|
|
Three months ended |
| ||||
|
|
March 31, |
| ||||
|
|
2013 |
|
2012 |
| ||
Balance as of the beginning of period |
|
$ |
4,942 |
|
$ |
8,731 |
|
Warranties issued during the period |
|
478 |
|
696 |
| ||
Settlements made during the period |
|
(1,341 |
) |
(1,840 |
) | ||
Changes in estimate during the period |
|
— |
|
327 |
| ||
Balance as of the end of period |
|
$ |
4,079 |
|
$ |
7,914 |
|
The components of accumulated other comprehensive income are (in thousands):
As of March 31, 2013 |
|
Gross |
|
Taxes |
|
Net |
| |||
Translation adjustments |
|
$ |
6,290 |
|
$ |
(352 |
) |
$ |
5,938 |
|
Minimum pension liability |
|
(1,285 |
) |
510 |
|
(775 |
) | |||
Unrealized gain on available-for-sale securities |
|
44 |
|
(13 |
) |
31 |
| |||
Accumulated other comprehensive income |
|
$ |
5,049 |
|
$ |
145 |
|
$ |
5,194 |
|
As of December 31, 2012 |
|
Gross |
|
Taxes |
|
Net |
| |||
Translation adjustments |
|
$ |
7,040 |
|
$ |
(339 |
) |
$ |
6,701 |
|
Minimum pension liability |
|
(1,285 |
) |
510 |
|
(775 |
) | |||
Unrealized gain on available-for-sale securities |
|
76 |
|
(29 |
) |
47 |
| |||
Accumulated other comprehensive income |
|
$ |
5,831 |
|
$ |
142 |
|
$ |
5,973 |
|
|
The following tables present certain data pertaining to our reportable segments and a reconciliation of segment (loss) profit to (loss) income from continuing operations before income taxes for the three months ended March 31, 2013 and 2012, respectively, and goodwill and total assets as of March 31, 2013 and December 31, 2012 (in thousands):
|
|
LED & Solar |
|
Data |
|
Unallocated |
|
Total |
| ||||
Three months ended March 31, 2013 |
|
|
|
|
|
|
|
|
| ||||
Net sales |
|
$ |
42,307 |
|
$ |
19,474 |
|
$ |
— |
|
$ |
61,781 |
|
Segment (loss) profit |
|
$ |
(11,222 |
) |
$ |
375 |
|
$ |
(4,811 |
) |
$ |
(15,658 |
) |
Interest income, net |
|
— |
|
— |
|
192 |
|
192 |
| ||||
Amortization |
|
(532 |
) |
(324 |
) |
— |
|
(856 |
) | ||||
Equity-based compensation |
|
(710 |
) |
(130 |
) |
(1,739 |
) |
(2,579 |
) | ||||
Restructuring |
|
(423 |
) |
(50 |
) |
(58 |
) |
(531 |
) | ||||
Loss from continuing operations before income taxes |
|
$ |
(12,887 |
) |
$ |
(129 |
) |
$ |
(6,416 |
) |
$ |
(19,432 |
) |
Three months ended March 31, 2012 |
|
|
|
|
|
|
|
|
| ||||
Net sales |
|
$ |
95,574 |
|
$ |
44,335 |
|
$ |
— |
|
$ |
139,909 |
|
Segment profit (loss) |
|
$ |
17,486 |
|
$ |
8,953 |
|
$ |
(1,085 |
) |
$ |
25,354 |
|
Interest income, net |
|
— |
|
— |
|
203 |
|
203 |
| ||||
Amortization |
|
(863 |
) |
(352 |
) |
— |
|
(1,215 |
) | ||||
Equity-based compensation |
|
(1,006 |
) |
(411 |
) |
(1,713 |
) |
(3,130 |
) | ||||
Restructuring |
|
(58 |
) |
(5 |
) |
— |
|
(63 |
) | ||||
Income (loss) from continuing operations before income taxes |
|
$ |
15,559 |
|
$ |
8,185 |
|
$ |
(2,595 |
) |
$ |
21,149 |
|
|
|
LED & Solar |
|
Data Storage |
|
Unallocated |
|
Total |
| ||||
As of March 31, 2013 |
|
|
|
|
|
|
|
|
| ||||
Goodwill |
|
$ |
55,828 |
|
$ |
— |
|
$ |
— |
|
$ |
55,828 |
|
Total assets |
|
$ |
256,616 |
|
$ |
38,465 |
|
$ |
640,802 |
|
$ |
935,883 |
|
|
|
|
|
|
|
|
|
|
| ||||
As of December 31, 2012 |
|
|
|
|
|
|
|
|
| ||||
Goodwill |
|
$ |
55,828 |
|
$ |
— |
|
$ |
— |
|
$ |
55,828 |
|
Total assets |
|
$ |
276,352 |
|
$ |
38,664 |
|
$ |
622,288 |
|
$ |
937,304 |
|
|
The major categories of assets and liabilities measured on a recurring basis, at fair value, as of March 31, 2013 and December 31, 2012, are as follows (in thousands):
|
|
March 31, 2013 |
| ||||||||||
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
| ||||
Treasury bills |
|
$ |
271,201 |
|
$ |
— |
|
$ |
— |
|
$ |
271,201 |
|
Government agency securities |
|
— |
|
48,054 |
|
— |
|
48,054 |
| ||||
Corporate bonds |
|
— |
|
63,499 |
|
— |
|
63,499 |
| ||||
Commercial paper |
|
— |
|
19,992 |
|
— |
|
19,992 |
| ||||
Total |
|
$ |
271,201 |
|
$ |
131,545 |
|
$ |
— |
|
$ |
402,746 |
|
|
|
December 31, 2012 |
| ||||||||||
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
| ||||
Treasury bills |
|
$ |
278,698 |
|
$ |
— |
|
$ |
— |
|
$ |
278,698 |
|
Government agency securities |
|
— |
|
123,054 |
|
— |
|
123,054 |
| ||||
Total |
|
$ |
278,698 |
|
$ |
123,054 |
|
$ |
— |
|
$ |
401,752 |
|
|
We conduct our derivative transactions with highly rated financial institutions in an effort to mitigate any material counterparty risk. Derivatives consist of (in thousands):
March 31, 2013 | |||||||||||
|
|
|
|
|
|
|
|
|
| ||
Not Designated as Hedges under ASC 815 |
|
Component of |
|
Maturity |
|
Notional |
|
Estimated |
| ||
Foreign currency exchange forwards |
|
Accrued expenses and other current liabilities |
|
April 2013 |
|
$ |
3,715 |
|
$ |
(21 |
) |
Total Derivative Instruments |
|
|
|
|
|
$ |
3,715 |
|
$ |
(21 |
) |
December 31, 2012 | |||||||||||
|
|
|
|
|
|
|
|
|
| ||
Not Designated as Hedges under ASC 815 |
|
Component of |
|
Maturity |
|
Notional |
|
Estimated |
| ||
Foreign currency exchange forwards |
|
Prepaid expenses and other current assets |
|
January 2013 |
|
$ |
9,590 |
|
$ |
244 |
|
Total Derivative Instruments |
|
|
|
|
|
$ |
9,590 |
|
$ |
244 |
|
|
|
Location of Realized Net (Loss) Gain and |
|
For the three months |
| ||||
|
|
Changes in the Fair Value of Derivatives |
|
2013 |
|
2012 |
| ||
Foreign currency exchange forwards |
|
Other, net |
|
$ |
228 |
|
$ |
80 |
|
|
|
|
|
|
|
|
| ||
Weighted average notional amount of derivatives outstanding |
|
$ |
2,400 |
|
$ |
2,405 |
|
|
A summary of restructuring expense is as follows (in thousands):
|
|
For the three months ended |
| ||||
|
|
2013 |
|
2012 |
| ||
Personnel severance and related costs |
|
$ |
435 |
|
$ |
63 |
|
Other associated costs |
|
96 |
|
— |
| ||
Restructuring expense |
|
$ |
531 |
|
$ |
63 |
|
The following is a reconciliation of the restructuring liability through March 31, 2013 (in thousands):
|
|
LED & Solar |
|
Data Storage |
|
Unallocated |
|
Total |
| ||||
Short-term liability |
|
|
|
|
|
|
|
|
| ||||
Balance as of January 1, 2013 |
|
$ |
448 |
|
$ |
1,308 |
|
$ |
119 |
|
$ |
1,875 |
|
Restructuring |
|
422 |
|
51 |
|
58 |
|
531 |
| ||||
Cash payments |
|
(602 |
) |
(672 |
) |
(152 |
) |
(1,426 |
) | ||||
Balance as of March 31, 2013 |
|
$ |
268 |
|
$ |
687 |
|
$ |
25 |
|
$ |
980 |
|
The following is a reconciliation of the restructuring liability through December 31, 2012 (in thousands):
|
|
LED & Solar |
|
Data Storage |
|
Unallocated |
|
Total |
| ||||
Short-term liability |
|
|
|
|
|
|
|
|
| ||||
Balance as of January 1, 2012 |
|
$ |
534 |
|
$ |
128 |
|
$ |
294 |
|
$ |
956 |
|
Restructuring |
|
874 |
|
1,684 |
|
135 |
|
2,693 |
| ||||
Cash payments |
|
(960 |
) |
(504 |
) |
(310 |
) |
(1,774 |
) | ||||
Balance as of December 31, 2012 |
|
$ |
448 |
|
$ |
1,308 |
|
$ |
119 |
|
$ |
1,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|