| PART I | 5 |
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| Item 1. Business | 5 |
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| Item 1A. Risk Factors | 13 |
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| Item 1B. Unresolved Staff Comments | 28 |
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| Item 1C. Cybersecurity | 28 |
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| Item 2. Properties | 30 |
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| Item 3. Legal Proceedings | 30 |
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| Item 4. Mine Safety Disclosures | 30 |
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| PART II | 31 |
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| Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 31 |
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| Stock Performance Graph | 32 |
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| Item 6. [Reserved] | 32 |
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| Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 33 |
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| Item 7A. Quantitative and Qualitative Disclosures about Market Risk | 43 |
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| Item 8. Financial Statements and Supplementary Data | 43 |
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| Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 44 |
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| Item 9A. Controls and Procedures | 44 |
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| Item 9B. Other Information | 46 |
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| PART III | 46 |
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| Item 10. Directors, Executive Officers and Corporate Governance | 46 |
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| Item 11. Executive Compensation | 46 |
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| Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 46 |
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| Item 13. Certain Relationships and Related Transactions, and Director Independence | 46 |
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| Item 14. Principal Accounting Fees and Services | 46 |
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| PART IV | 47 |
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| Item 15. Exhibits, Financial Statement Schedules | 47 |
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| SIGNATURES | 51 |
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This Annual Report on Form 10-K (“Form 10-K”) contains certain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, as amended, relating to Veeco Instruments Inc. (together with its consolidated subsidiaries, “Veeco,” the “Company,” “Registrant,” “we,” “our,” or “us,” unless the context indicates otherwise) that are based on management’s expectations, estimates, projections, and assumptions. When used in this Form 10-K, words such as “expects,” “anticipates,” “plans,” “believes,” “scheduled,” “estimates,” and variations of these words and similar expressions are intended to identify forward-looking statements. Discussions containing such forward-looking statements may be found in Part I, Items 1 and 3, Part II, Items 7 and 7A hereof, as well as within this Form 10-K generally. Forward-looking statements in this discussion include, but are not limited to, those regarding anticipated growth and trends in our businesses and markets, industry outlooks and demand drivers, our investment and growth strategies, our development of new products and technologies, our business outlook for the current and future periods, our ongoing transformation initiative and the effects thereof on our operations and financial results, and other statements that are not historical facts. These statements and their underlying assumptions are subject to risks and uncertainties and are not guarantees of future performance. Factors that could cause actual results to differ materially from those expressed or implied by such statements include, without limitation:
Risks Related to Our Business and Industry
| ● | Unfavorable market conditions have adversely affected, and may continue to adversely affect, our operating results; |
| ● | We face significant competition; |
| ● | We operate in industries characterized by rapid technological change; |
| ● | Certain of our sales are dependent on the demand for consumer electronic products and automobiles, which can experience significant volatility; |
| ● | We have a concentrated customer base, located primarily in a limited number of regions, which operates in highly concentrated industries; |
| ● | The cyclicality of the industries we serve directly affects our business; |
| ● | Our failure to estimate customer demand accurately could result in inventory obsolescence, liabilities to our suppliers for products no longer needed, and manufacturing interruptions or delays which could affect our ability to meet customer demand; |
| ● | We rely on a limited number of suppliers, some of whom are our sole source for particular components; |
| ● | Our failure to successfully manage our outsourcing activities or failure of our outsourcing partners to perform as anticipated could adversely affect our results of operations; |
| ● | The timing of our orders, shipments, and revenue recognition may cause our quarterly operating results to fluctuate significantly; |
| ● | Our sales cycle is long and unpredictable; |
| ● | Our backlog is subject to customer cancellation or modification which could result in decreased sales, increased inventory obsolescence, and liabilities to our suppliers for products no longer needed; |
| ● | We are exposed to risks associated with business combinations, acquisitions, strategic investments and divestitures; |
Risks Associated with Operating a Global Business
| ● | We are exposed to risks of operating businesses outside the United States; |
| ● | Changes in U.S. trade policy and export controls and ongoing trade disputes between the U.S. and China have adversely affected, and may continue to adversely affect, our business, results of operations, and financial condition; |
| ● | We may be unable to obtain required export licenses for the sale of our products; |
| ● | We are exposed to various risks associated with global regulatory requirements; |
Risks Related to Intellectual Property and Cybersecurity
| ● | Disruptions in our information technology systems or data security incidents could result in significant financial, legal, regulatory, business, and reputational harm to us; |
| ● | We may be unable to effectively enforce and protect our intellectual property rights; |
| ● | We may be subject to claims of intellectual property infringement by others; |
Financial, Accounting and Capital Market Risks
| ● | Our operating results may be adversely affected by tightening credit markets; |
| ● | We are subject to foreign currency exchange risks; |
| ● | We may be required to take impairment charges on assets; |
| ● | Changes in accounting pronouncements or taxation rules, practices, or rates may adversely affect our financial results; |
| ● | Our current debt facilities may contain certain restrictions, covenants and repurchase provisions that may limit our ability to raise the funds necessary to meet our working capital needs, which may include the cash conversion of the Notes or repurchase of the Notes for cash upon a fundamental change; |
| ● | Issuance of our common stock, if any, upon conversion of the Notes, as well as the capped call transactions and the hedging activities of the option counterparties, may impair or reduce our ability to utilize our research and development credits carryforwards in the future; |
| ● | The capped call transactions may affect the value of the 2027 Notes and our common stock; |
General Risk Factors
| ● | The price of our common shares is volatile and could decrease; |
| ● | Our inability to attract, retain, and motivate employees could have a material adverse effect on our business; |
| ● | We are subject to risks of non-compliance with environmental, health, and safety regulations; |
| ● | We are exposed to risks associated with the increased attention by our stakeholders to environmental, social and governance (“ESG”) matters; and |
| ● | We have adopted certain measures that may have anti-takeover effects which may make an acquisition of our Company by another company more difficult. |
All forward-looking statements speak only to management’s expectations, estimates, projections and assumptions as of the date of this filing or, in the case of any document referenced herein or incorporated by reference, the date of that document. The Company does not undertake any obligation to update or publicly revise any forward-looking statements to reflect events, circumstances or changes in expectations after the date of this filing.
