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Investors Press Releases

Nova Announces Record 2014 Full-Year Results

Rehovot, Israel, February 18, 2015

Record Annual Revenues of $120.6 million
Annual Net Income of $18.7 million

Rehovot, Israel, February 18, 2015 Nova Measuring Instruments Ltd. (Nasdaq: NVMI), a leading innovator and a key provider of optical metrology solutions for advanced process control used in semiconductor manufacturing, today reported record 2014 full year results.

Full Year 2014 Highlights:

  • Record annual revenues of $120.6 million
  • Annual GAAP Net income up 77% year-over-year
  • Record annual cash flow from operating activities of $33.5 million
  • Increased deliveries to support 20nm technology nodes and below – 76% of yearly product revenues
  • Strengthened position in Memory with extended product penetration
  • Software products generated 4% of annual revenues
  • Initiated capital return program with $12 million share repurchase plan
GAAP Results ($K)
Q4 2014 Q3 2014 Q4 2013 FY2014 FY2013
Revenues $25,823 $27,350 $30,189 $120,618 $111,509
Net Income $3,291 $3,269 $3,077 $18,652 $10,515
Earnings per Diluted Share $0.12 $0.12 $0.11 $0.67 $0.38
NON-GAAP Results ($K)
Q4 2014 Q3 2014 Q4 2013 FY2014 FY2013
Net Income $2,259 $3,854 $4,055 $19,150 $14,147
Earnings per Diluted Share $0.08 $0.14 $0.15 $0.69 $0.52

A reconciliation between GAAP operating results and non-GAAP operating results is provided following the financial statements that are part of this release. Non-GAAP results exclude adjustments of deferred taxes, stock based compensation expenses, income from insurance claim and loss related to equipment and inventory damage.

 Management Comments

“Nova continues to perform well, delivering bottom-line results that exceeded the quarterly guidance and revenues in-line with our outlook, leading to a record year in 2014,” commented Eitan Oppenhaim, President and CEO of Nova. “This is another record year in revenues for the company, reflecting the growing adoption of our Optical Metrology solutions and a stronger position in the advanced technology nodes.”

“Our investment in strengthening our product offering is clearly paying off and improving our market position, as advanced nodes now account for the majority of our deliveries, with 76% of our yearly revenues generated from 20nm technology nodes and below,” continued Mr. Oppenhaim. “During the year, we also diversified our business across a broader base of customers, with three customers contributing more than 10% each to our business. We are particularly excited about the market acceptance of our software solutions, and we view them as a significant growth engine going forward.”

Mr. Oppenhaim added, “With these encouraging results we are well positioned to capture more growth opportunities in 2015. We are confident that our solid business model and capital structure will continue to support our growing presence in multiple customers with more process steps and in all advanced technology nodes.”

2014 Full Year Results

Total revenues for 2014 were $120.6 million, an increase of 8% compared to total revenues of $111.5 million for 2013.

Gross margin in 2014 was 53%, similar to 2013.

Operating expenses in 2014 were $46.7 million, similar to 2013.

On a GAAP basis, the company reported net income of $18.7 million in 2014, or $0.67 per diluted share. This compares to a net income of $10.5 million, or $0.38 per diluted share, in 2013.

On a Non-GAAP basis, which excludes adjustments of deferred taxes, stock based compensation expenses, and with respect to 2013 also income from insurance claim and loss related to equipment and inventory damage, the company reported net income $19.2 million in 2014, or $0.69 per diluted share. This compares to a net income of $14.1 million, or $0.52 per diluted share, in 2013.

During 2014, the company generated $33.5 million in cash flow from operating activities, as compared to $11.0 million cash flow generated from operating activities in 2013.

Total cash reserves at the end of 2014 were $123.7 million, compared to $99.7 million at the end of 2013.

2014 Fourth Quarter Results

Total revenues for the fourth quarter of 2014 were $25.8 million, a decrease of 14% relative to the fourth quarter of 2013, and a decrease of 6% relative to the third quarter of 2014.

Gross margin for the fourth quarter of 2014 was 52%, compared with 53% in the fourth quarter of 2013 and 54% in the third quarter of 2014.

Operating expenses in the fourth quarter of 2014 were $11.9 million, compared with $12.0 million in the fourth quarter of 2013 and $11.5 million in the third quarter of 2014.

On a GAAP basis, the company reported net income of $3.3 million, or $0.12 per diluted share, in the fourth quarter of 2014. This compares to a net income of $3.1 million, or $0.11 per diluted share, in the fourth quarter of 2013, and a net income of $3.3 million, or $0.12 per diluted share, in the third quarter of 2014.

On a Non-GAAP basis, which excludes adjustments of deferred taxes and stock based compensation expenses, the company reported net income of $2.3 million, or $0.08 per diluted share, in the fourth quarter of 2014. This compares to a net income of $4.1 million, or $0.15 per diluted share, in the fourth quarter of 2013, and a net income of $3.9 million, or $0.14 per diluted share, in the third quarter of 2014.

Conference Call Information

Nova will host a conference call today, February 18, 2015 at 4:30 p.m. Eastern Time, to discuss the fourth quarter and full year 2014 results and future outlook.

To attend the conference call, please dial one of the following teleconferencing numbers. Please begin by placing your calls 5 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, please try the international dial-in number.

U.S. Dial-in Number: 1-888-812-8535

ISRAEL Dial-in Number: 1809-24-6064

INTERNATIONAL Dial-in Number: 1-913-312-6664

At:

4:30 p.m. Eastern Time

1:30 p.m. Pacific Time

11:30 p.m. Israeli Time

The conference call will also be webcast live from a link on Nova’s website at http://ir.novameasuring.com. For those unable to participate in the conference call, there will be a replay available from a link on Nova’s website at http://ir.novameasuring.com.

About Nova: Nova Measuring Instrument Ltd. delivers continuous innovation by providing advanced optical metrology solutions for the semiconductor manufacturing industry. Deployed with the world’s largest integrated-circuit manufacturers, Nova’s products deliver state-of-the-art, high-performance metrology solutions for effective process control throughout the semiconductor fabrication lifecycle. Nova’s product portfolio, which combines high-precision hardware and cutting-edge software, supports the development and production of the most advanced devices in today’s high-end semiconductor market. Nova’s technical innovation and market leadership enable customers to improve process performance, enhance products’ yields and accelerate time to market. Nova acts as a partner to semiconductor manufacturers from its offices around the world. Additional information may be found at www.novameasuring.com.

Nova is traded on the NASDAQ & TASE under the symbol NVMI.

This press release provides financial measures that exclude non-cash charges for stock-based compensation, income from insurance claim, loss related to equipment and inventory damage as well as deferred income taxes adjustments and are therefore not calculated in accordance with generally accepted accounting principles (GAAP). Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding Nova’s performance because they reflect our operational results and enhances management’s and investors’ ability to evaluate Nova’s performance before charges or benefits considered by management to be outside Nova’s ongoing operating results. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management believes that it is in the best interest of its investors to provide financial information that will facilitate comparison of both historical and future results and allows greater transparency to supplemental information used by management in its financial and operational decision making. A reconciliation of each GAAP to non-GAAP financial measure discussed in this press release is contained in the accompanying financial tables.

This press release contains forward-looking statements within the meaning of safe harbor provisions of the Private Securities Litigation Reform Act of 1995 relating to future events or our future performance, such as statements regarding trends, demand for our products, expected deliveries, transaction, expected revenues, operating results, earnings and profitability. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied in those forward looking statements. These risks and other factors include but are not limited to:  our dependency on two product lines; our dependency on a small number of large customers and small number of suppliers; the highly cyclical nature of the markets we target; our inability to reduce spending during a slowdown in the semiconductor industry; our ability to respond effectively on a timely basis to rapid technological changes; our dependency on PEM; risks related to exclusivity obligations and non-limited liability that may be included in our commercial agreements and arrangements; our ability to retain our competitive position despite the ongoing consolidation in our industry; risks related to our dependence on a single manufacturing facility; risks related to the extremely competitive market we are operation in;   risks related to changes in our order backlog; risks related to the financial, political and environmental instabilities in Asia; risks related to our intellectual property; new product offerings from our competitors; unanticipated manufacturing or supply problems; changes in tax requirements; changes in customer demand for our products; risks related to currency fluctuations and risks related to our operations in Israel. We cannot guarantee future results, levels of activity, performance or achievements. The matters discussed in this press release also involve risks and uncertainties summarized under the heading “Risk Factors” in Nova’s Annual Report on Form 20-F for the year ended December 31, 2013 filed with the Securities and Exchange Commission on February 28, 2014. These factors are updated from time to time through the filing of reports and registration statements with the Securities and Exchange Commission. Nova Measuring Instruments Ltd. does not assume any obligation to update the forward-looking information contained in this press release.

(Tables to Follow)

NOVA MEASURING INSTRUMENTS LTD.

CONSOLIDATED BALANCE SHEET

(U.S. dollars in thousands)

As of December 31,
2 0 1 4   2 0 1 3
CURRENT ASSETS
Cash and cash equivalents 13,649 17,542
Short-term interest-bearing bank deposits 107,289 79,552
Held for trading securities 1,995
Available for sale securities 1,845
Trade accounts receivable 15,566 27,947
Inventories 16,107 18,118
Deferred income tax assets 142 137
Other current assets 2,928 3,922
157,676 149,063
LONG-TERM ASSETS
Long-term interest-bearing bank deposits 750 750
Deferred income tax assets 1,654 33
Other long-term assets 169 197
Severance pay funds 1,580 1,852
4,153 2,832
FIXED ASSETS, NET 11,450 10,382
Total assets 173,279 162,277
CURRENT LIABILITIES
Trade accounts payable 11,568 15,599
Deferred revenues 3,022 3,420
Other current liabilities 12,606 11,448
27,196 30,467
LONG-TERM LIABILITIES
Liability for employee severance pay 2,465 2,798
Deferred revenues 36 341
Other long-term liability 7
2,501 3,146
SHAREHOLDERS’ EQUITY 143,582 128,664
Total liabilities and shareholders’ equity 173,279 162,277

 

NOVA MEASURING INSTRUMENTS LTD.

QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. dollars in thousands, except per share data)

  Three months ended
  December 31   September 30   December 31
  2 0 1 4   2 0 1 4   2 0 1 3
 
REVENUES
Products 17,260 20,157 24,739
Services 8,563 7,193 5,450
25,823 27,350 30,189
COST OF REVENUES
Products 7,394 8,543 10,299
Services 4,967 3,975 4,018
12,361 12,518 14,317
 
GROSS PROFIT 13,462 14,832 15,872
 
OPERATING EXPENSES
Research and Development expenses, net 7,935 7,510 7,491
Sales and Marketing expenses 2,948 2,888 3,128
General and Administration expenses 981 1,096 1,350
11,864 11,494 11,969
 
OPERATING PROFIT 1,598 3,338 3,903
 
FINANCING INCOME, NET 166 20 60
 
INCOME BEFORE INCOME TAXES 1,764 3,358 3,963
 
INCOME TAXES EXPENSES (BENEFIT) (1,527) 89 886
 
NET INCOME FOR THE PERIOD 3,291 3,269 3,077
 
Earnings per share:
Basic 0.12 0.12 0.11
Diluted 0.12 0.12 0.11
Shares used for calculation of earnings per share:      
Basic 27,273 27,496 27,268
Diluted 27,491 27,780 27,548

 

NOVA MEASURING INSTRUMENTS LTD.

ANNUAL CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. dollars in thousands, except per share data)

Year ended
December 31,
2 0 1 4   2 0 1 3
REVENUES
Products 92,208 89,410
Services 28,410 22,099
120,618 111,509
COST OF REVENUES
Products 39,784 37,765
Services 17,221 14,673
57,005 52,438
 
 
GROSS PROFIT 63,613 59,071
 
OPERATING EXPENSES
Research and Development expenses, net 29,498 29,578
Sales and Marketing expenses 12,747 11,963
General and Administration expenses 4,457 5,197
46,702 46,738
 
OPERATING PROFIT 16,911 12,333
 
FINANCING INCOME, NET 563 693
INCOME BEFORE INCOME TAXES 17,474 13,026
INCOME TAXES EXPENSES (BENEFIT) (1,178) 2,511
 
NET INCOME FOR THE YEAR 18,652 10,515
 
Earnings per share:
Basic 0.68 0.39
Diluted 0.67 0.38
Shares used for calculation of earnings per share:
Basic 27,447 27,091
Diluted 27,807 27,373

 

NOVA MEASURING INSTRUMENTS LTD.

QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)

  Three months ended
  December 31   September 30   December 31
  2 0 1 4   2 0 1 4   2 0 1 3
 
CASH FLOW – OPERATING ACTIVITIES
Net income for the period 3,291 3,269 3,077
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 1,005 1,072 945
Amortization of deferred stock-based compensation 510 620 518
Decrease in liability for employee termination benefits, net (42) (77) (37)
Decrease (increase) in deferred income tax assets, net (1,542) (35) 460
Loss on securities 175
Decrease (increase) in trade accounts receivables 7,208 3,330 (7,118)
Decrease (increase) in inventories 935 1,963 (1,950)
Decrease (increase) in other current and long term assets (386) 1,254 (291)
Increase (decrease) in trade accounts payables and other

long-term liabilities

2,674 (3,207) 4,489
Increase (decrease) in other current liabilities (438) 56 1,600
Decrease in short and long term deferred revenues (1,127) (1,906) (234)
Net cash provided by operating activities 12,263 6,339 1,459
CASH FLOW – INVESTMENT ACTIVITIES
Decrease (increase) in short-term interest-bearing bank deposits (7, 295) (8,458) 4,367
Increase     in long-term interest-bearing bank deposits (345)
Proceeds from (investment in) short-term available for sale securities 1,617 18 (1,845)
Investment in short term held for trading securities (1,942)
Additions to fixed assets (1,693) (1,788) (1,974)
Net cash provided by (used in) investment activities (9,313) (10,228) 203
           
CASH FLOW – FINANCING ACTIVITIES          
           
Purchases of treasury shares (2,450) (3,173)
Shares issued under employee share-based plans 312 123
Net cash provided by (used in) financing activities (2,450) (2,861) 123
 
Increase (decrease) in cash and cash equivalents 500 (6,750) 1,785
 
Cash and cash equivalents – beginning of period 13,149 19,899 15,757
 
Cash and cash equivalents – end of period 13,649 13,149 17,542
           

 

NOVA MEASURING INSTRUMENTS LTD.

ANNUAL CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)

Year ended
December 31,
2 0 1 4 2 0 1 3
CASH FLOW – OPERATING ACTIVITIES
Net income for the year 18,652 10,515
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 3,951 3,522
Loss related to equipment and inventory damage 148
Amortization of deferred stock-based compensation 2,124 2,095
Increase (decrease) in liability for employee termination benefits, net (71) 17
Loss on securities 175
Decrease (increase) in deferred income tax assets, net (1,626) 1,898
Decrease (increase) in trade accounts receivables 12,381 (10,585)
Decrease (increase) in inventories 2,226 (1,783)
Decrease (increase) in other current and long term assets 408 (1,234)
Increase (decrease) in trade accounts payables and other long-term liabilities (4,038) 4,517
Increase in other current liabilities 64 3,054
Decrease in short and long term deferred revenues (703) (1,173)
Net cash provided by operating activities 33,543 10,991
CASH FLOW – INVESTMENT ACTIVITIES
Increase in short-term interest-bearing bank deposits (27,737) (4,513)
Increase in long-term interest-bearing bank deposits (345)
Proceeds from (investment in) short-term available for sale securities 1,617 (1,845)
Investment in short-term held for trading securities (1,942)
Reimbursement from insurance claim 219
Additions to fixed assets (5,234) (4,119)
Net cash used in investment activities (33,296) (10,603)
CASH FLOW – FINANCING ACTIVITIES
Purchases of treasury shares (6,726)
Shares issued under employee share-based plans 2,586 1,191
Net cash provided by (used in) financing activities (4,140) 1,191
 
Increase (decrease) in cash and cash equivalents (3,893) 1,579
 
Cash and cash equivalents – beginning of year 17,542 15,963
 
Cash and cash equivalents – end of year 13,649 17,542
     

 

NOVA MEASURING INSTRUMENTS LTD.

DISCLOSURE OF NON-GAAP NET INCOME

(U.S. dollars in thousands, except per share data)

  Three months ended
  December 31   September 30   December 31
  2 0 1 4   2 0 1 4   2 0 1 3
 
GAAP Net income for the period 3,291 3,269 3,077
 
Non-GAAP Adjustments:
 
Stock based compensation expenses 510 620 518
Deferred income tax assets, net (1,542) (35) 460
Non-GAAP Net income for the period 2,259 3,854 4,055
 
Non-GAAP Net income per share:
Basic 0.08 0.14 0.15
Diluted 0.08 0.14 0.15
Shares used for calculation of Non-GAAP earnings per share:
Basic 27,273 27,496 27,268
Diluted 27,491 27,780 27,548
         

 

Year ended
December 31,
2 0 1 4 2 0 1 3
GAAP Net income for the year 18,652 10,515
 
Non-GAAP Adjustments:
 
Stock based compensation expenses 2,124 2,095
Deferred income tax assets, net (1,626) 1,898
Reimbursement from insurance claim (509)
Loss related to equipment and inventory damage 148
Non-GAAP Net income for the year 19,150 14,147
 
Non-GAAP Net income per share:
Basic 0.70 0.52
Diluted 0.69 0.52
Shares used for calculation of Non-GAAP earnings per share:
Basic 27,447 27,091
Diluted 27,807 27,373
Company Contact:
Dror David, Chief Financial Officer
Nova Measuring Instruments Ltd.
Tel: +972-73-229-5760
E-mail: info@novami.com
www.novami.com
Investor Relations Contacts:
Miri Segal
MS-IR LLC
Tel: +917-607-8654
E-mail: msegal@ms-ir.com