X
Go
Investors Press Releases

Nova Reports First Quarter 2019 Results

Rehovot, Israel, May 1, 2019

Rehovot, Israel, May 1, 2019 – Nova (Nasdaq: NVMI) today announced financial results for the first quarter 2019, the period ended March 31, 2019.

First Quarter 2019 Highlights:

  • Quarterly revenue of $56.7 million, meeting guidance of $52 Million to $58 Million.
  • GAAP net income of $7.8 million, or $0.27 per diluted share, exceeding guidance of $0.15 to $0.26 per share
  • Non-GAAP net income of $10.4 million, or $0.37 per diluted share, exceeding guidance of $0.24 to $0.34 per share
  • Five customers contributed 10% or more each to total product revenues, including two Foundry and three Memory providers
  • Additional Memory penetration and extensive deliveries to leading edge Foundry led to a balanced revenue mix

 

GAAP Results ($K)

  Q1 2019 Q4 2018 Q1 2018
Revenues $56,657 $63,072 $62,603
Net Income $7,756 $15,152 $14,080
Earnings per Diluted Share $0.27 $0.53 $0.49

NON-GAAP Results ($K)

  Q1 2019 Q4 2018 Q1 2018
Net Income $10,449 $16,914 $15,430
Earnings per Diluted Share $0.37 $0.59 $0.54

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 amortization of acquired intangible assets, stock-based compensation expenses, facilities transition costs, revaluation of long-term liabilities and tax effect of non-GAAP adjustments.

 

Management Comments
“Nova continued to demonstrate solid execution through the first quarter of 2019, with revenue within the guidance range and EPS exceeding guidance. The results demonstrate the efficient business model we have built predicated on growing diversification in our revenue mix, customer base and technology offering” commented Eitan Oppenhaim, President and Chief Executive Officer of Nova. “Looking forward, we are confident in our strategy and expect that our balanced market exposure, combined with our newly awaited products, will further strengthen the company’s fundamentals and will support our long-term growth plans as market conditions improve beyond the interim industry volatility.”

2019 Second Quarter Financial Outlook
Management provided an outlook for the second quarter, the period ending June 30, 2019. Based on current estimates, management expects:

  • $45 million to $53 million in revenue
  • $0.09 to $ 0.26 in diluted GAAP EPS
  • $ 0.17 to $ 0.35 in diluted non-GAAP EPS

2019 First Quarter Results
Total revenues for the first quarter of 2019 were $56.7 million, a decrease of 10% compared to the fourth quarter of 2018 and the first quarter of 2018.
Gross margin for the first quarter of 2019 was 56%, compared to 57% gross margin in the fourth quarter of 2018, and compared to the gross margin of 58% in the first quarter of 2018.
Operating expenses in the first quarter of 2019 were $22.9 million, compared with $20.7 in the fourth quarter of 2018, and compared with $20.3 million in the first quarter of 2018.
On a GAAP basis, the company reported net income of $7.8 million, or $0.27 per diluted share, in the first quarter of 2019. This is compared with $15.2 million, or $0.53 per diluted share, in the fourth quarter of 2018, and compared with net income of $14.1 million, or $0.49 per diluted share, in the first quarter of 2018.
On a non-GAAP basis, which exclude amortization of acquired intangible assets, stock-based compensation expenses, facilities transition costs, revaluation of long-term liabilities and tax effect of non-GAAP adjustments, the company reported net income of $10.4 million, or $0.37 per diluted share, in the first quarter of 2019. This is compared with net income of $16.9 million, or $0.59 per diluted share, in the fourth quarter of 2018, and compared with net income of $15.4 million, or $0.54 per diluted share, in the first quarter of 2018.

Conference Call Information
Nova will host a conference call today, May 1, 2019, at 9 a.m. Eastern Time, to discuss the financial results and future outlook. To attend the conference call, please dial one of the following teleconferencing numbers. Please begin by placing your calls five 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: 1-888-394-8218
ISRAEL Dial-in Number: 1-809-212-883
INTERNATIONAL Dial-in Number: 1-323-701-0225

At:

9 a.m. Eastern Time
6 a.m. Pacific Time
4 p.m. Israeli Time

Please reference conference ID 3002923

The conference call will also be webcast live from a link on Nova’s website at http://ir.novami.com.

A replay of the conference call will be available from May 1, 2019 at 12 p.m. Eastern Time to May 8, 2019 at 11:59 p.m. Eastern Time. To access the replay, please dial one of the following numbers:

Replay Dial-in TOLL-FREE   1-844-512-2921 
Replay Dial-in TOLL/INTERNATIONAL   1-412-317-6671
Replay Pin Number:  3002923

A replay will also be available for 90 days on Nova’s website at http://ir.novami.com.

About Nova: Nova is a leading innovator and key provider of metrology solutions for advanced process control used in semiconductor manufacturing. Nova delivers continuous innovation by providing 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, provides its customers with deep insight into the development and production of the most advanced semiconductor devices. Nova’s unique capability to deliver innovative X-ray and Optical solutions enable its customers to improve performance, enhance product 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.novami.com.

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

This press release provides financial measures that exclude amortization of acquired intangible assets, stock-based compensation expenses, facilities transition costs, revaluation of long-term liabilities and tax effect of non-GAAP 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, but are not limited to, anticipated growth opportunities and projections about our business and its future revenues, expenses 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. Factors that may affect our results, performance, circumstances or achievements include, but are not limited to, the following: our dependency on three product lines; our dependency on a small number of large customers and small number of suppliers; the highly cyclical and competitive nature of the markets we target and we operate in; 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 PEMs; 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 our manufacturing facilities; risks related to changes in our order backlog; risks related to efforts to complete and integrate current and/or future acquisitions; risks related to the worldwide financial instabilities; risks related to our intellectual property; new product offerings from our competitors; unanticipated manufacturing or supply problems; risks related to government programs we participate in; risks related to taxation; changes in customer demand for our products; risks related to currency fluctuations; risks related to technology security threats and changes in privacy laws; risks related to acquisitions we may pursue 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, 2018 filed with the Securities and Exchange Commission on February 28, 2019. 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.

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands) – (Unaudited)

 

 

As of

ASSETS

 

March 31,
 
2019

 

December 31,
 
2018

 

Current assets

 

 

 

 

 

    Cash and cash equivalents

 

36,134

 

22,877

 

     Short-term interest-bearing bank deposits

 

155,323

 

152,951

 

     Trade accounts receivable

 

46,921

 

53,531

 

     Inventories

 

45,631

 

41,786

 

     Other current assets

 

10,359

 

10,961

 

 

 

 

 

 

 

Total current assets

 

294,368

 

282,106

 

 

 

 

 

 

 

Long-term assets

 

 

 

 

 

     Long-term interest-bearing bank deposits

 

2,000

 

2,000

 

     Deferred tax assets

 

4,070

 

3,873

 

     Severance pay funds

 

1,436

 

1,394

 

     Property and equipment, net

 

15,025

 

13,756

 

     Identifiable intangible assets, net

 

9,530

 

10,187

 

     Operating lease right-of-use assets

 

27,826

 

 

     Goodwill

 

20,114

 

20,114

 

 

 

 

 

 

 

Total long-term assets

 

80,001

 

51,324

 

 

 

 

 

 

 

Total assets

 

374,369

 

333,430

 

LiabIlities and shareholders’ Equity

 

 

 

 

 

Current liabilities

 

 

 

 

 

     Trade accounts payable

 

22,319

 

19,015

 

     Deferred revenues

 

5,118

 

3,984

 

     Operating lease current liabilities

 

3,236

 

 

     Other current liabilities

 

23,239

 

25,079

 

 

 

 

 

 

 

Total current liabilities

 

53,912

 

48,078

 

 

 

 

 

 

 

Long-term liabilities

 

 

 

 

 

     Liability for employee severance pay

 

2,329

 

2,254

 

     Operating lease long-term liabilities

 

25,697

 

 

     Other long-term liabilities

 

2,422

 

2,358

 

 

 

 

 

 

 

Total long-term liabilities

 

30,448

 

4,612

 

 

 

 

 

 

 

Shareholders’ equity

 

290,009

 

280,740

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

374,369

 

333,430

 

 

NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

 

 

 

Three months ended

 

 

March 31,

2019

 

March 31,

2018

 

 

 

 

 

Revenues:

 

 

 

 

     Products

 

44,061

 

50,185

    Services

 

12,596

 

12,418

Total revenues

 

56,657

 

62,603

 

 

 

 

 

Cost of revenues:

 

 

 

 

     Products

 

17,577

 

17,969

     Services

 

7,496

 

8,277

Total cost of revenues

 

25,073

 

26,246

 

 

 

 

 

Gross profit

 

31,584

 

36,357

 

 

 

 

 

Operating expenses:

 

 

 

 

     Research and development expenses, net

 

12,584

 

11,226

     Sales and marketing expenses

 

7,146

 

6,231

     General and administrative expenses

 

2,522

 

2,230

     Amortization of acquired intangible assets

 

656

 

653

Total operating expenses

 

22,908

 

20,340

 

 

 

 

 

Operating income

 

8,676

 

16,017

 

 

 

 

 

     Financing income, net

 

510

 

448

 

 

 

 

 

Income before tax on income

 

9,186

 

16,465

 

 

 

 

 

      Income tax expenses

 

1,430

 

2,385

 

 

 

 

 

Net income for the period

 

7,756

 

14,080

 

 

 

 

 

Earnings per share:

 

 

 

 

     Basic

 

0.28

 

0.50

    Diluted

 

0.27

 

0.49

 

 

 

 

 

Shares used for calculation of earnings per share:

 

 

 

 

 

 

 

 

 

     Basic

 

27,932

 

27,915

     Diluted

 

28,580

 

28,739

 

NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands) – (Unaudited)

 

 

Three months ended

 

 

 

March 31,

2019

 

March 31,

2018

 

Cash flows from operating activities:

 

 

 

 

 

Net income for the period

 

7,756

 

14,080

 

Adjustments to reconcile net income to net cash
provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

2,700

 

1,568

 

Amortization of deferred stock-based compensation

 

1,212

 

834

 

Decrease (increase) in liability for employee termination benefits, net

 

33

 

(41)

 

Deferred tax assets, net

 

(197)

 

(136)

 

Decrease in trade accounts receivable

 

6,610

 

3,567

 

Increase in inventories

 

(4,532)

 

(4,475)

 

Decrease in other current assets

 

602

 

1,506

 

Increase in trade accounts payable

 

3,304

 

2,353

 

Decrease in other current liabilities and other long-term liabilities

 

(1,122)

 

(2,684)

 

Increase (decrease) in short term deferred revenues

 

1,134

 

(4,369)

 

 

 

 

 

 

 

Net cash provided by operating activities

 

17,500

 

12,203

 

 

 

 

 

 

 

Cash flow from investment activities:

 

 

 

 

 

Increase in short-term and long-term interest-bearing bank deposits

 

(2,372)

 

*(10,808)

 

Additions to property and equipment

 

(1,977)

 

(361)

 

 

 

 

 

 

 

Net cash used in investment activities

 

(4,349)

 

*(11,169)

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Shares issued under employee stock-based plans

 

106

 

87

 

 

 

 

 

 

 

Net cash provided by financing activities

 

106

 

87

 

 

 

 

 

 

 

Increase in cash and cash equivalents and restricted cash

 

13,257

 

*1,121

 

Cash and cash equivalents and restricted cash – beginning of period

 

24,877

 

*28,447

 

Cash and cash equivalents and restricted cash – end of period

 

38,134

 

*29,568

 

 

 

 

 

 

 

Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheet

 

 

 

 

 

Cash and cash equivalents

 

36,134

 

28,468

 

Restricted cash included in Long-term interest-bearing bank deposits

 

2,000

 

1,100

 

Total cash, cash equivalents, and restricted cash

 

38,134

 

29,568

 

*Reclassified

 

NOVA MEASURING INSTRUMENTS LTD.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(U.S. dollars in thousands, except percentage and per share data) – (Unaudited)

 

 

Three months ended

 

 

March 31,
2019

 

December 31,
2018

 

March 31,
2018

GAAP gross profit

31,584

 

35,710

 

36,357

     Stock-based compensation expenses

234

 

269

 

171

     Facilities transition costs

212

 

– 

 

– 

Non-GAAP gross profit

32,030

 

35,979

 

36,528

GAAP gross margin as a percentage of revenues

56%

 

57%

 

58%

Non-GAAP gross margin as a percentage of revenues

57%

 

57%

 

58%

 

 

 

 

 

 

GAAP operating income

8,676

 

15,054

 

16,017

     Stock-based compensation expenses

1,212

 

1,245

 

834

     Amortization of acquired intangible assets

656

 

654

 

653

     Facilities transition costs

614

 

– 

 

– 

Non-GAAP operating income

11,158

 

16,953

 

17,504

GAAP operating margin as a percentage of revenues

15%

 

24%

 

26%

Non-GAAP operating margin as a percentage of revenues

20%

 

27%

 

28%

 

 

 

 

 

 

GAAP net income

7,756

 

15,152

 

14,080

     Stock-based compensation expenses

1,212

 

1,245

 

834

     Amortization of acquired intangible assets

656

 

654

 

653

     Facilities transition costs

614

 

– 

 

– 

     Revaluation of long-term liabilities

484

 

– 

 

– 

     Tax effect of non-GAAP adjustments

(273)

 

(137)

 

(137)

Non-GAAP net income

10,449

 

16,914

 

15,430

 

 

 

 

 

 

GAAP basic earnings per share

0.28

 

0.54

 

0.50

Non-GAAP basic earnings per share

0.37

 

0.60

 

0.55

 

 

 

 

 

 

GAAP diluted earnings per share

0.27

 

0.53

 

0.49

Non-GAAP diluted earnings per share

0.37

 

0.59

 

0.54

 

 

 

 

 

 

Shares used for calculation of earnings per share:

 

 

 

 

 

    Basic

27,932

 

28,026

 

27,915

    Diluted

28,580

 

28,655

 

28,739

 

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 Contact:
Miri Segal
MS-IR LLC
Tel: +917-607-8654
E-mail: msegal@ms-ir.com
Nova