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Investors Press Releases

Nova Reports First Quarter 2020 Results, Exceeds Guidance

Rehovot, Israel, May 14, 2020

Rehovot, Israel, May 14, 2020 Nova (Nasdaq: NVMI) today announced financial results for the first quarter ended March 31st, 2020.

First Quarter 2020 Highlights:

  • Quarterly revenue of $61.0 million, exceeding guidance of $50 million to $60 million.
  • GAAP net income of $11.7 million, or $0.41 per diluted share, exceeding guidance of $0.18 to $0.34 per share.
  • Non-GAAP net income of $13.5 million, or $0.47 per diluted share, exceeding guidance of $0.26 to $0.42 per share.
  • Balanced product revenue mix across Logic/Foundry and Memory.
  • Nova’s optical metrology solutions selected by leading global logic manufacturer for its global logic fabrication sites. Initial revenues were recognized in the first quarter of 2020.

 

GAAP Results ($K)

 

Q1 2020

Q4 2019

Q1 2019

Revenues

$61,022

$64,625

$56,657

Net Income

$11,682

$12,385

$7,756

Earnings per Diluted Share

$0.41

$0.43

$0.27

NON-GAAP Results ($K)

 

Q1 2020

Q4 2019

Q1 2019

Net Income

$13,481

$14,561

$10,449

Earnings per Diluted Share

$0.47

$0.51

$0.37

 

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 performed well this quarter with revenue and profitability exceeding the guidance. These financial results demonstrate our solid execution capabilities as well as our resilient and agile operational model, which allows us to adapt quickly to uncertainties in the market,” commented Eitan Oppenhaim, President and Chief Executive Officer. “Amid the global spread of the pandemic, our focus continues to be on the safety and well-being of our employees and partners. Although the market is still vulnerable, we have already taken the required measures to protect our production lines and supply chain to ensure business continuity throughout the year.”

2020 Second Quarter Financial Outlook

Management provided an outlook for the second quarter, the period ending June 30, 2020. Based on current estimates, management expects:

  • $58 million to $66 million in revenue
  • $0.29 to $0.43 in diluted GAAP EPS
  • $0.37 to $0.51 in diluted non-GAAP EPS

2020 First Quarter Results

Total revenues for the first quarter of 2020 were $61.0 million, a decrease of 6% compared to the fourth quarter of 2019 and an increase of 8% compared to the first quarter of 2019.

Gross margin for the first quarter of 2020 was 56%, compared to a gross margin of 54% in the fourth quarter of 2019, and compared to gross margin of 56% in the first quarter of 2019.

Operating expenses in the first quarter of 2020 were $21.5 million, compared with $20.1 million in the fourth quarter of 2019 and compared with $22.9 million in the first quarter of 2019.

On a GAAP basis, the company reported net income of $11.7 million, or $0.41 per diluted share, in the first quarter of 2020. This is compared with net income of $12.4 million, or $0.43 per diluted share, in the fourth quarter of 2019, and compared with net income of $7.8 million, or $0.27 per diluted share, in the first quarter of 2019.

On a non-GAAP basis, which excludes 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 $13.5 million, or $0.47 per diluted share, in the first quarter of 2020. This is compared with net income of $14.6 million, or $0.51 per diluted share, in the fourth quarter of 2019, and compared with net income of $10.4 million, or $0.37 per diluted share, in the first quarter of 2019.

Conference Call Information

Nova will host a conference call today, May 14, 2020, at 9 a.m. Eastern Time, to discuss the financial results and 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. TOLL-FREE Dial-in Number: 1-866-548-4713
ISRAEL TOLL-FREE Dial-in Number: 1-809-212-883
INTERNATIONAL Dial-in Number: 1-323-794-2093

At:
9 a.m. Eastern Time
6 a.m. Pacific Time
4 p.m. Israel Time

Please reference conference ID: 6871888

The conference call will also be webcast live from a link on Nova’s website at https://www.novami.com/investors/events/.

A replay of the conference call will be available from May 14, 2020 at 12 p.m. Eastern Time to May 21, 2020 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: 6871888

A replay will also be available for 90 days on Nova’s website at https://www.novami.com/investors/events/.

 

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 worldwide financial and economic instabilities, including the implications of the ongoing novel coronavirus (COVID-19) pandemic; 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, including data breaches, cyberattacks and system disruptions, 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, 2019 filed with the Securities and Exchange Commission on March 12, 2020. 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,

2020

 

December 31,

2019

 

Current assets

         

Cash and cash equivalents

 

35,531

 

31,748

 

Short-term interest-bearing bank deposits

 

162,155

 

154,533

 

Trade accounts receivable

 

55,043

 

51,603

 

Inventories

 

49,779

 

48,362

 

Other current assets

 

13,429

 

17,122

 
           

Total current assets

 

315,937

 

303,368

 
           

Non-current assets

         

Interest-bearing bank deposits

 

2,726

 

2,813

 

Restricted interest-bearing bank deposits

 

2,000

 

2,000

 

Deferred tax assets

 

4,755

 

4,554

 

Severance pay funds

 

1,158

 

1,210

 

Right of-use assets

 

27,545

 

28,256

 

Property and equipment, net

 

31,460

 

30,566

 

Intangible assets, net

 

6,936

 

7,562

 

Goodwill

 

20,114

 

20,114

 
           

Total non-current assets

 

96,694

 

97,075

 
           

Total assets

 

412,631

 

400,443

 
           

 LIABILITIES AND SHAREHOLDERS’ EQUITY

         

Current liabilities

         

Trade accounts payable

 

18,451

 

20,706

 

Deferred revenues

 

2,602

 

2,256

 

Operating lease current liabilities

 

2,020

 

2,236

 

Other current liabilities

 

23,220

 

21,751

 
           

Total current liabilities

 

46,293

 

46,949

 
           

Non-current liabilities

         

Accrued severance pay

 

2,054

 

2,120

 

Operating lease long-term liabilities

 

30,370

 

31,077

 

Other long-term liability

 

6,025

 

5,758

 
           

Total non-current liabilities

 

38,449

 

38,955

 
           

Shareholders’ equity

 

327,889

 

314,539

 
           

Total liabilities and shareholders’ equity 

 

412,631

 

400,443

 

 

 

 

NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

 
     

Three months ended

March 31,

         

2020

 

2019

               

Revenues:

             

Products

       

45,725

 

44,061

Services

       

15,297

 

12,596

Total revenues

       

61,022

 

56,657

               

Cost of revenues:

             

Products

       

18,040

 

17,577

Services

       

8,640

 

7,496

Total cost of revenues

       

26,680

 

25,073

               

Gross profit

       

34,342

 

31,584

               

Operating expenses:

             

Research and development, net

       

11,683

 

12,584

Sales and marketing

       

6,563

 

7,146

General and administrative

       

2,589

 

2,522

Amortization of acquired intangible assets

       

626

 

656

Total operating expenses

       

21,461

 

22,908

               

Operating income

       

12,881

 

8,676

               

Financing income, net

       

1,028

 

510

               

Income before taxes on income

       

13,909

 

9,186

               

Income tax expenses

       

2,227

 

1,430

               

Net income for the period

       

11,682

 

7,756

               

Earnings per share:

             

Basic

       

0.42

 

0.28

Diluted

       

0.41

 

0.27

               

Shares used for calculation of earnings per
share:

             
               

Basic

       

27,902

 

27,932

Diluted

       

28,760

 

28,580

 

 

NOVA MEASURING INSTRUMENTS LTD.

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

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

 
   
 

Three months ended

 
   

March 31,

2020

 

March 31,

2019

 

Cash flows from operating activities:

         

Net income for the period

 

11,682

 

7,756

 
           

Adjustments to reconcile net income to net cash

provided by operating activities:

         

Depreciation and amortization

 

2,744

 

2,700

 

Stock-based compensation

 

1,318

 

1,212

 

Change in deferred tax assets, net

 

654

 

(197)

 

Change in accrued severance pay, net

 

(14)

 

33

 

Change in trade accounts receivable

 

(3,440)

 

6,610

 

Change in inventories

 

(1,448)

 

(4,532)

 

Change in other current and long-term assets

 

3,693

 

602

 

Change in trade accounts payable

 

(2,255)

 

3,304

 

Change in other current and long-term liabilities

 

211

 

(1,122)

 

Change in short term deferred revenues

 

346

 

1,134

 
           

Net cash provided by operating activities

 

13,491

 

17,500

 
           

Cash flow from investment activities:

         

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

 

(7,535)

 

(2,372)

 

Purchase of property and equipment

 

(2,270)

 

(1,977)

 
           

Net cash used in investment activities

 

(9,805)

 

(4,349)

 
           

Cash flows from financing activities:

         

Purchases of treasury shares

 

(14)

 

 

Shares issued upon exercise of options

 

111

 

106

 
           

Net cash provided by financing activities

 

97

 

106

 
           

Increase in cash and cash equivalents and restricted cash

 

3,783

 

13,257

 

Cash and cash equivalents – beginning of period

 

31,748

 

24,877

 

Cash and cash equivalents – end of period

 

35,531

 

38,134

 
           

 

 

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,

 

2020

 

 

December 31,

 

2019

 

 

March 31,

 

2019

 

GAAP gross profit

34,342

 

34,633

 

31,584

Stock-based compensation expenses *

256

 

269

 

234

Facilities transition costs

 

 

212

Non-GAAP gross profit

34,598

 

34,902

 

32,030

GAAP gross margin as a percentage of revenues

56%

 

54%

 

56%

Non-GAAP gross margin as a percentage of revenues

57%

 

54%

 

57%

           

GAAP operating income

12,881

 

14,483

 

8,676

Stock-based compensation expenses *

1,318

 

1,430

 

1,212

Amortization of acquired intangible assets

626

 

656

 

656

Facilities transition costs

 

 

614

Non-GAAP operating income

14,825

 

16,569

 

11,158

GAAP operating margin as a percentage of revenues

21%

 

22%

 

15%

Non-GAAP operating margin as a percentage of revenues

24%

 

26%

 

20%

           

GAAP net income

11,682

 

12,385

 

7,756

Stock-based compensation expenses *

1,318

 

1,430

 

1,212

Amortization of acquired intangible assets

626

 

656

 

656

Facilities transition costs

 

 

614

Revaluation of long-term liabilities

(66)

 

269

 

484

Tax effect of non-GAAP adjustments

(79)

 

(179)

 

(273)

Non-GAAP net income

13,481

 

14,561

 

10,449

           

GAAP basic earnings per share

0.42

 

0.44

 

0.28

Non-GAAP basic earnings per share

0.48

 

0.52

 

0.37

           

GAAP diluted earnings per share

0.41

 

0.43

 

0.27

Non-GAAP diluted earnings per share

0.47

 

0.51

 

0.37

           

Shares used for calculation of earnings per share:

         

Basic

27,902

 

27,965

 

27,932

Diluted

28,760

 

28,689

 

28,580

             

* Stock-based compensation expenses for the three months ended March 31, 2020 included in – Cost of revenues
products – 206; Cost of revenues services – 50; Research and development expenses, net – 335; Sales and marketing
expenses – 346; General and administrative expenses – 381.

 

 

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