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Investors Press Releases

Nova Reports Fourth Quarter and Full Year 2020 Results

Rehovot, Israel, February 18, 2021

REHOVOT, Israel, Feb. 18, 2021 /PRNewswire/ — Nova (Nasdaq: NVMI) today announced financial results for the fourth quarter and full year 2020.

Fourth Quarter 2020 Highlights:

  • Quarterly record revenue of $76.3 million, up 18% year-over-year
  • GAAP net income of $13.7 million, or $0.47 per diluted share, up 9% year-over-year on a per-share basis
  • Non-GAAP net income of $15.9 million, or $0.55 per diluted share, up 8% year-over-year on a per-share basis
  • Initial revenues recognized from multiple customers for Nova ELIPSON™, a newly launched materials metrology solution
  • Record quarterly materials metrology revenue, driven by expansion into leading Logic and Foundry customers

Full Year 2020 Highlights:

  • Record annual revenue of $269.4 million, up 20% year-over-year
  • GAAP net income of $47.9 million, or $1.65 per diluted share, up 35% year-over-year on a per-share basis
  • Non-GAAP net income of $59.6 million, or $2.06 per diluted share, up 30% year-over-year on a per-share basis

 

GAAP Results ($K)

 

Q4 2020

Q3 2020

Q4 2019

FY 2020

FY 2019

Revenues

$76,303

$69,485

$64,625

$269,396

$224,909

Net Income

$13,657

$13,896

$12,385

$47,907

$35,171

Earnings per Diluted Share

$0.47

$0.48

$0.43

$1.65

$1.23

NON-GAAP Results ($K)

 

Q4 2020

Q3 2020

Q4 2019

FY 2020

FY 2019

Net Income

$15,872

$16,511

$14,561

$59,638

$45,523

Earnings per Diluted Share

$0.55

$0.57

$0.51

$2.06

$1.59

 

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, expense related to a transaction made by a financial institution without Company authorization, facilities transition costs, revaluation of operating lease liabilities, amortization of debt discount and issuance costs and tax effect of non-GAAP adjustment.

Management Comments

“Our robust fourth quarter financial results concluded a record year for Nova, demonstrating the company’s growing agility and outstanding execution capabilities,” commented Eitan Oppenhaim, President and Chief Executive Officer. “This was a firm conclusion to a well-performed year during which we continued to innovate and expand our differentiated portfolio to support our customers’ new generation of devices. Our resilience amid the pandemic, led by our global teams, drove our strong performance throughout the year. With our new enhanced product offering and solid market position, we enter 2021 with substantial momentum to continue our growth across customers and territories.”

2021 First Quarter Financial Outlook

Management provided an outlook for the first quarter, the period ending March 31, 2021. Based on current estimates, management expects:

  • $76 million to $83 million in revenue
  • $0.41 to $0.53 in diluted GAAP EPS
  • $0.55 to $0.66 in diluted non-GAAP EPS

2020 Fourth Quarter Results

Total revenues for the fourth quarter of 2020 were $76.3 million, an increase of 9.8% compared with the third quarter of 2020 and an increase of 18.1% compared with the fourth quarter of 2019.

Gross margin for the fourth quarter of 2020 was 55.5%, compared with a gross margin of 57.1% in the third quarter of 2020, and compared with a gross margin of 53.6% in the fourth quarter of 2019.

Operating expenses in the fourth quarter of 2020 were $25.5 million, compared with $24.1 million in the third quarter of 2020 and compared with $20.1 million in the fourth quarter of 2019.

On a GAAP basis, the Company reported net income of $13.7 million, or $0.47 per diluted share, in the fourth quarter of 2020. This is compared with net income of $13.9 million, or $0.48 per diluted share, in the third quarter of 2020, and compared with net income of $12.4 million, or $0.43 per diluted share, in the fourth quarter of 2019.

On a non-GAAP basis, which excludes amortization of acquired intangible assets, stock-based compensation expenses, one-time expense related to a transaction made by a financial institution without Company authorization, facilities transition costs, revaluation of operating lease liabilities, amortization of debt discount and issuance costs and tax effect of non-GAAP adjustment, the Company reported net income of $15.9 million, or $0.55 per diluted share, in the fourth quarter of 2020. This is compared with net income of $16.5 million, or $0.57 per diluted share, in the third quarter of 2020, and compared with net income of $14.6 million, or $0.51 per diluted share, in the fourth quarter of 2019.

2020 Full Year Results

Total revenues for 2020 were $269.4 million, an increase of 19.8% compared to total revenues of $224.9 million for 2019.

Gross margin in 2020 was 56.8%, compared with gross margin of 54.2% in 2019.

Operating expenses in 2020 were $97.4 million, compared with operating expenses of $85.4 in 2019.

On a GAAP basis, the Company reported net income of $47.9 million, or $1.65 per diluted share, in 2020. This is compared with a net income of $35.2 million, or $1.23 per diluted share, in 2019.

On a non-GAAP basis, which excludes amortization of acquired intangible assets, stock-based compensation expenses, one-time expense related to a transaction made by a financial institution without Company authorization, facilities transition costs, revaluation of operating lease liabilities, amortization of debt discount and issuance costs and tax effect of non-GAAP adjustment, the Company reported net income of $59.6 million, or $2.06 per diluted share, in 2020. This is compared with net income of $45.5 million, or $1.59 per diluted share, in 2019.

Conference Call Information

Nova will host a conference call today, February 18, 2021, 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: 1340079

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 February 18, 2021 at 12 p.m. Eastern Time to February 25, 2021 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: 1340079

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 enables 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, expense related to a transaction made by a financial institution without Company authorization, facilities transition costs, revaluation of operating lease liabilities, amortization of debt discount and issuance costs and tax effect of non-GAAP adjustment, as applicable, 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 enhance 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 allow 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 December 31,

ASSETS

 

2020

 

2019

Current assets

       

Cash and cash equivalents

 

232,304

 

31,748

Short-term interest-bearing bank deposits

 

191,567

 

154,533

Trade accounts receivable, net

 

63,314

 

51,603

Inventories

 

61,734

 

48,362

Other current assets

 

9,782

 

16,685

         

Total current assets

 

558,701

 

302,931

         

Non-current assets

       

Interest-bearing bank deposits

 

2,547

 

2,813

Restricted interest-bearing bank deposits

 

1,476

 

2,000

Deferred tax assets

 

2,869

 

4,554

Other long-term assets

 

462

 

437

Severance pay funds

 

1,281

 

1,210

Operating lease right-of-use assets

 

29,109

 

28,256

Property and equipment, net

 

34,168

 

30,566

Intangible assets, net

 

5,059

 

7,562

Goodwill

 

20,114

 

20,114

         

Total non-current assets

 

97,085

 

97,512

         

Total assets

 

655,786

 

400,443

         

 LIABILITIES AND SHAREHOLDERS’ EQUITY 

       

Current liabilities

       

Trade accounts payable

 

24,096

 

20,706

Deferred revenues

 

4,717

 

2,256

Operating lease current liabilities

 

3,703

 

2,777

Other current liabilities

 

28,418

 

20,493

         

Total current liabilities

 

60,934

 

46,232

         

Non-current liabilities

       

Convertible senior notes, net

 

178,808

 

Accrued severance pay

 

3,719

 

3,294

Operating lease long-term liabilities

 

31,905

 

30,536

Other long-term liability

 

8,882

 

5,842

         

Total non-current liabilities

 

223,314

 

39,672

         

Shareholders’ equity

 

371,538

 

314,539

         

Total liabilities and shareholders’ equity

 

655,786

 

400,443

 

 

NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

 
 

Three months ended

December 31,

 

Year ended

December 31,

 

2020

 

2019

 

2020

 

2019

               

Revenues:

             

Products

61,741

 

47,015

 

209,320

 

167,200

Services

14,562

 

17,610

 

60,076

 

57,709

Total revenues

76,303

 

64,625

 

269,396

 

224,909

               

Cost of revenues:

             

Products

22,633

 

18,854

 

78,555

 

67,300

Services

11,347

 

11,138

 

37,918

 

35,789

Total cost of revenues

33,980

 

29,992

 

116,473

 

103,089

               

Gross profit

42,323

 

34,633

 

152,923

 

121,820

               

Operating expenses:

             

Research and development, net

15,753

 

9,722

 

53,015

 

44,508

Sales and marketing

8,089

 

7,270

 

29,321

 

28,213

General and administrative

1,009

 

2,502

 

12,514

 

10,066

Amortization of acquired intangible assets

626

 

656

 

2,503

 

2,625

Total operating expenses

25,477

 

20,150

 

97,353

 

85,412

               

Operating income

16,846

 

14,483

 

55,570

 

36,408

               

Financing income (expense), net

(1,335)

 

826

 

926

 

3,078

               

Income before tax on income

15,511

 

15,309

 

56,496

 

39,486

               

Income tax expenses

1,854

 

2,924

 

8,589

 

4,315

               

Net income for the period

13,657

 

12,385

 

47,907

 

35,171

               

Earnings per share:

             

Basic

0.49

 

0.44

 

1.71

 

1.26

Diluted

0.47

 

0.43

 

1.65

 

1.23

               

Shares used for calculation of earnings per share

 

 (in thousands):

 

             

Basic

28,146

 

27,965

 

28,097

 

27,895

Diluted

28,999

 

28,689

 

28,950

 

28,574

 

 

 

NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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

 
 

Three months ended

December 31,

 

Year ended

December 31,

 

2020

 

2019

 

2020

 

2019

Cash flows from operating activities:

             

Net income for the period

13,657

 

12,385

 

47,907

 

35,171

               

Adjustments to reconcile net income to net cash

provided by operating activities:

             

Depreciation and amortization

2,596

 

1,086

 

9,729

 

10,398

Share-based compensation

2,231

 

1,430

 

6,949

 

5,092

Net effect of exchange rate fluctuation

(1,187)

 

(106)

 

(1,584)

 

(510)

Amortization of debt discount and issuance costs

868

 

 

868

 

Change in deferred tax assets, net

535

 

73

 

(193)

 

(681)

Change in accrued severance pay, net

162

 

100

 

354

 

470

Change in trade accounts receivable

(22,217)

 

(4,549)

 

(11,711)

 

1,928

Change in inventories

(1,219)

 

1,669

 

(16,271)

 

(7,518)

Change in other current and long-term assets

1,655

 

(1,561)

 

6,878

 

(6,161)

Change in trade accounts payable

1,228

 

2,117

 

3,255

 

1,691

Change in other current and long-term liabilities

7,241

 

4,190

 

11,611

 

2,540

Change in short term deferred revenues

926

 

(1,459)

 

2,461

 

(1,728)

               

Net cash provided by operating activities

6,476

 

15,375

 

60,253

 

40,692

               

Cash flow from investment activities:

             

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

10,125

 

(4,392)

 

(36,016)

 

(4,181)

Purchase of property and equipment

(1,570)

 

(5,648)

 

(6,443)

 

(21,269)

               

Net cash provided by (used in) investment activities

8,555

 

(10,040)

 

(42,459)

 

(25,450)

               

Cash flows from financing activities:

             

Proceeds from the issuance of convertible senior notes,
net of issuance costs

193,588

 

 

193,588

 

Purchases of treasury shares

(10,000)

 

 

(12,549)

 

(7,159)

Shares issued upon exercise of options

 

125

 

367

 

492

               

Net cash provided by (used in) financing activities

183,588

 

125

 

181,406

 

(6,667)

               

Effect of exchange rate fluctuations on cash and cash
equivalents

972

 

68

 

1,356

 

296

               

Increase in cash and cash equivalents

199,591

 

5,528

 

200,556

 

8,871

Cash and cash equivalents – beginning of period

32,713

 

26,220

 

31,748

 

22,877

Cash and cash equivalents – end of period

232,304

 

31,748

 

232,304

 

31,748

               

 

 

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

 

December 31,

 

2020

 

 

September 30,

 

2020

 

 

December 31,

 

2019

 

GAAP gross profit

42,323

 

39,657

 

34,633

Stock-based compensation expenses *

415

 

414

 

269

Non-GAAP gross profit

42,738

 

40,071

 

34,902

GAAP gross margin as a percentage of revenues

55%

 

57%

 

54%

Non-GAAP gross margin as a percentage of revenues

56%

 

58%

 

54%

           

GAAP operating income

16,846

 

15,528

 

14,483

Stock-based compensation expenses *

2,231

 

1,946

 

1,430

Amortization of acquired intangible assets

626

 

625

 

656

One-time income related to a transaction made by a
financial institution without Company authorization

(2,850)

 

 

Non-GAAP operating income

16,853

 

18,099

 

16,569

GAAP operating margin as a percentage of revenues

22%

 

22%

 

22%

Non-GAAP operating margin as a percentage of revenues

22%

 

26%

 

26%

           

GAAP net income

13,657

 

13,896

 

12,385

Stock-based compensation expenses *

2,231

 

1,946

 

1,430

Amortization of acquired intangible assets

626

 

625

 

656

Amortization of debt discount and issuance costs

868

 

 

One-time income related to a transaction made by a
financial institution without Company authorization

(2,850)

 

 

Revaluation of operating lease liabilities

1,364

 

161

 

269

Tax effect of non-GAAP adjustments

(24)

 

(117)

 

(179)

Non-GAAP net income

15,872

 

16,511

 

14,561

           

GAAP basic earnings per share

0.49

 

0.49

 

0.44

Non-GAAP basic earnings per share

0.56

 

0.59

 

0.52

           

GAAP diluted earnings per share

0.47

 

0.48

 

0.43

Non-GAAP diluted earnings per share

0.55

 

0.57

 

0.51

           

Shares used for calculation of earnings per share

(in thousands):

         

Basic

28,146

 

28,168

 

27,965

Diluted

28,999

 

29,020

 

28,689

             

* Stock-based compensation expenses for the three months ended December 31, 2020 included in – Cost of revenues
products – 292; Cost of revenues services – 123; Research and development expenses, net – 904; Sales and marketing
expenses – 449; General and administrative expenses – 463

 

 

NOVA MEASURING INSTRUMENTS LTD.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

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

 
 

Year ended December 31,

 

2020

 

2019

GAAP gross profit

152,923

 

121,820

Stock-based compensation expenses *

1,364

 

1,003

Facilities transition costs

 

703

Non-GAAP gross profit

154,287

 

123,526

GAAP gross margin as a percentage of revenues

57%

 

54%

Non-GAAP gross margin as a percentage of revenues

57%

 

55%

       

GAAP operating income

55,570

 

36,408

Stock-based compensation expenses *

6,949

 

5,092

Amortization of acquired intangible assets

2,503

 

2,625

One-time expense related to a transaction made by a
financial institution without Company authorization,
net

150

 

Facilities transition costs

 

2,329

Non-GAAP operating income

65,172

 

46,454

GAAP operating margin as a percentage of revenues

21%

 

16%

Non-GAAP operating margin as a percentage of revenues

24%

 

21%

       

GAAP net income

47,907

 

35,171

Stock-based compensation expenses *

6,949

 

5,092

Amortization of acquired intangible assets

2,503

 

2,625

Amortization of debt discount and issuance costs

868

 

One-time expense related to a transaction made by a
financial institution without Company authorization,
net

150

 

Facilities transition costs

 

2,329

Revaluation of operating lease liabilities

2,053

 

1,410

Tax effect of non-GAAP adjustments

(792)

 

(1,104)

Non-GAAP net income

59,638

 

45,523

       

GAAP basic earnings per share

1.71

 

1.26

Non-GAAP basic earnings per share

2.12

 

1.63

       

GAAP diluted earnings per share

1.65

 

1.23

Non-GAAP diluted earnings per share

2.06

 

1.59

       

Shares used for calculation of earnings per share

(in thousands):

     

Basic

28,097

 

27,895

Diluted

28,950

 

28,574

 

* Stock-based compensation expenses for the year ended December 31, 2020 included in – Cost of revenues products –
927; Cost of revenues services – 437; Research and development expenses, net – 2,556; Sales and marketing expenses
– 1,531; General and administrative expenses – 1,498

 

 

 

 

NOVA MEASURING INSTRUMENTS LTD.

SUPPLEMENTAL INFORMATION – RECONCILIATION OF FISRT QUARTER 2021

GAAP TO NON-GAAP GUIDANCE

(Unaudited)

 
 

Low

 

High

Estimated GAAP net income per diluted share

0.41

 

0.53

Estimated non-GAAP items:

     

Stock-based compensation expenses

0.09

 

0.09

Amortization of acquired intangible assets

0.02

 

0.02

Amortization of debt discount and issuance costs

0.04

 

0.04

Tax effect of non-GAAP adjustments

(0.01)

 

(0.02)

Estimated non-GAAP net income per diluted share

0.55

 

0.66

 

 

Company Contact:
Dror David, Chief Financial Officer
Nova Measuring Instruments Ltd.
Tel: +972-73-229-5760
E-mail: info@novami.com
HTTPS://www.novami.com

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