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Nova Reports Fourth Quarter and Full Year 2021 Results

Rehovot, Israel, February 24, 2022

REHOVOT, Israel, Feb. 24, 2022 /PRNewswire/ — Nova (Nasdaq: NVMI) today announced financial results for the fourth quarter and full year 2021.

 

Fourth Quarter 2021 Highlights:

  • Record quarterly revenue of $121.5 million, up 59% year over year
  • GAAP net income of $22.2 million, or $0.73 per diluted share, up 55% year over year
    on a per-share basis
  • Non-GAAP net income of $32.8 million, or $1.08 per diluted share, up 96% year over year on a per-share basis
  • Revenues recognized from multiple customers for Nova METRION®, a newly launched materials metrology solution
  • VERAFLEX® IV selection with multiple orders by a leading global semiconductor manufacturer
  • Record software revenues, led by Nova’s advanced Nova FIT machine learning solution

Full Year 2021 Highlights:

  • Record annual revenue of $416.1 million, up 54% year over year
  • GAAP net income of $93.1 million, or $3.12 per diluted share, up 89% year over year
    on a per-share basis
  • Non-GAAP net income of $114.7 million, or $3.85 per diluted share, up 87% year over year
    on a per-share basis

 

GAAP Results ($K)

 

Q4 2021

Q3 2021

Q4 2020

FY 2021

FY 2020

Revenues

$121,521

$112,713

$76,303

$416,113

$269,396

Net Income

$22,226

$30,335

$13,657

$93,101

$47,907

Earnings per Diluted Share

$0.73

$1.02

$0.47

$3.12

$1.65

Non-GAAP Results ($K)

 

Q4 2021

Q3 2021

Q4 2020

FY 2021

FY 2020

Net Income

$32,752

$34,546

$15,872

$114,669

$59,638

Earnings per Diluted Share

$1.08

$1.16

$0.55

$3.85

$2.06

A reconciliation between GAAP operating results and non-GAAP operating results is provided following the financial statements that are part of this release. See also “Use of Non-GAAP Adjusted Financial Measures” section.

Management Comments

“We are very pleased with Nova’s strong results for the fourth quarter, which conclude another record year with significant growth in both our product and service revenue. Against the backdrop of the continuous pandemic and its influence on the supply chain, Nova succeeded in outperforming the market, demonstrating the agility and efficiency of its operational model,” commented Eitan Oppenhaim, President and Chief Executive Officer. “Our solid annual results underscore the competitive advantages and differentiated value in the marketplace. In addition to our growing organic engines, Nova expanded its offering this quarter with new advanced chemical metrology capabilities as part of the acquisition of ancosys, a leading German metrology supplier. This strategic transaction extends Nova’s available markets and positions Nova for another growth year in 2022.”

2022 First Quarter Financial Outlook

Management provided an outlook for the first quarter, the period ending March 31, 2022. Based on current estimates, management expects:

  • $122 million to $132 million in revenue
  • $0.78 to $0.96 in diluted GAAP EPS
  • $0.96 to $1.14 in diluted non-GAAP EPS

2021 Fourth Quarter Results

Total revenues for the fourth quarter of 2021 were $121.5 million, an increase of 8% compared with the third quarter of 2021 and an increase of 59% compared with the fourth quarter of 2020.

Gross margin in the fourth quarter of 2021 was 56%, compared with 58% in the third quarter of 2021 and 55% in the fourth quarter of 2020.

Operating expenses in the fourth quarter of 2021 were $38.4 million, compared with $29.7 million in the third quarter of 2021 and $25.5 million in the fourth quarter of 2020.

On a GAAP basis, the Company reported net income of $22.2 million, or $0.73 per diluted share, in the fourth quarter of 2021. This is compared with net income of $30.3 million, or $1.02 per diluted share, in the third quarter of 2021, and net income of $13.7 million, or $0.47 per diluted share, in the fourth quarter of 2020.

On a non-GAAP basis, the Company reported net income of $32.8 million, or $1.08 per diluted share, in the fourth quarter of 2021. This is compared with net income of $34.5 million, or $1.16 per diluted share, in the third quarter of 2021, and net income of $15.9 million, or $0.55 per diluted share, in the fourth quarter of 2020.

2021 Full Year Results

Total revenues for 2021 were $416.1 million, an increase of 54% compared to total revenues of $269.4 million for 2020.

Gross margin in 2021 was 57%, same as 2020.

Operating expenses in 2021 were $125 million, compared with operating expenses of $97.4 million in 2020.

On a GAAP basis, the Company reported net income of $93.1 million, or $3.12 per diluted share, in 2021. This is compared with a net income of $47.9 million, or $1.65 per diluted share, in 2020.

On a non-GAAP basis, the Company reported net income of $114.7 million, or $3.85 per diluted share, in 2021. This is compared with net income of $59.6 million, or $2.06 per diluted share, in 2020.

Conference Call Information

Nova will host a conference call today, February 24, 2022, at 8:30 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: 1-855-327-6837
ISRAEL TOLL-FREE Dial-in Number: 1-809-458-327
INTERNATIONAL Dial-in Number: 1-631-891-4304

At:

8:30 a.m. Eastern Time
5:30 a.m. Pacific Time
3:30 p.m. Israel Time

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 24, 2022, at 11:30 a.m. Eastern Time to March 3, 2022, 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: 10017625

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 material, optical and chemical metrology solutions for advanced process control 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 developing and producing the most advanced semiconductor devices. Nova’s unique capability to deliver innovative 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 worldwide. Additional information may be found at Nova’s website link – https://www.novami.com/.

Nova is traded on Nasdaq & TASE, Nasdaq ticker symbol NVMI.

Use of Non-GAAP Adjusted Financial Measures

This press release provides financial measures that exclude amortization of acquired intangible assets, stock-based compensation expenses, acquisition related expenses, expense related to a transaction made by a financial institution without Company authorization, revaluation of operating lease liabilities, amortization of debt discount and issuance costs, tax effect of non-GAAP adjustment and taxes attributed to one-time elective tax settlement, 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.

Forward-Looking Statements

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 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: catastrophic events such as the outbreak of COVID-19; increased information technology security threats and sophisticated computer crime; foreign political and economic risks; changes in U.S. trade policies; inability to protect intellectual property; open source technology exposure; failure to compete effectively or to respond to the rapid technological changes; consolidation in our industry; difficulty to predict the length and strength of any downturn or expansion period of the market we target; factors that adversely affect the pricing and demand for our product lines; dependency on a small number of large customers; dependency on a single manufacturing facility per product line; dependency on a limited number of suppliers; difficulty to  integrate current or future acquisitions; lengthy sales cycle and customer delays in orders; political, economic, and military instability in Israel; risks related to our convertible notes; currency fluctuations; and quarterly fluctuations in our operating results. 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, 2020 filed with the Securities and Exchange Commission on March 1, 2021. These factors are updated from time to time through the filing of reports and registration statements with the Securities and Exchange Commission. Nova Ltd. does not assume any obligation to update the forward-looking information contained in this press release.

Company Contact:
Dror David, Chief Financial Officer
Tel: +972-73-229-5760
E-mail – investors@novami.com
Nova website link – https://www.novami.com/

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

 

 

NOVA LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands) – (Unaudited)

 
 

As of  December 31,

ASSETS

2021

2020

Current assets

   

Cash and cash equivalents

126,698

232,304

Short-term interest-bearing bank deposits

221,897

191,567

Marketable securities

61,568

Trade accounts receivable, net

68,446

63,314

Inventories

78,665

61,734

Other current assets

9,242

9,782

Total current assets

566,516

558,701

Non-current assets

   

Marketable securities

137,415

Interest-bearing bank deposits

3,672

2,547

Restricted interest-bearing bank deposits

1,600

1,476

Deferred tax assets

6,161

2,869

Severance pay funds

1,327

1,281

Operating lease right-of-use assets

30,627

29,109

Property and equipment, net

34,460

34,168

Intangible assets, net

2,601

5,059

Goodwill

20,114

20,114

Other long-term assets

661

462

Total non-current assets

238,638

97,085

Total assets

805,154

655,786

 LIABILITIES AND SHAREHOLDERS’ EQUITY

   

Current liabilities

   

Convertible senior notes, net

183,037

Trade accounts payable

36,218

24,096

Deferred revenues

15,338

4,717

Operating lease current liabilities

4,452

3,703

Other current liabilities

48,885

28,418

Total current liabilities

287,930

60,934

Non-current liabilities

   

Convertible senior notes, net

178,808

Accrued severance pay

3,686

3,719

Operating lease long-term liabilities

33,450

31,905

Other long-term liabilities

6,334

8,882

Total non-current liabilities

43,470

223,314

Shareholders’ equity

473,754

371,538

Total liabilities and shareholders’ equity 

805,154

655,786

 

 

NOVA 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
,

 

2021

2020

2021

2020

Revenues:

       

Products

99,898

61,741

337,026

209,320

Services

21,623

14,562

79,087

60,076

Total revenues

121,521

76,303

416,113

269,396

Cost of revenues

53,272

33,980

178,752

116,473

Gross profit

68,249

42,323

237,361

152,923

Operating expenses:

       

Research and development, net

20,140

15,753

65,857

53,015

Sales and marketing

11,219

8,089

39,336

29,321

General and administrative

6,262

1,009

17,324

12,514

Amortization of intangible assets

735

626

2,458

2,503

Total operating expenses

38,356

25,477

124,975

97,353

Operating income

29,893

16,846

112,386

55,570

Financing income (expense), net

(1,518)

(1,335)

(3,133)

926

Income before taxes on income

28,375

15,511

109,253

56,496

Income tax expenses

6,149

1,854

16,152

8,589

Net income for the period

22,226

13,657

93,101

47,907

         

Earnings per share:

       

Basic

0.78

0.49

3.28

1.71

Diluted

0.73

0.47

3.12

1.65

         

Shares used in calculation of earnings per share
 (in thousands):

       

Basic

28,539

28,146

28,372

28,097

Diluted

30,285

28,999

29,816

28,950

 

 

 

NOVA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands) – (Unaudited)

 
 

Three months ended December 31,

 

Year ended
December 31,

 

2021

2020

2021

2020

Cash flows from operating activities:

       

Net income

22,226

13,657

93,101

47,907

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

       

     Depreciation of property and equipment

1,681

1,572

6,475

5,875

     Amortization of intangible assets

735

626

2,458

2,503

     Amortization of premium and accretion of discount on marketable securities, net

855

1,708

     Amortization of debt discount and issuance costs

1,075

868

4,229

868

     Share-based compensation

3,496

2,231

10,488

6,949

     Net effect of exchange rate fluctuation

(694)

(1,187)

(745)

(1,584)

Changes in assets and liabilities:

       

     Trade accounts receivables, net

(3,816)

(22,217)

(5,132)

(11,711)

     Inventories

(5,964)

(1,219)

(18,457)

(16,271)

     Other current and long-term assets

1,076

1,655

192

6,878

     Deferred tax assets, net

(741)

535

(2,989)

(193)

     Operating lease right-of-use assets

489

395

1,680

1,351

     Trade accounts payables

6,799

1,228

11,697

3,255

     Deferred revenues

(16,572)

926

10,621

2,461

     Operating lease liabilities

164

1,346

(904)

91

     Other current and long-term liabilities

9,587

5,898

17,919

11,520

     Accrued severance pay, net

(133)

162

(79)

354

Net cash provided by operating activities

20,263

6,476

132,262

60,253

Cash flows from investment activities:

       

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

37,223

10,125

(31,456)

(36,016)

Investment in marketable securities

(6,364)

(215,091)

Proceed from maturities of marketable securities

5,141

12,862

Purchase of property and equipment

(2,250)

(1,570)

(4,816)

(6,443)

Net cash provided by (used in) investing activities

33,750

8,555

(238,501)

(42,459)

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)

Proceeds from exercise of options

11

367

Net cash provided by financing activities

183,588

11

181,406

Effect of exchange rate fluctuations on cash and cash equivalents

558

972

622

1,356

Increase (decrease) in cash and cash equivalents

54,571

199,591

(105,606)

200,556

Cash and cash equivalents – beginning of period

72,127

32,713

232,304

31,748

Cash and cash equivalents – end of period

126,698

232,304

126,698

232,304

 

 

NOVA 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,
2021

September 30,
2021

December 31,
2020

GAAP gross profit

68,249

65,238

42,323

Stock-based compensation*

803

557

415

Non-GAAP gross profit

69,052

65,795

42,738

GAAP gross margin as a percentage of revenues

56%

58%

55%

Non-GAAP gross margin as a percentage of revenues

57%

58%

56%

       

GAAP operating income

29,893

35,526

16,846

Stock-based compensation*

3,496

2,642

2,231

Acquisition related expenses

999

Amortization of acquired intangible assets

735

574

626

Income related to a transaction made by a financial institution without Company authorization

(2,850)

Non-GAAP operating income

35,123

38,742

16,853

GAAP operating margin as a percentage of revenues

25%

32%

22%

Non-GAAP operating margin as a percentage of revenues

29%

34%

22%

       

GAAP net income

22,226

30,335

13,657

Stock-based compensation*

3,496

2,642

2,231

Acquisition related expenses

999

Amortization of acquired intangible assets

735

574

626

Amortization of debt discount and issuance costs

1,075

1,069

868

Income related to a transaction made by a financial institution without Company authorization

(2,850)

Revaluation of operating lease liabilities

907

217

1,364

Tax effect of non-GAAP adjustments

(402)

(291)

(24)

Taxes attributed to one-time elective tax settlement

3,716

Non-GAAP net income

32,752

34,546

15,872

       

GAAP basic earnings per share

0.78

1.07

0.49

Non-GAAP basic earnings per share

1.15

1.22

0.56

       

GAAP diluted earnings per share

0.73

1.02

0.47

Non-GAAP diluted earnings per share

1.08

1.16

0.55

       

Shares used for calculation of earnings per share
(in thousands):

     

Basic

28,539

28,429

28,146

Diluted

30,285

29,858

28,999

         

* Stock-based compensation for the three months ended December 31, 2021, included in – Cost of revenues – 803; Research and development, net – 1,315; Sales and marketing – 717; General and administrative  – 661

 

 

NOVA LTD.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(U.S. dollars in thousands, except percentage and per share data) – (Unaudited)

 
 

Year ended  December 31,

 

2021

2020

GAAP gross profit

237,361

152,923

Stock-based compensation*

2,160

1,364

Non-GAAP gross profit

239,521

154,287

GAAP gross margin as a percentage of revenues

57%

57%

Non-GAAP gross margin as a percentage of revenues

58%

57%

     

GAAP operating income

112,386

55,570

Stock-based compensation*

10,488

6,949

Acquisition related expenses

999

Amortization of acquired intangible assets

2,458

2,503

Expense related to a transaction made by a financial institution without Company authorization

150

Non-GAAP operating income

126,331

65,172

GAAP operating margin as a percentage of revenues

27%

21%

Non-GAAP operating margin as a percentage of revenues

30%

24%

     

GAAP net income

93,101

47,907

Stock-based compensation*

10,488

6,949

Acquisition related expenses

999

Amortization of acquired intangible assets

2,458

2,503

Amortization of debt discount and issuance costs

4,229

868

Expense related to a transaction made by a financial institution without Company authorization

150

Revaluation of operating lease liabilities

818

2,053

Tax effect of non-GAAP adjustments

(1,140)

(792)

Taxes attributed to one-time elective tax settlement

3,716

Non-GAAP net income

114,669

59,638

     

GAAP basic earnings per share

3.28

1.71

Non-GAAP basic earnings per share

4.04

2.12

     

GAAP diluted earnings per share

3.12

1.65

Non-GAAP diluted earnings per share

3.85

2.06

     

Shares used for calculation of earnings per share
(in thousands):

   

Basic

28,372

28,097

Diluted

29,816

28,950

* Stock-based compensation for the year ended December 31, 2021, included in – Cost of revenues – 2,160; Research and development, net – 3,994; Sales and marketing – 2,221; General and administrative  – 2,113

 

 

NOVA LTD.
SUPPLEMENTAL INFORMATION – RECONCILIATION OF FIRST QUARTER 2022
GAAP TO NON-GAAP GUIDANCE

(Unaudited)

 
 

Low

High

Estimated GAAP net income per diluted share

0.78

0.96

Estimated non-GAAP items:

   

Stock-based compensation

0.12

0.12

Acquisition related expenses

0.02

0.02

Amortization of acquired intangible assets

0.06

0.06

Amortization of issuance costs

0.01

0.01

Tax effect of non-GAAP adjustments

(0.03)

(0.03)

Estimated non-GAAP net income per diluted share

0.96

1.14

 

 

 

 

Contact Us

Company Contact:

Dror David, Chief Financial Officer
Tel: +972-73-229-5760
Mail to: investors@novami.com

Nova Website Link – https://www.novami.com/

 

Investor Relations Contact:

Miri Segal
MS-IR LLC
Tel: +917-607-8654
E-mail: Mail to MS-IR