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Investors Press Releases

Nova Reports Second Quarter 2020 Results

Rehovot, Israel, August 4, 2020

REHOVOT, Israel, Aug. 4, 2020 /PRNewswire/ — Nova (Nasdaq: NVMI) today announced financial results for the second quarter 2020, the period ended June 30, 2020.

Second Quarter 2020 Highlights:

  • Quarterly revenue of $62.6 million, meeting guidance of $58 million to $66 million
  • GAAP net income of $8.7 million, or $0.30 per diluted share, meeting guidance of $0.29 to $0.43 per share
  • Non-GAAP net income of $13.8 million, or $0.48 per diluted share, meeting guidance of $0.37 to $0.51 per share
  • Balanced revenue mix with five major customers contributing over 10% each to the geographically diverse product revenue
  • Record quarterly integrated metrology revenues, driven by growing demand for advanced integrated solutions across different technology nodes

 

GAAP Results ($K)

 

Q2 2020

Q1 2020

Q2 2019

Revenues

$62,586

$61,022

$51,120

Net Income

$8,672

$11,682

$6,468

Earnings per Diluted Share

$0.30

$0.41

$0.23

NON-GAAP Results ($K)

 

Q2 2020

Q1 2020

Q2 2019

Net Income

$13,774

$13,481

$9,007

Earnings per Diluted Share

$0.48

$0.47

$0.32

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 long-term liabilities and tax effect of non-GAAP adjustments.

Management Comments

“Our second quarter results met our expectations and Company guidance, highlighting our ability to successfully navigate through the dynamic global environment caused by the COVID-19 pandemic. The success of our decisive actions to secure our supply chain and production capabilities, while ensuring business continuity, is evident in our achievements this quarter. During the second quarter, we continued to execute well and achieved important milestones in our new product rollout plans with several leading customers,” stated Eitan Oppenhaim, President and Chief Executive Officer. “Despite various market uncertainties, we remain focused on the Company’s growth as we leverage the current steady demand for our products.”

2020 Third Quarter Financial Outlook

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

  • $58 million to $66 million in revenue
  • $0.25 to $0.39 in diluted GAAP EPS
  • $0.34 to $0.47 in diluted non-GAAP EPS

2020 Second Quarter Results

Total revenues for the second quarter of 2020 were $62.6 million, an increase of 2.6% compared with the first quarter of 2020 and an increase of 22.4% compared with the second quarter of 2019.

Gross margin for the second quarter of 2020 was 58.5%, compared with a gross margin of 56.3% in the first quarter of 2020, and compared with a gross margin of 55.0% in the second quarter of 2019.

Operating expenses in the second quarter of 2020 were $26.3 million, compared with $21.5 million in the first quarter of 2020 and compared with $21.3 million in the second quarter of 2019.

On a GAAP basis, the Company reported net income of $8.7 million, or $0.30 per diluted share, in the second quarter of 2020. This is compared with net income of $11.7 million, or $0.41 per diluted share, in the first quarter of 2020, and compared with net income of $6.5 million, or $0.23 per diluted share, in the second 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 long-term liabilities and tax effect of non-GAAP adjustments, the Company reported net income of $13.8 million, or $0.48 per diluted share, in the second quarter of 2020. This is compared with net income of $13.5 million, or $0.47 per diluted share, in the first quarter of 2020, and compared with net income of $9.0 million, or $0.32 per diluted share, in the second quarter of 2019.

 

Conference Call Information

Nova will host a conference call today, August 4, 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: 8576081

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 August 4, 2020 at 12 p.m. Eastern Time to August 11, 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: 8576081

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 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

 

June 30,

2020 

 

December 31,

2019

 

Current assets

         

Cash and cash equivalents

 

25,885

 

31,748

 

Short-term interest-bearing bank deposits

 

187,535

 

154,533

 

Trade accounts receivable

 

44,457

 

51,603

 

Inventories

 

56,584

 

48,362

 

Other current assets

 

12,383

 

17,122

 
           

Total current assets

 

326,844

 

303,368

 
           

Non-current assets

         

Interest-bearing bank deposits

 

2,804

 

2,813

 

Restricted interest-bearing bank deposits

 

2,000

 

2,000

 

Deferred tax assets

 

5,100

 

4,554

 

Severance pay funds

 

1,181

 

1,210

 

Right of-use assets

 

27,555

 

28,256

 

Property and equipment, net

 

31,489

 

30,566

 

Intangible assets, net

 

6,310

 

7,562

 

Goodwill

 

20,114

 

20,114

 
           

Total non-current assets

 

96,553

 

97,075

 
           

Total assets

 

423,397

 

400,443

 


 LIABILITIES AND SHAREHOLDERS’ EQUITY

         

Current liabilities

         

Trade accounts payable

 

21,716

 

20,706

 

Deferred revenues

 

1,165

 

2,256

 

Operating lease current liabilities

 

1,935

 

2,236

 

Other current liabilities

 

23,161

 

21,751

 
           

Total current liabilities

 

47,977

 

46,949

 
           

Non-current liabilities

         

Accrued severance pay

 

2,119

 

2,120

 

Operating lease long-term liabilities

 

30,891

 

31,077

 

Other long-term liability

 

6,448

 

5,758

 
           

Total non-current liabilities

 

39,458

 

38,955

 
           

Shareholders’ equity

 

335,962

 

314,539

 
           

Total liabilities and shareholders’ equity 

 

423,397

 

400,443

 

 

 

 

NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

 
 

Three months ended

 

Six months ended

 

June 30,

 2020

 

June 30,

 2019

 

June 30,

 2020

 

June 30,

 2019

               

Revenues:

             

Products

47,097

 

37,401

 

92,822

 

81,462

Services

15,489

 

13,719

 

30,786

 

26,315

Total revenues

62,586

 

51,120

 

123,608

 

107,777

               

Cost of revenues:

             

Products

17,150

 

14,527

 

35,190

 

32,104

Services

8,835

 

8,483

 

17,475

 

15,979

Total cost of revenues

25,985

 

23,010

 

52,665

 

48,083

               

Gross profit

36,601

 

28,110

 

70,943

 

59,694

               

Operating expenses:

             

Research and development expenses, net

12,622

 

11,654

 

24,305

 

24,238

Sales and marketing expenses

7,263

 

6,641

 

13,826

 

13,787

General and administrative expenses

5,775

 

2,384

 

8,364

 

4,906

Amortization of acquired intangible assets

626

 

656

 

1,252

 

1,312

Total operating expenses

26,286

 

21,335

 

47,747

 

44,243

               

Operating income

10,315

 

6,775

 

23,196

 

15,451

               

Financing income, net

387

 

855

 

1,415

 

1,365

               

Income before tax on income

10,702

 

7,630

 

24,611

 

16,816

               

Income tax expenses

2,030

 

1,162

 

4,257

 

2,592

               

Net income for the period

8,672

 

6,468

 

20,354

 

14,224

               

Earnings per share:

             

Basic

0.31

 

0.23

 

0.73

 

0.51

Diluted

0.30

 

0.23

 

0.70

 

0.50

               

Shares used for calculation of earnings per share:

             

Basic

28,039

 

27,869

 

28,037

 

27,898

Diluted

28,888

 

28,564

 

28,890

 

28,234

 

 

 

NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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

 
 

Three months ended

 

Six months ended

 

June 30,

2020

 

June 30,

2019

 

June 30,

2020

 

June 30,

2019

Cash flows from operating activities:

             

Net income for the period

8,672

 

6,468

 

20,354

 

14,224


Adjustments to reconcile net income to net cash
provided by (used in) operating activities:

             

Depreciation and amortization

2,039

 

2,770

 

4,783

 

5,470

Share-based compensation

1,454

 

1,086

 

2,772

 

2,298

Change in deferred tax assets, net

(345)

 

(147)

 

(546)

 

(344)

Change in accrued severance pay, net

42

 

(6)

 

28

 

27

Change in trade accounts receivable

10,586

 

(1,157)

 

7,146

 

5,453

Change in inventories

(7,022)

 

(3,323)

 

(8,470)

 

(7,855)

Change in other current and long-term assets

1,046

 

1,978

 

4,739

 

2,580

Change in trade accounts payable

2,920

 

(5,430)

 

665

 

(2,126)

Change in other current and long-term liabilities

1,140

 

(3,457)

 

2,206

 

(4,579)

Change in short term deferred revenues

(1,437)

 

196

 

(1,091)

 

1,330

               

Net cash provided by (used in) operating activities

19,095

 

(1,022)

 

32,586

 

16,478

               

Cash flow from investment activities:

             

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

(25,458)

 

8,447

 

(32,993)

 

6,075

Purchase of property and equipment

(890)

 

(5,716)

 

(3,160)

 

(7,693)

               

Net cash provided by (used in) investment activities

(26,348)

 

2,731

 

(36,153)

 

(1,618)

               

Cash flows from financing activities:

             

Purchases of treasury shares

(2,535)

 

(7,159)

 

(2,549)

 

(7,159)

Shares issued upon exercise of options

142

 

166

 

253

 

272

               

Net cash used in financing activities

(2,393)

 

(6,993)

 

(2,296)

 

(6,887)

               

Increase (decrease) in cash and cash equivalents

(9,646)

 

(5,284)

 

(5,863)

 

7,973

Cash and cash equivalents – beginning of period

35,531

 

38,134

 

31,748

 

24,877

Cash and cash equivalents – end of period

25,885

 

32,850

 

25,885

 

32,850

               

 


 

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

 

June 30,
2020

 

March 31,
2020

 

June 30,
2019

GAAP gross profit

36,601

 

34,342

 

28,110

Stock-based compensation expenses *

279

 

256

 

222

Facilities transition costs

 

 

271

Non-GAAP gross profit

36,880

 

34,598

 

28,603

GAAP gross margin as a percentage of revenues

58%

 

56%

 

55%

Non-GAAP gross margin as a percentage of revenues

59%

 

57%

 

56%

           

GAAP operating income

10,315

 

12,881

 

6,775

Stock-based compensation expenses *

1,454

 

1,318

 

1,086

Amortization of acquired intangible assets

626

 

626

 

656

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

3,000

 

 

Facilities transition costs

 

 

827

Non-GAAP operating income

15,395

 

14,825

 

9,344

GAAP operating margin as a percentage of revenues

16%

 

21%

 

13%

Non-GAAP operating margin as a percentage of revenues

25%

 

24%

 

18%

           

GAAP net income

8,672

 

11,682

 

6,468

Stock-based compensation expenses *

1,454

 

1,318

 

1,086

Amortization of acquired intangible assets

626

 

626

 

656

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

3,000

 

 

Facilities transition costs

 

 

827

Revaluation of long-term liabilities

594

 

(66)

 

295

Tax effect of non-GAAP adjustments

(572)

 

(79)

 

(325)

Non-GAAP net income

13,774

 

13,481

 

9,007

           

GAAP basic earnings per share

0.31

 

0.42

 

0.23

Non-GAAP basic earnings per share

0.49

 

0.48

 

0.32

           

GAAP diluted earnings per share

0.30

 

0.41

 

0.23

Non-GAAP diluted earnings per share

0.48

 

0.47

 

0.32

           

Shares used for calculation of earnings per share:

         

Basic

28,039

 

27,902

 

27,869

Diluted

28,888

 

28,760

 

28,564

             

* Stock-based compensation expenses for the three months ended June 30, 2020 included in – Cost of revenues products – 169; Cost of revenues services – 110; Research and development expenses, net – 604; Sales and marketing expenses – 327; General and administrative expenses – 244

 

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