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Investors Press Releases

Nova Reports Third Quarter 2019 Results

Rehovot, Israel, November 7, 2019

Rehovot, Israel, November 7, 2019 Nova (Nasdaq: NVMI) today announced financial results for the third quarter 2019, the period ended September 30, 2019.

 

Third Quarter 2019 Highlights:

  • Quarterly revenue of $52.5 million, meeting guidance of $46 million to $54 million
  • GAAP net income of $8.6 million, or $0.30 per diluted share, exceeding guidance of $0.11 to $0.24 per share
  • Non-GAAP net income of $11.5 million, or $0.40 per diluted share, exceeding guidance of $0.20 to $0.34 per share
  • Accelerated deliveries to leading edge Foundry to support expansion of its most advanced technology node
  • Balanced revenue contribution across segments, geographies and customers

 

GAAP Results ($K)

 

Q3 2019

Q2 2019

Q3 2018

 Revenues

$52,507

$51,120

$63,571

 Net Income

$8,562

$6,468

$13,310

 Earnings per Diluted Share

$0.30

$0.23

$0.46

NON-GAAP Results ($K)

 

Q3 2019

Q2 2019

Q3 2018

 Net Income

             $11,507  

             $9,007  

$15,080

 Earnings per Diluted Share

$0.40

$0.32

$0.52

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

“We are pleased with our performance during the third quarter of the year despite the varying market conditions. Based on our focused efforts to execute our plans, revenues came in at the high end of the guidance, while profitability exceeded the guidance range,” commented Eitan Oppenhaim, President and Chief Executive Officer. “Our solid performance during different industry cycles is a result of our technology differentiation, operational efficiency and growing exposure to leading customers from all segments. Following our continuous investment in innovative development, the company is well positioned to capitalize on multiple opportunities once markets resume growth.”

 

2019 Fourth Quarter Financial Outlook

Management provided an outlook for the fourth quarter, the period ending December 31, 2019. Based on current estimates, management expects:

  • $56 million to $62 million in revenue
  • $0.32 to $0.42 in diluted GAAP EPS
  • $0.40 to $0.50 in diluted non-GAAP EPS

 

2019 Third Quarter Results

Total revenues for the third quarter of 2019 were $52.5 million, an increase of 3% compared to the second quarter of 2019 and decrease of 17% compared to the third quarter of 2018.

Gross margin for the third quarter of 2019 was 52%, compared to a gross margin of 55% in the second quarter of 2019, and compared to the gross margin of 59% in the third quarter of 2018.

Operating expenses in the third quarter of 2019 were $21.0 million, compared with $21.3 in the second quarter of 2019 and compared with $21.7 million in the third quarter of 2018.

On a GAAP basis, the company reported net income of $8.6 million, or $0.30 per diluted share, in the third quarter of 2019. This is compared with $6.5 million, or $0.23 per diluted share, in the second quarter of 2019, and compared with net income of $13.3 million, or $0.46 per diluted share, in the third 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 $11.5 million, or $0.40 per diluted share, in the third quarter of 2019. This is compared with net income of $9.0 million, or $0.32 per diluted share, in the second quarter of 2019, and compared with net income of $15.1 million, or $0.52 per diluted share, in the third quarter of 2018.

 

Conference Call Information

Nova will host a conference call today, November 7, 2019, 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. Dial-in Number: 1-800-239-9838

ISRAEL Dial-in Number: 1-809-212-883

INTERNATIONAL Dial-in Number: 1-323-794-2551

At:

9 a.m. Eastern Time

6 a.m. Pacific Time

4 p.m. Israeli Time

Please reference conference ID 6009704

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 November 7, 2019 at 12 p.m. Eastern Time to November 14, 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

TOLL/INTERNATIONAL 1-412-317-6671

Replay Pin Number: 6009704

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

 

September 30,

2019

 

December 31,

2018

 

Current assets

 

 

 

 

 

Cash and cash equivalents

 

26,220

 

22,877

 

Short-term interest-bearing bank deposits

 

152,916

 

152,951

 

Trade accounts receivable

 

47,054

 

53,531

 

Inventories

 

50,143

 

41,786

 

Other current assets

 

15,561

 

10,961

 

 

 

 

 

 

 

Total current assets

 

291,894

 

282,106

 

 

 

 

 

 

 

Long-term assets

 

 

 

 

 

Long-term interest-bearing bank deposits

 

2,000

 

2,000

 

Deferred tax assets

 

4,627

 

3,873

 

Severance pay funds

 

1,185

 

1,394

 

Property and equipment, net

 

25,914

 

13,756

 

Identifiable intangible assets, net

 

8,227

 

10,187

 

Operating lease right-of-use assets

 

25,415

 

 

Goodwill

 

20,114

 

20,114

 

 

 

 

 

 

 

Total long-term assets

 

87,482

 

51,324

 

 

 

 

 

 

 

Total assets

 

379,376

 

333,430

 

 LiabIlities and shareholders’ Equity

 

 

 

 

 

Current liabilities

 

 

 

 

 

Trade accounts payable

 

18,589

 

19,015

 

Deferred revenues

 

3,715

 

3,984

 

Operating lease current liabilities

 

3,620

 

 

Other current liabilities

 

20,340

 

25,079

 

 

 

 

 

 

 

Total current liabilities

 

46,264

 

48,078

 

 

 

 

 

 

 

Long-term liabilities

 

 

 

 

 

Liability for employee severance pay

 

2,097

 

2,254

 

Operating lease long-term liabilities

 

25,199

 

 

Other long-term liabilities

 

5,180

 

2,358

 

 

 

 

 

 

 

Total long-term liabilities

 

32,476

 

4,612

 

 

 

 

 

 

 

Shareholders’ equity

 

300,636

 

280,740

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

379,376

 

333,430

 

 

NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

 

 

Three months ended

 

Nine months ended

 

September 30,

 2019

 

September 30,

 2018

 

September 30,

 2019

 

September 30,

 2018

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

Products

38,723

 

48,953

 

120,185

 

144,922

Services

13,784

 

14,618

 

40,099

 

43,140

Total revenues

52,507

 

63,571

 

160,284

 

188,062

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

Products

16,342

 

17,615

 

48,446

 

53,586

Services

8,672

 

8,489

 

24,651

 

24,952

Total cost of revenues

25,014

 

26,104

 

73,097

 

78,538

 

 

 

 

 

 

 

 

Gross profit

27,493

 

37,467

 

87,187

 

109,524

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Research and development expenses, net

10,548

 

11,886

 

34,786

 

34,961

Sales and marketing expenses

7,156

 

7,016

 

20,943

 

20,689

General and administrative expenses

2,658

 

2,162

 

7,564

 

6,526

Amortization of acquired intangible assets

657

 

653

 

1,969

 

1,960

Total operating expenses

21,019

 

21,717

 

65,262

 

64,136

 

 

 

 

 

 

 

 

Operating income

6,474

 

15,750

 

21,925

 

45,388

 

 

 

 

 

 

 

 

Financing income, net

887

 

872

 

2,252

 

1,806

 

 

 

 

 

 

 

 

Income before tax on income

7,361

 

16,622

 

24,177

 

47,194

 

 

 

 

 

 

 

 

Income tax expenses (income)

(1,201)

 

3,312

 

1,391

 

7,971

 

 

 

 

 

 

 

 

Net income for the period

8,562

 

13,310

 

22,786

 

39,223

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

Basic

0.31

 

0.47

 

0.82

 

1.40

Diluted

0.30

 

0.46

 

0.80

 

1.36

 

 

 

 

 

 

 

 

Shares used for calculation of earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

27,826

 

             28,047

 

27,935

 

27,980

Diluted

28,474

 

             28,777

 

28,599

 

28,761

 

NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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

 

 

Three months ended

 

Nine months ended

 

September 30,

2019

 

September 30,

2018

 

September 30,

2019

 

September 30,

2018

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income for the period

8,562

 

13,310

 

22,786

 

39,223

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

 

 

 

 

 

 

 

Depreciation and amortization

3,842

 

2,000

 

9,312

 

5,534

Amortization of deferred stock-based compensation

1,364

 

1,254

 

3,662

 

3,081

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

25

 

(18)

 

52

 

(53)

Deferred tax assets, net

(410)

 

(188)

 

(754)

 

(745)

Decrease (increase) in trade accounts receivable

1,024

 

(4,998)

 

6,477

 

(7,079)

Increase in inventories

(1,332)

 

(768)

 

(9,187)

 

(8,004)

Decrease (increase) in other current assets

(7,180)

 

(2,505)

 

(4,600)

 

1,069

Increase (decrease) in trade accounts payable

1,700

 

(925)

 

(426)

 

1,866

Increase (decrease) in other current liabilities and other long-term liabilities

3,247

 

(496)

 

(1,332)

 

(7,594)

Decrease in short term deferred revenues

(1,599)

 

(3,233)

 

(269)

 

(4,083)

 

 

 

 

 

 

 

 

Net cash provided by operating activities

9,243

 

3,433

 

25,721

 

23,215

 

 

 

 

 

 

 

 

Cash flow from investment activities:

 

 

 

 

 

 

 

Decrease (increase) in short-term and long-term interest-bearing bank deposits

(6,040)

 

*(5,761)

 

35 

 

*(24,410)

Additions to property and equipment

(7,928)

 

(683)

 

(15,621)

 

(1,779)

 

 

 

 

 

 

 

 

Net cash used in investment activities

(13,968)

 

*(6,444)

 

(15,586)

 

*(26,189)

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Purchases of treasury shares

 

 

(7,159)

 

Shares issued under employee stock-based plans

95

 

56

 

367

 

294

 

 

 

 

 

 

 

 

Net cash provided by (used in) financing activities

95

 

56

 

(6,792)

 

294

 

 

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents and restricted cash

(4,630)

 

*(2,955)

 

3,343

 

*(2,680)

Cash and cash equivalents and restricted cash – beginning of period

32,850

 

*28,722

 

24,877

 

*28,447

Cash and cash equivalents and restricted cash – end of period

28,220

 

*25,767

 

28,220

 

*25,767

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

Cash and cash equivalents

26,220

 

23,767

 

26,220

 

23,767

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

2,000

 

2,000

 

2,000

 

2,000

Total cash, cash equivalents, and restricted cash

28,220

 

25,767

 

28,220

 

25,767

 

*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

 

 

September 30,
2019

 

June 30,
2019

 

September 30,
2018

GAAP gross profit

27,493

 

28,110

 

37,467

Stock-based compensation expenses (1)

277

 

222

 

283

Facilities transition costs (2)

220

 

271

 

– 

Non-GAAP gross profit

27,990

 

28,603

 

37,750

GAAP gross margin as a percentage of revenues

52%

 

55%

 

59%

Non-GAAP gross margin as a percentage of revenues

53%

 

56%

 

59%

 

 

 

 

 

 

GAAP operating income

6,474

 

6,775

 

15,750

Stock-based compensation expenses (1)

1,364

 

1,086

 

1,254

Amortization of acquired intangible assets

657

 

656

 

653

Facilities transition costs (2)

888

 

827

 

– 

Non-GAAP operating income

9,383

 

9,344

 

17,657

GAAP operating margin as a percentage of revenues

12%

 

13%

 

25%

Non-GAAP operating margin as a percentage of revenues

18%

 

18%

 

28%

 

 

 

 

 

 

GAAP net income

8,562

 

6,468

 

13,310

Stock-based compensation expenses (1)

1,364

 

1,086

 

1,254

Amortization of acquired intangible assets

657

 

656

 

653

Facilities transition costs (2)

888

 

827

 

– 

Revaluation of long-term liabilities

362

 

295

 

– 

Tax effect of non-GAAP adjustments

(326)

 

(325)

 

(137)

Non-GAAP net income

11,507

 

9,007

 

15,080

 

 

 

 

 

 

GAAP basic earnings per share

0.31

 

0.23

 

0.47

Non-GAAP basic earnings per share

0.41

 

0.32

 

0.54

 

 

 

 

 

 

GAAP diluted earnings per share

0.30

 

0.23

 

0.46

Non-GAAP diluted earnings per share

0.40

 

0.32

 

0.52

 

 

 

 

 

 

Shares used for calculation of earnings per share:

 

 

 

 

 

Basic

27,826

 

27,869

 

28,047

Diluted

28,474

 

28,564

 

28,777

             

(1) Stock-based compensation expenses for the three months ended September 30, 2019 included in – Cost of revenues products – 161; Cost of revenues services – 116; Research and development expenses, net – 534; Sales and marketing expenses – 296; General and administrative expenses – 257.

(2) Facilities transition costs for the three months ended September 30, 2019 included in – Cost of revenues products – 144; Cost of revenues services – 76; Research and development expenses, net – 295; Sales and marketing expenses – 110; General and administrative expenses – 264.

 

 

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

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