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Investors Press Releases

Nova Reports Third Quarter 2020 Results

Rehovot, Israel, November 12, 2020

 

REHOVOT, Israel, Nov. 12, 2020 /PRNewswire/ — Nova (Nasdaq: NVMI) today announced financial results for the third quarter 2020, the period ended September 30, 2020.

Business Highlights:

  • Record quarterly revenue of $69.5 million, up 32% year-over-year
  • GAAP net income of $13.9 million, or $0.48 per diluted share, up 60% year-over-year on a per-share basis
  • Non-GAAP net income of $16.5 million, or $0.57 per diluted share, up 43% year-over-year on a per-share basis
  • Record quarterly optical standalone revenues, driven by growing demand for Nova’s unique dimensional metrology solutions
  • In October, completed a private offering of $200 million of 0% convertible senior notes due 2025

 

GAAP Results ($K)

 

Q3 2020

Q2 2020

Q3 2019

Revenues

$69,485

$62,586

$52,507

Net Income

$13,896

$8,672

$8,562

Earnings per Diluted Share

$0.48

$0.30

$0.30

NON-GAAP Results ($K)

 

Q3 2020

Q2 2020

Q3 2019

Net Income

$16,511

$13,774

$11,507

Earnings per Diluted Share

$0.57

$0.48

$0.40

 

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

“Nova’s outstanding financial results for the quarter exceeded our previous expectations and guidance. These results demonstrate the resilience of our operational model and the strategic value we bring to our customers while they continue developing their next generation technology nodes,” commented Eitan Oppenhaim, President and Chief Executive Officer. “Following our strong operational execution in 2020, we remain confident in our strategy and the value we create, which provide us a solid base to deliver our long-term growth objectives.”

2020 Fourth Quarter Financial Outlook

Management provided an outlook for the fourth quarter, the period ending December 31, 2020. Based on current estimates, management expects:

  • $66 million to $73 million in revenue
  • $0.32 to $0.43 in diluted GAAP EPS
  • $0.45 to $0.56 in diluted non-GAAP EPS

2020 Third Quarter Results

Total revenues for the third quarter of 2020 were $69.5 million, an increase of 11.0% compared with the second quarter of 2020 and an increase of 32.3% compared with the third quarter of 2019.

Gross margin for the third quarter of 2020 was 57.1%, compared with a gross margin of 58.5% in the second quarter of 2020, and compared with a gross margin of 52.4% in the third quarter of 2019.

Operating expenses in the third quarter of 2020 were $24.1 million, compared with $26.3 million in the second quarter of 2020 and compared with $21.0 million in the third quarter of 2019.

On a GAAP basis, the Company reported net income of $13.9 million, or $0.48 per diluted share, in the third quarter of 2020. This is compared with net income of $8.7 million, or $0.30 per diluted share, in the second quarter of 2020, and compared with net income of $8.6 million, or $0.30 per diluted share, in the third 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 $16.5 million, or $0.57 per diluted share, in the third quarter of 2020. This is compared with net income of $13.8 million, or $0.48 per diluted share, in the second quarter of 2020, and compared with net income of $11.5 million, or $0.40 per diluted share, in the third quarter of 2019.

Conference Call Information

Nova will host a conference call today, November 12, 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: 1-888-394-8218
ISRAEL TOLL-FREE Dial-in Number: 1-809-212-883
INTERNATIONAL Dial-in Number: 1-323-701-0225

At:

9 a.m. Eastern Time
6 a.m. Pacific Time
4 p.m. Israel Time
Please reference conference ID: 1420148

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 November 12, 2020 at 12 p.m. Eastern Time to November 19, 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: 1420148

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, tax effect of non-GAAP adjustments and amortization of debt discount and issuance costs, 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.

 

 

NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

 
 

As of

 

ASSETS

 

September 30,

2020

 

December 31,

2019

 

Current assets

         

Cash and cash equivalents

 

32,713

 

31,748

 

Short-term interest-bearing bank deposits

 

200,676

 

154,533

 

Trade accounts receivable

 

41,097

 

51,603

 

Inventories

 

62,063

 

48,362

 

Other current assets

 

11,899

 

17,122

 
           

Total current assets

 

348,448

 

303,368

 
           

Non-current assets

         

Interest-bearing bank deposits

 

2,824

 

2,813

 

Restricted interest-bearing bank deposits

 

2,000

 

2,000

 

Deferred tax assets

 

5,282

 

4,554

 

Severance pay funds

 

1,197

 

1,210

 

Right of-use assets

 

29,508

 

28,256

 

Property and equipment, net

 

32,491

 

30,566

 

Intangible assets, net

 

5,684

 

7,562

 

Goodwill

 

20,114

 

20,114

 
           

Total non-current assets

 

99,100

 

97,075

 
           

Total assets

 

447,548

 

400,443

 


  Liabilities and shareholders’ Equity

         

Current liabilities

         

Trade accounts payable

 

 

22,733

 

20,706

 

Deferred revenues

 

3,791

 

2,256

 

Operating lease current liabilities

 

2,391

 

2,236

 

Other current liabilities

 

26,303

 

21,751

 
           

Total current liabilities

 

55,218

 

46,949

 
           

Non-current liabilities

         

Accrued severance pay

 

2,139

 

2,120

 

Operating lease long-term liabilities

 

31,875

 

31,077

 

Other long-term liability

 

6,616

 

5,758

 
           

Total non-current liabilities

 

40,630

 

38,955

 
           

Shareholders’ equity

 

351,700

 

314,539

 
           

Total liabilities and shareholders’ equity

 

447,548

 

400,443

 

 

 

 

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,

 2020

 

September 30,

 2019

 

September 30,

 2020

 

September 30,

 2019

               

Revenues:

             

Products

54,757

 

38,723

 

147,579

 

120,185

Services

14,728

 

13,784

 

45,514

 

40,099

Total revenues

69,485

 

52,507

 

193,093

 

160,284

               

Cost of revenues:

             

Products

20,732

 

16,342

 

55,922

 

48,446

Services

9,096

 

8,672

 

26,571

 

24,651

Total cost of revenues

29,828

 

25,014

 

82,493

 

73,097

               

Gross profit

39,657

 

27,493

 

110,600

 

87,187

               

Operating expenses:

             

Research and development expenses, net

12,957

 

10,548

 

37,262

 

34,786

Sales and marketing expenses

7,406

 

7,156

 

21,232

 

20,943

General and administrative expenses

3,141

 

2,658

 

11,505

 

7,564

Amortization of acquired intangible assets

625

 

657

 

1,877

 

1,969

Total operating expenses

24,129

 

21,019

 

71,876

 

65,262

               

Operating income

15,528

 

6,474

 

38,724

 

21,925

               

Financing income, net

846

 

887

 

2,261

 

2,252

               

Income before tax on income

16,374

 

7,361

 

40,985

 

24,177

               

Income tax expenses

2,478

 

(1,201)

 

6,735

 

1,391

               

Net income for the period

13,896

 

8,562

 

34,250

 

22,786

               

Earnings per share:

             

Basic

0.49

 

0.31

 

1.22

 

0.82

Diluted

0.48

 

0.30

 

1.18

 

0.80

               

Shares used for calculation of earnings per share:

             

Basic

28,168

 

27,826

 

28,080

 

27,935

Diluted

29,020

 

28,474

 

28,933

 

28,599

 

 

 

NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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

 
 

Three months ended

 

Nine months ended

 

September 30,

2020

 

September 30,

2019

 

September 30,

2020

 

September 30,

2019

Cash flows from operating activities:

             

Net income for the period

13,896

 

8,562

 

34,250

 

22,786

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

             

Depreciation and amortization

2,447

 

3,842

 

7,133

 

9,312

Share-based compensation

1,946

 

1,364

 

4,718

 

3,662

Change in deferred tax assets, net

(182)

 

(410)

 

(728)

 

(754)

Change in accrued severance pay, net

4

 

25

 

32

 

52

Change in trade accounts receivable

3,360

 

1,024

 

10,506

 

6,477

Change in inventories

(6,582)

 

(1,332)

 

(15,052)

 

(9,187)

Change in other current and long-term assets

484

 

(7,180)

 

5,223

 

(4,600)

Change in trade accounts payable

1,362

 

1,700

 

2,027

 

(426)

Change in other current and long-term liabilities

2,227

 

3,247

 

4,530

 

(1,332)

Change in short term deferred revenues

2,626

 

(1,599)

 

1,535

 

(269)

               

Net cash provided by (used in) operating activities

21,588

 

9,243

 

54,174

 

25,721

               

Cash flow from investment activities:

             

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

(13,161)

 

(6,040)

 

(46,154)

 

35

Purchase of property and equipment

(1,713)

 

(7,928)

 

(4,873)

 

(15,621)

               

Net cash provided by (used in) investment activities

(14,874)

 

(13,968)

 

(51,027)

 

(15,586)

               

Cash flows from financing activities:

             

Purchases of treasury shares

 

 

(2,549)

 

(7,159)

Shares issued upon exercise of options

114

 

95

 

367

 

367

               

Net cash used in financing activities

114

 

95

 

(2,182)

 

(6,792)

               

Increase (decrease) in cash and cash equivalents

6,828

 

(4,630)

 

965

 

3,343

Cash and cash equivalents – beginning of period

25,885

 

32,850

 

31,748

 

24,877

Cash and cash equivalents – end of period

32,713

 

28,220

 

32,713

 

28,220

               

 

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,
2020

 

June 30,
2020

 

September 30,
2019

GAAP gross profit

39,657

 

36,601

 

27,493

Stock-based compensation expenses *

414

 

279

 

277

Facilities transition costs

 

 

220

Non-GAAP gross profit

40,071

 

36,880

 

27,990

GAAP gross margin as a percentage of revenues

57%

 

58%

 

52%

Non-GAAP gross margin as a percentage of revenues

58%

 

59%

 

53%

           

GAAP operating income

15,528

 

10,315

 

6,474

Stock-based compensation expenses *

1,946

 

1,454

 

1,364

Amortization of acquired intangible assets

625

 

626

 

657

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

 

3,000

 

Facilities transition costs

 

 

888

Non-GAAP operating income

18,099

 

15,395

 

9,383

GAAP operating margin as a percentage of revenues

22%

 

16%

 

12%

Non-GAAP operating margin as a percentage of revenues

26%

 

25%

 

18%

           

GAAP net income

13,896

 

8,672

 

8,562

Stock-based compensation expenses *

1,946

 

1,454

 

1,364

Amortization of acquired intangible assets

625

 

626

 

657

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

 

3,000

 

Facilities transition costs

 

 

888

Revaluation of long-term liabilities

161

 

594

 

362

Tax effect of non-GAAP adjustments

(117)

 

(572)

 

(326)

Non-GAAP net income

16,511

 

13,774

 

11,507

           

GAAP basic earnings per share

0.49

 

0.31

 

0.31

Non-GAAP basic earnings per share

0.59

 

0.49

 

0.41

           

GAAP diluted earnings per share

0.48

 

0.30

 

0.30

Non-GAAP diluted earnings per share

0.57

 

0.48

 

0.40

           

Shares used for calculation of earnings per share:

         

Basic

28,168

 

28,039

 

27,826

Diluted

29,020

 

28,888

 

28,474

             

 

* Stock-based compensation expenses for the three months ended September 30, 2020 included in – Cost of revenues products – 259; Cost of revenues services – 155; Research and development expenses, net – 713; Sales and marketing expenses – 409; General and administrative expenses – 410

 

 

NOVA MEASURING INSTRUMENTS LTD.

SUPPLEMENTAL INFORMATION – RECONCILIATION OF FOURTH QUARTER 2020

GAAP TO NON-GAAP GUIDANCE

 (Unaudited)

 
 

Low

 

High

Estimated GAAP net income per diluted share

0.32

 

0.43

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

0.03

 

0.03

Tax effect of non-GAAP adjustments

(0.01)

 

(0.01)

Estimated non-GAAP net income per diluted share

0.45

 

0.56

 

 

 

Company Contact:

Investor Relations Contact:

Dror David, Chief Financial Officer

Miri Segal

Nova Measuring Instruments Ltd.

MS-IR LLC

Tel: +972-73-229-5760

Tel: +917-607-8654

E-mail: info@novami.com

E-mail: msegal@ms-ir.com

www.novami.com

 

 

 

 

 

 

 

 

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