Nova Reports Record Revenues for Second Quarter 2015

Quarterly Revenues of $40.6 million Drive Non-GAAP Net Income of $0.20 Per Diluted Share, Both Exceeding the Guidance

REHOVOT, Israel, July 28, 2015 /PRNewswire/ -- Nova Measuring Instruments NVMI, a leading innovator and a key provider of metrology solutions for advanced process control used in semiconductor manufacturing, today reported record 2015 second quarter results. The company closed the acquisition of ReVera on April 2, 2015. Accordingly, the company's second quarter results include the contribution of ReVera, with no similar contribution in previous periods.

Quarterly Highlights:

  • Record quarterly revenue of $40.6 million, up 47% sequentially
  • Non-GAAP net income of $5.4 million, or $0.20 per diluted share, up 34% sequentially
  • Customer mix includes four customers contributing more than 10% each to the quarterly revenues, including two leading memory customers
  • Launched new standalone Optical CD system, the HelioSense100, targeted at the most complex device manufacturing across all semiconductor segments
  • The acquisition of ReVera creating strong pipeline of opportunities and leading to further customer diversification

 


GAAP Results ($K)


Q2 2015

Q1 2015

Q2 2014

Revenues

$40,552

$27,494

$32,785

Net Income

$2,150

$2,977

$5,694

Earnings per Diluted Share

$0.08

$0.11

$0.20

NON-GAAP Results ($K)


Q2 2015

Q1 2015

Q2 2014

Net Income

$5,402

$4,034

$6,108

Earnings per Diluted Share

$0.20

$0.15

$0.22

 

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, adjustments of deferred tax assets, stock-based compensation expenses and acquisition related expenses.

Management Comments

"We continue to diversify our revenue and customer base by expanding our technologies and creating a comprehensive suite of solutions, which is becoming increasingly attractive to our customers," commented Eitan Oppenhaim, President and CEO of Nova. "Our efforts to differentiate our offering and expand our customer mix are contributing to our growth and improving our financial results, which continue to represent industry leading performance," added Mr. Oppenhaim. "The integration of ReVera continues to go well, and the strategic benefits of this pivotal acquisition have exceeded our expectations. We believe Nova is well positioned today to capture the growing market opportunities that are driven by key industry inflection points, due to our holistic approach and complete suite of products, including optical and x-ray technologies, as well as our advanced software and modeling solutions."

2015 Second Quarter Results

Total revenues for the second quarter of 2015 were $40.6 million, an increase of 47% compared to the first quarter of 2015, and an increase of 24% relative to the second quarter of 2014.

Gross margin for the second quarter of 2015 was 47%, and included $2.4 million of amortization of acquired intangible assets in cost of product. This is compared with 52% in the first quarter of 2015 and compared with 54% in the second quarter of 2014.

Operating expenses in the second quarter of 2015 were $18.7 million, and included $1.5 million of acquisition related expenses and $0.6 million of amortization of acquired intangible assets. This is compared with $12.1 million in the first quarter of 2015 and compared to $12.0 million in the second quarter of 2014.

On a GAAP basis, the company reported net income of $2.2 million, or $0.08 per diluted share, in the second quarter of 2015. This compares with net income of $3.0 million, or $0.11 per diluted share, in the first quarter of 2015. The company reported net income of $5.7 million, or $0.20 per diluted share, in the second quarter of 2014.

On a Non-GAAP basis, which excludes amortization of acquired intangible assets, adjustments of deferred tax assets, stock-based compensation expenses and acquisition related expenses, the company reported net income of $5.4 million, or $0.20 per diluted share, in the second quarter of 2015. This compares sequentially to net income of $4.0 million, or $0.15 per diluted share, in the first quarter of 2015 and to net income of $6.1 million, or $0.22 per diluted share, in the second quarter of 2014.

Third Quarter Financial Outlook

Management provided an outlook for the third quarter, the period ending September 30, 2015. Based on current estimates, management expects:

  • $38 million to $42 million in revenue
  • $0.10 to $0.20 in diluted non-GAAP EPS
  • $0.08 to $0.18 in diluted GAAP EPS

Conference Call Information

Nova will host a conference call on Tuesday, July 28, 2015 at 4:30 p.m. Eastern Time, to discuss the second quarter results and future outlook.

To attend the conference call, please dial one of the following teleconferencing numbers. Please begin by placing your calls 5 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:  1-800-967-7135
ISRAEL Dial-in Number:  1809-24-6042
I
NTERNATIONAL Dial-in Number:  1-719-325-2370

At:

4:30 p.m. Eastern Time
1:30 p.m. Pacific Time
11:30 p.m. Israeli Time

The conference call will also be webcast live from a link on Nova's website at http://ir.novameasuring.com. For those unable to participate in the conference call, there will be a replay available from a link on Nova's website at http://ir.novameasuring.com.

About Nova: Nova Measuring Instruments Ltd. delivers continuous innovation by providing advanced metrology solutions for the semiconductor manufacturing industry. Deployed with the world's largest integrated-circuit manufacturers, Nova's products deliver state of the art, high performance metrology solutions for effective process control throughout the semiconductor fabrication lifecycle. Nova's holistic approach and complete suite of products, which combines high-precision hardware and cutting-edge software, support the development and production of the most advanced devices in today's high-end semiconductor market. Our technical innovation and market leadership enable customers to improve their process performance, products yields and time to market. Nova acts as a partner to semiconductor manufacturers from its offices around the world. Additional information may be found at www.novameasuring.com.

This press release provides financial measures that exclude non-cash charges for amortization of acquired intangible assets, adjustments of deferred tax assets, stock-based compensation expenses and acquisition related expenses 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 benefits, growth opportunities and other events relating to the acquisition of ReVera Incorporated, 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. These risks and other factors include but are not limited to: the ability to recognize benefits of the acquisition; risks that the acquisition disrupts current plans and operations; and impact of the acquisition on relationships with customers, distributors and suppliers. Factors that may affect our results, performance, circumstances or achievements also include, but are not limited to, the following: 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 PEM; 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 the financial, political and environmental instabilities in Asia; risks related to our intellectual property; new product offerings from our competitors; unanticipated manufacturing or supply problems; changes in tax requirements; changes in customer demand for our products; risks related to currency fluctuations 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, 2014 filed with the Securities and Exchange Commission on February 25, 2015. 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.


Company Contact:

Investor Relations Contacts:

Dror David, Chief Financial Officer

Hayden/ MS-IR LLC

Nova Measuring Instruments Ltd.

Miri Segal

Tel: +972-73-229-5760

Tel: +917-607-8654

E-mail: info@novameasuring.com 

E-mail: msegal@ms-ir.com

www.novameasuring.com

Or


Brett Maas


Tel: +646-536-7331


E-mail: brett@haydenir.com

 


NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

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




As of

 

 

ASSETS


June 30,

2015


December 31,

2014

(Audited)

Current assets





Cash and cash equivalents


21,543


13,649

Short-term interest-bearing bank deposits


58,803


107,289

Held for trading securities


2,063


1,995

Trade accounts receivable


21,470


15,566

Inventories


26,598


16,107

Deferred tax assets


1,362


142

Other current assets


3,301


3,097






Total current assets


135,140


157,845






Long-term assets





Long-term interest-bearing bank deposits


750


750

Deferred tax assets


12,063


1,654

Severance pay funds


1,637


1,580

Property and equipment, net


11,003


11,450

Identifiable intangible assets, net


19,918


-

Goodwill


14,657


-






Total long-term assets


60,028


15,434






Total assets


195,168


173,279






LIABILITIES AND SHAREHOLDERS' EQUITY





Current liabilities





Trade accounts payable


15,337


11,568

Deferred revenues


3,611


3,022

Deferred tax liabilities


1,337


-

Other current liabilities


13,884


12,606






Total current liabilities


34,169


27,196






Long-term liabilities





Deferred tax liabilities


6,631


-

Liability for employee severance pay


2,606


2,465

Deferred revenues 


-


36






Total long-term liabilities


9,237


2,501






Shareholders' equity


151,762


143,582






Total liabilities and shareholders' equity


195,168


173,279

 


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,

2015

June 30,

2014

June 30,

2015

June 30,

2014








Revenues:






Products

30,861

26,015

50,185

54,791


Services

9,691

6,770

17,861

12,654


Total revenues

40,552

32,785

68,046

67,445








Cost of revenues:






Products

13,343

11,050

21,982

23,847


Services

5,598

4,139

10,030

8,279


Amortization of acquired intangible assets in
cost of products

 

2,442

 

-

 

2,442

 

-


Total cost of revenues

21,383

15,189

34,454

32,126








Gross profit

19,169

17,596

33,592

35,319








Operating expenses:






Research and Development expenses, net

10,904

7,152

17,903

14,053


Sales and Marketing expenses

4,260

3,505

7,066

6,911


General and Administration expenses

1,413

1,316

2,637

2,380


     Acquisition related expenses

1,549

-

2,655

-


Amortization of acquired intangible assets

569

-

569

-


Total operating expenses

18,695

11,973

30,830

23,344








Operating income

474

5,623

2,762

11,975








Financing income, net

154

202

365

377








Income before tax on income

628

5,825

3,127

12,352








     Income tax expenses (benefit)

(1,522)

131

(2,000)

260








Net income for the period

2,150

5,694

5,127

12,092








Earnings per share:






     Basic

0.08

0.21

0.19

0.44


     Diluted

0.08

0.20

0.19

0.43








Shares used for calculation of earnings per

  share:






     Basic

27,291

27,592

27,250

27,512


     Diluted

27,677

28,138

27,426

27,983


















 

 

NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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






Three months ended

Six months ended



June 30,

2015

June 30,

2014

June 30,

2015

June 30,

2014

Cash flows from operating activities:










Net income for the period

2,150

5,694

5,127

12,092






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










Depreciation

1,146

972

2,206

1,874

Amortization of acquired intangible assets

3,011

-

3,011

-

Amortization of deferred stock-based compensation

613

472

1,130

994

Decrease in liability for employee termination
     
benefits, net

100

74

84

48

Deferred tax assets, net

(1,921)

(58)

(2,487)

(49)

Gain on securities

(110)

-

(68)

-

Decrease (increase) in trade accounts receivable

(1,887)

(3,898)

(4,383)

1,843

Decrease (increase) in inventories

(1,380)

688

(1,263)

(672)

Decrease (increase) in other current assets

(373)

257

(43)

(460)

Increase (decrease) in trade accounts payable and 
     
other long-term liabilities

2,428

(2,456)

2,563

(3,505)

Increase (decrease) in other current liabilities

207

(787)

682

446

Increase (decrease) in short and long term deferred
    
revenues

 

259

 

1,247

 

(843)

 

2,330






Net cash provided by operating activities

4,243

2,205

5,716

14,941






Cash flow from investment activities:










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

(11)

(1,943)

48,486

(11,984)

Investment in short-term available for sale securities

-

(19)

-

(18)

Acquisition of subsidiary, net of acquired cash

1,156

-

(45,344)

-

Additions to property and equipment

(767)

(1,228)

(1,524)

(1,753)






Net cash provided by (used in) investment activities

378

(3,190)

1,618

(13,755)






Cash flows from financing activities:










Purchases of treasury shares

(1,389)

(1,103)

(1,389)

(1,103)

Shares issued under employee stock-based plans

857

961

1,949

2,274






Net cash provided by (used in) financing activities

(532)

(142)

560

1,171






Increase (decrease) in cash and cash equivalents

4,089

(1,127)

7,894

2,357

Cash and cash equivalents – beginning of period

17,454

21,026

13,649

17,542

Cash and cash equivalents – end of period

21,543

19,899

21,543

19,899









 

NOVA MEASURING INSTRUMENTS LTD.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(U.S. dollars in thousands, except percentage) - (Unaudited)




Three months ended


June 30,
2015

March 31
2015

June 30,
2014





GAAP cost of revenues

21,383

13,071

15,189

  Amortization of acquired intangible assets in cost of products

 

(2,442)

 

-

 

-

  Stock-based compensation in cost of products

(89)

(81)

(80)

  Stock-based compensation in cost of services

(46)

(32)

(30)

Non-GAAP cost of revenues

18,806

12,958

15,079





GAAP gross profit

19,169

14,423

17,596

Gross profit adjustments

2,577

113

110

Non-GAAP gross profit

21,746

14,536

17,706

GAAP gross margin as a percentage of revenues

47%

52%

54%

Non-GAAP gross margin as a percentage of revenues

54%

53%

54%





GAAP operating expenses

18,695

12,135

11,973

  Stock-based compensation in Research and Development

(254)

(190)

(199)

  Stock-based compensation in Sales and Marketing

(166)

(160)

(111)

  Stock-based compensation in General and Administrative

(58)

(54)

(52)

  Acquisition related expenses

(1,549)

(1,106)

-

  Amortization of acquired intangible assets

(569)

-

-

Non-GAAP operating expenses

16,099

10,625

11,611

Non-GAAP operating income

5,647

3,911

6,095

GAAP operating margin as a percentage of revenues

1%

8%

17%

Non-GAAP operating margin as a percentage of revenues

14%

14%

19%





GAAP tax on income

(1,522)

(478)

131

  Deferred tax assets adjustments, net

1,921

566

58

Non-GAAP tax on income

399

88

189





GAAP net income

2,150

2,977

5,694

  Amortization of acquired intangible assets

3,011

-

-

  Stock-based compensation expenses

613

517

472

  Deferred tax assets adjustments, net

(1,921)

(566)

(58)

  Acquisition related expenses

1,549

1,106

-

Non-GAAP net income

5,402

4,034

6,108





GAAP basic earnings per share

0.08

0.11

0.21

Non-GAAP basic earnings per share

0.20

0.15

0.22





GAAP diluted earnings per share

0.08

0.11

0.20

Non-GAAP diluted earnings per share

0.20

0.15

0.22





Shares used for calculation of earnings per share:




  Basic

27,291

27,210

27,592

  Diluted

27,677

27,552

28,138





 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/nova-reports-record-revenues-for-second-quarter-2015-300120027.html

SOURCE Nova Measuring Instruments Ltd.

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