Nova Reports First Quarter 2018 Results

Nova Reports First Quarter 2018 Results

PR Newswire

REHOVOT, Israel, May 2, 2018 /PRNewswire/ -- Nova NVMI, a leading innovator and a key provider of metrology solutions for advanced process control used in semiconductor manufacturing, today reported financial results for the first quarter 2018, the period ended March 31, 2018.

First Quarter 2018 Highlights:

  • Record quarterly revenue of $62.6 million, up 15% year-over-year, exceeding guidance of $54 to $60 million
  • GAAP net income of $14.1 million, or $0.49 per diluted share, exceeding guidance of $0.29 to $0.40 per share
  • Non-GAAP net income of $15.4 million, or $0.54 per diluted share, exceeding guidance of $0.34 to $0.45 per share
  • Growing position in China yielded 40% of overall product revenue
  • Expansion in the Memory sector generated 50% of overall product revenue

 

GAAP Results K



Q1 2018

Q4 2017

Q1 2017

Revenues

$62,603

$57,378

$54,430

Net Income

$14,080

$8,241

$13,403

Earnings per Diluted Share

$0.49

$0.29

$0.48

NON-GAAP Results K



Q1 2018

Q4 2017

Q1 2017

Net Income

$15,430

$13,021

$14,115

Earnings per Diluted Share

$0.54

$0.45

$0.50

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, certain discrete tax items and stock-based compensation expenses.

Management Comments

"Nova continued to perform well this quarter, setting new revenue and profit records that demonstrate our competitive strength in the market and the growing adoption of our diversified portfolio," commented Eitan Oppenhaim, President and Chief Executive Officer of Nova. "Growth in the first quarter was driven by two main notable factors: the expansion of our Memory business and our continued growth in China. This strong start supports our outlook for another growth year in which we continue to execute our strategic plan to expand our portfolio and enhance our value proposition. These efforts contribute directly to our customers' success in transitioning to the most advanced technology nodes," concluded Mr. Oppenhaim.

2018 Second Quarter Financial Outlook

Management provided an outlook for the second quarter, the period ending June 30, 2018. Based on current estimates, management expects:

  • $57 million to $63 million in revenue
  • $0.30 to $0.40 in diluted GAAP EPS
  • $0.35 to $0.45 in diluted non-GAAP EPS

2018 First Quarter Results

Total revenues for the first quarter of 2018 were $62.6 million, an increase of 9% compared to the fourth quarter of 2017, and an increase of 15% relative to the first quarter of 2017.

Gross margin for the first quarter of 2018 was 58%, compared with gross margin of 56% in the fourth quarter of 2017 and compared with gross margin of 60% in the first quarter of 2017.

Operating expenses in the first quarter of 2018 were $20.3 million. This is compared with $19.7 million in the fourth quarter of 2017 and compared with $17.7 million in the first quarter of 2017.

On a GAAP basis, the company reported net income of $14.1 million, or $0.49 per diluted share, in the first quarter of 2018. This is compared with net income of $8.2 million, or $0.29 per diluted share, in the fourth quarter of 2017, and compared with net income of $13.4 million, or $0.48 per diluted share, in the first quarter of 2017. 

On a Non-GAAP basis, which excludes amortization of acquired intangible assets, certain discrete tax items and stock-based compensation expenses, the company reported net income of $15.4 million, or $0.54 per diluted share, in the first quarter of 2018. This is compared with net income of $13.0 million, or $0.45 per diluted share, in the fourth quarter of 2017, and compared with net income of $14.1 million, or $0.50 per diluted share, in the first quarter of 2017.

Conference Call Information

Nova will host a conference call today, May 2, 2018, at 9 a.m. Eastern Time, to discuss the financial results and future 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: 1-888-394-8218

Israel 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

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.

Replay Dial-In Numbers:

U.S. Dial-in Number:   1-844-512-2921

International Dial-in Number:   1-412-317-6671

From:  05/02/18 at 12:00 pm Eastern Time

To:    05/09/18 at 11:59 pm Eastern Time

Replay Pin Number:  1121259

About Nova: Nova Measuring Instruments 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 product portfolio, which combines high-precision hardware and cutting-edge software, supports the development and production of the most advanced devices in today's high-end semiconductor market. Nova's technical innovation and market leadership enable customers to improve process performance, enhance products' 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.novameasuring.com.

Nova is traded on the NASDAQ & TASE under the symbol NVMI.

This press release provides financial measures that exclude charges for amortization of acquired intangible assets, certain discrete tax items and stock-based compensation 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 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, 2017 filed with the Securities and Exchange Commission on February 28, 2018. 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



March 31,



December 31,





2018



2017

Current assets









     Cash and cash equivalents



28,468



27,697

     Short-term interest-bearing bank deposits



132,198



121,390

     Trade accounts receivable



37,425



40,949

     Inventories



39,064



34,921

     Other current assets



5,807



7,313











Total current assets



242,962



232,270











Long-term assets









     Long-term interest-bearing bank deposits



1,100



750

 Deferred tax assets



2,093



1,957

 Severance pay funds



1,512



1,503

 Property and equipment, net



13,612



13,891

 Identifiable intangible assets, net



12,147



12,800

 Goodwill



20,114



20,114











Total long-term assets



50,578



51,015











Total assets



293,540



283,285



LIABILITIES AND SHAREHOLDERS' EQUITY









Current liabilities









     Trade accounts payable



18,050



15,754

 Deferred revenues



5,965



10,334

 Other current liabilities



23,191



26,038











Total current liabilities



47,206



52,126











Long-term liabilities









Liability for employee severance pay



2,558



2,590

Other long-term liabilities



2,115



1,833











Total long-term liabilities



4,673



4,423











Shareholders' equity



241,661



226,736











Total liabilities and shareholders' equity



293,540



283,285

 

 

NOVA MEASURING INSTRUMENTS LTD.



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



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









Three months ended





March 31,

2018



March 31,

2017

















Revenues:











   Products

50,185



43,516





   Services

12,418



10,914





Total revenues

62,603



54,430

















Cost of revenues:











   Products

17,969



15,120





   Services

8,277



6,450





Total cost of revenues

26,246



21,570

















Gross profit

36,357



32,860

















Operating expenses:











    Research and development expenses, net

11,226



9,275





    Sales and marketing expenses

6,231



6,088





    General and administrative expenses

2,230



1,657





    Amortization of acquired intangible assets

653



640





Total operating expenses

20,340



17,660

















Operating income

16,017



15,200

















   Financing income, net

448



415

















Income before tax on income

16,465



15,615

















   Income tax expenses

2,385



2,212

















Net income for the period

14,080



13,403

















Earnings per share:











   Basic

0.50



0.49





   Diluted

0.49



0.48

















Shares used for calculation of earnings per share:























   Basic

27,915



27,467





   Diluted

28,739



28,148





 

 

NOVA MEASURING INSTRUMENTS LTD.



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



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









Three months ended





March 31,



March 31,





2018



2017



Cash flows from operating activities:



















Net income for the period

14,080



13,403













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



















Depreciation

915



955



Amortization of acquired intangible assets

653



640



Amortization of deferred stock-based compensation

834



663



Increase (decrease) in liability for employee termination benefits, net

(41)



32



Deferred tax assets, net

(136)



(591)



Decrease in trade accounts receivable

3,567



4,387



Increase in inventories

(4,475)



(1,575)



Decrease in other current and long-term assets

1,506



421



Increase in trade accounts payable

2,353



90



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

(2,684)



1,879



Increase (decrease) in short and long term deferred revenues

(4,369)



2,394













Net cash provided by operating activities

12,203



22,698













Cash flow from investment activities:









Increase in short-term interest-bearing bank deposits, including long-term

(11,158)



(20,078)



Additions to property and equipment

(361)



(420)













Net cash used in investment activities

(11,519)



(20,498)













Cash flows from financing activities:









Shares issued under employee stock-based plans

87



1,817













Net cash provided by financing activities

87



1,817













Increase in cash and cash equivalents

771



4,017



Cash and cash equivalents – beginning of period

27,697



20,406



Cash and cash equivalents – end of period

28,468



24,423



 

 

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



March 31,

2018



December 31,

2017



March 31,

2017

GAAP cost of revenues

26,246



25,324



21,570

Stock-based compensation in cost of products

(92)



(107)



(76)

Stock-based compensation in cost of services

(79)



(89)



(66)

Non-GAAP cost of revenues

26,075



25,128



21,428













GAAP gross profit

36,357



32,054



32,860

Gross profit adjustments

171



196



142

Non-GAAP gross profit

36,528



32,250



33,002

GAAP gross margin as a percentage of revenues

58%



56%



60%

Non-GAAP gross margin as a percentage of revenues

58%



56%



61%













GAAP operating expenses

20,340



19,723



17,660

Stock-based compensation in research and development

(340)



(346)



(262)

Stock-based compensation in sales and marketing

(219)



(216)



(165)

Stock-based compensation in general and administrative

(104)



(141)



(94)

Amortization of acquired intangible assets

(653)



(640)



(640)

Non-GAAP operating expenses

19,024



18,380



16,499

Non-GAAP operating income

17,504



13,870



16,503

GAAP operating margin as a percentage of revenues

26%



21%



28%

Non-GAAP operating margin as a percentage of revenues

28%



24%



30%













GAAP tax on income

2,385



4,800



2,212

  Certain discrete tax items

137



(3,241)



591

Non-GAAP tax on income

2,522



1,559



2,803













GAAP net income

14,080



8,241



13,403

Amortization of acquired intangible assets

653



640



640

Stock-based compensation expenses

834



899



663

Certain discrete tax items

(137)



3,241



(591)

Non-GAAP net income

15,430



13,021



14,115













GAAP basic earnings per share

0.50



0.30



0.49

Non-GAAP basic earnings per share

0.55



0.47



0.51













GAAP diluted earnings per share

0.49



0.29



0.48

Non-GAAP diluted earnings per share

0.54



0.45



0.50













Shares used for calculation of earnings per share:











Basic

27,915



27,873



27,467

Diluted

28,739



28,786



28,148















 

 

Company Contact:

Dror David, Chief Financial Officer

Nova Measuring Instruments Ltd.

Tel: +972-73-229-5760

E-mail: info@novameasuring.com

www.novameasuring.com

Investor Relations Contact:

Miri Segal

MS-IR LLC

Tel: +917-607-8654

E-mail: msegal@ms-ir.com

 

Cision View original content:http://www.prnewswire.com/news-releases/nova-reports-first-quarter-2018-results-300640888.html

SOURCE Nova

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