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Nova Reports Second Quarter 2018 Results

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Nova Reports Second Quarter 2018 Results

PR Newswire

REHOVOT, Israel, Aug. 1, 2018 /PRNewswire/ -- Nova (NASDAQ:NVMI) today announced financial results for the second quarter 2018, the period ended June 30, 2018.

Second Quarter 2018 Highlights:

  • Quarterly revenue of $61.9 million, up 10% year-over-year, within company guidance
  • GAAP net income of $11.8 million, or $0.41 per diluted share, exceeding guidance of $0.30 to $0.40 per share
  • Non-GAAP net income of $13.3 million, or $0.46 per diluted share, exceeding guidance of $0.35 to $0.45 per share
  • Memory customers generated 50% of overall product revenue
  • Five large customers, three Memory and two Foundry, contributed more than 10% each to overall product revenue 

 

GAAP Results (NYSE:K)


Q2 2018

Q1 2018

Q2 2017

Revenues

$61,888

$62,603

$56,126

Net Income

$11,833

$14,080

$13,313

Earnings per Diluted Share

$0.41

$0.49

$0.47

NON-GAAP Results (NYSE:K)


Q2 2018

Q1 2018

Q2 2017

Net Income

$13,343

$15,430

$15,167

Earnings per Diluted Share

$0.46

$0.54

$0.53


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

"We are very pleased with our quarterly results, which reflect our continuous efforts to execute on our strategic growth plan to diversify our customer base and technology offering," commented Eitan Oppenhaim, President and Chief Executive Officer of Nova. "The second quarter results solidify the progress we are making with both our Dimensional and Materials metrology solutions for advanced 3D NAND and DRAM device manufacturing. We believe that the expanded customer base, along with our differentiated technology, presents a larger market for us to pursue as we continue to execute effectively our long-term growth plans," concluded Mr. Oppenhaim.   

2018 Third Quarter Financial Outlook

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

  • $58 million to $64 million in revenue
  • $0.32 to $0.44 in diluted GAAP EPS
  • $0.37 to $0.49 in diluted non-GAAP EPS

2018 Second Quarter Results

Total revenues for the second quarter of 2018 were $61.9 million, a decrease of 1% compared to the first quarter of 2018 and a year-over-year increase of 10% relative to the second quarter of 2017.

Gross margin for the second quarter of 2018 was 58%, unchanged from gross margin in the first quarter of 2018 and compared to the gross margin of 59% in the second quarter of 2017.

Operating expenses in the second quarter of 2018 were $22.1 million, compared with $20.3 the first quarter of 2018 and compared with $17.7 million in the second quarter of 2017.

On a GAAP basis, the company reported net income of $11.8 million, or $0.41 per diluted share, in the second quarter of 2018. This is compared with $14.1 million, or $0.49 per diluted share, in the first quarter of 2018, and compared with net income of $13.3 million, or $0.47 per diluted share, in the second 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 $13.3 million, or $0.46 per diluted share, in the second quarter of 2018. This is compared with net income of $15.4 million, or $0.54 per diluted share, in the first quarter of 2018, and compared with net income of $15.2 million, or $0.53 per diluted share, in the second quarter of 2017.

Total cash reserves on June 30, 2018 were $168.8 million, compared to $149.8 million on December 31, 2017.

Conference Call Information

Nova will host a conference call today, August 1, 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. Israeli Time

Please reference conference ID 8991200

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 August 1, 2018 at 12 p.m. Eastern Time to August 8, 2018 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:  8991200

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 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


June 30,


December 31,


2018

2017

Current assets






Cash and cash equivalents


27,622


27,697


Short-term interest-bearing bank deposits


140,039


121,390


Trade accounts receivable


43,073


40,949


Inventories


41,332


34,921


Other current assets


3,739


7,313








Total current assets


255,805


232,270








Long-term assets






Long-term interest-bearing bank deposits


1,100


750


   Deferred tax assets


2,514


1,957


   Severance pay funds


1,476


1,503


   Property and equipment, net


13,585


13,891


   Identifiable intangible assets, net


11,493


12,800


   Goodwill


20,114


20,114








Total long-term assets


50,282


51,015








Total assets


306,087


283,285








 LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities






Trade accounts payable


18,545


15,754


   Deferred revenues


9,484


10,334


   Other current liabilities


18,732


26,038








Total current liabilities


46,761


52,126








Long-term liabilities






   Liability for employee severance pay


2,528


2,590


   Other long-term liabilities


2,228


1,833








Total long-term liabilities


4,756


4,423








Shareholders' equity 


254,570


226,736








Total liabilities and shareholders' equity 


306,087


283,285


 

 

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,

 2018


June 30,

 2017


June 30,

 2018


June 30,

 2017









Revenues:








Products

45,784


44,954


95,969


88,470

Services

16,104


11,172


28,522


22,086

Total revenues

61,888


56,126


124,491


110,556









Cost of revenues:








Products

18,002


15,809


35,971


30,929

Services

8,186


6,923


16,463


13,373

Total cost of revenues

26,188


22,732


52,434


44,302









Gross profit

35,700


33,394


72,057


66,254









Operating expenses:








Research and development expenses, net

11,849


9,238


23,075


18,513

Sales and marketing expenses

7,442


5,892


13,673


11,980

General and administrative expenses

2,134


1,938


4,364


3,595

Amortization of acquired intangible assets

654


640


1,307


1,280

Total operating expenses

22,079


17,708


42,419


35,368









Operating income

13,621


15,686


29,638


30,886









Financing income, net

486


525


934


940









Income before tax on income

14,107


16,211


30,572


31,826









Income tax expenses

2,274


2,898


4,659


5,110









Net income for the period

11,833


13,313


25,913


26,716









Earnings per share:








Basic

0.42


0.48


0.93


0.97

Diluted

0.41


0.47


0.91


0.96









Shares used for calculation of earnings per share:
















Basic

27,977


27,655


27,946


27,561

Diluted

28,766


28,562


28,349


27,958

 

 

NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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



Three months ended


Six months ended


June 30,

2018


June 30,

2017


June 30,

2018


June 30,

2017

Cash flows from operating activities:








Net income for the period

11,833


13,313


25,913


26,716


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








Depreciation

1,312


938


2,227


1,893

Amortization of acquired intangible assets

654


640


1,307


1,280

Amortization of deferred stock-based compensation

993


548


1,827


1,211

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

6


41


(35)


73

Deferred tax assets, net

(421)


666


(557)


75

Decrease (increase) in trade accounts receivable

(5,648)


1,887


(2,081)


6,274

Increase in inventories

(2,761)


(3,041)


(7,236)


(4,616)

Decrease (increase) in other current assets

2,068


(1,376)


3,574


(955)

Increase in trade accounts payable

438


2,618


2,791


2,708

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

(4,414)


409


(7,098)


2,288

Increase (decrease) in short term deferred revenues

3,519


3,770


(850)


6,164









Net cash provided by operating activities

7,579


20,413


19,782


43,111









Cash flow from investment activities:








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

(7,841)


(2,581)


(18,999)


(22,659)

Additions to property and equipment

(735)


(847)


(1,096)


(1,267)









Net cash used in investment activities

(8,576)


(3,428)


(20,095)


(23,926)









Cash flows from financing activities:








Shares issued under employee stock-based plans

151


324


238


2,141









Net cash provided by financing activities

151


324


238


2,141









Increase (decrease) in cash and cash equivalents

(846)


17,309


(75)


21,326

Cash and cash equivalents – beginning of period

28,468


24,423


27,697


20,406

Cash and cash equivalents – end of period

27,622


41,732


27,622


41,732

 

 

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,

2018


March 31,

2018


June 30,

2017

GAAP cost of revenues

26,188


26,246


22,732

Stock-based compensation in cost of products

(114)


(92)


(74)

Stock-based compensation in cost of services

(92)


(79)


(56)

Non-GAAP cost of revenues

25,982


26,075


22,602







GAAP gross profit

35,700


36,357


33,394

Gross profit adjustments

206


171


130

Non-GAAP gross profit

35,906


36,528


33,524

GAAP gross margin as a percentage of revenues

58%


58%


59%

Non-GAAP gross margin as a percentage of revenues

58%


58%


60%







GAAP operating expenses

22,079


20,340


17,708

Stock-based compensation in research and development

(386)


(340)


(188)

Stock-based compensation in sales and marketing

(259)


(219)


(146)

Stock-based compensation in general and administrative

(142)


(104)


(84)

Amortization of acquired intangible assets

(654)


(653)


(640)

Non-GAAP operating expenses

20,638


19,024


16,650

Non-GAAP operating income

15,268


17,504


16,874

GAAP operating margin as a percentage of revenues

22%


26%


28%

Non-GAAP operating margin as a percentage of revenues

25%


28%


30%







GAAP tax on income

2,274


2,385


2,898

Certain discrete tax items

137


137


(666)

Non-GAAP tax on income

2,411


2,522


2,232







GAAP net income

11,833


14,080


13,313

Amortization of acquired intangible assets

654


653


640

Stock-based compensation expenses

993


834


548

Certain discrete tax items

(137)


(137)


666

Non-GAAP net income

13,343


15,430


15,167







GAAP basic earnings per share

0.42


0.50


0.48

Non-GAAP basic earnings per share

0.48


0.55


0.55







GAAP diluted earnings per share

0.41


0.49


0.47

Non-GAAP diluted earnings per share

0.46


0.54


0.5 3







Shares used for calculation of earnings per share:






Basic

27,977


27,915


27,655

Diluted

28,766


28,739


28,562








 


 

 

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@novameasuring.com  

E-mail: msegal@ms-ir.com

www.novami.com


 

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SOURCE Nova

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