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Nova Reports Fourth Quarter and Full Year 2019 Results

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REHOVOT, Israel, Feb. 13, 2020 /PRNewswire/ -- Nova (NASDAQ:NVMI) today announced financial results for the fourth quarter and full year 2019.

Fourth Quarter 2019 Highlights:

  • Quarterly revenue of $64.6 million, exceeding guidance of $56 million to $62 million.
  • GAAP net income of $12.4 million, or $0.43 per diluted share, exceeding guidance of $0.32 to $0.42 per share.
  • Non-GAAP net income of $14.6 million, or $0.51 per diluted share, exceeding guidance of $0.40 to $0.50 per share.
  • Accelerated deliveries to leading edge Foundry to support its most advanced technology nodes.
  • Received initial orders for the new Dimensional Stand-Alone Platform, the NovaPRISM™.

Full Year 2019 Highlights:

  • Full year revenue of $224.9 million.
  • GAAP net income of $35.2 million, or $1.23 per diluted share.
  • Non-GAAP net income of $45.5 million, or $1.59 per diluted share.
  • Balanced products revenue mix.  Foundry and Memory contributing approximately 50% each.

GAAP Results ($K)


Q4 2019

Q3 2019

Q4 2018

FY 2019

FY 2018

Revenues

$64,625

$52,507

$63,072

$224,909

$251,134

Net Income

$12,385

$8,562

$15,152

$35,171

$54,375

Earnings per Diluted Share

$0.43

$0.30

$0.53

$1.23

$1.89

NON-GAAP Results ($K)


Q4 2019

Q3 2019

Q4 2018

FY 2019

FY 2018

Net Income

$14,561

$11,507

$16,914

$45,523

$60,766

Earnings per Diluted Share

$0.51

$0.40

$0.59

$1.59

$2.11

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

"Nova reported strong results for the fourth quarter, demonstrating the meaningful value our differentiated portfolio brings to our customers. Our sound performance drove revenue and profitability to exceed the company's guidance and propelled our quarterly revenue to a new record high," commented Eitan Oppenhaim, President and Chief Executive Officer. "This was an excellent conclusion to a volatile year during which we continued to strengthen our position and expand our unique portfolio to support our long-term growth. As we enter a new calendar year, we are excited by multiple opportunities associated with the technology enhancements our customers implement. Following our major investment in new products' development, we believe that Nova is well positioned to capitalize on these opportunities in 2020."

2020 First Quarter Financial Outlook

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

  • $50 million to $60 million in revenue
  • $0.18 to $0.34 in diluted GAAP EPS
  • $0.26 to $0.42 in diluted non-GAAP EPS

2019 Fourth Quarter Results

Total revenues for the fourth quarter of 2019 were $64.6 million, an increase of 23% compared to the third quarter of 2019 and increase of 2% compared to the fourth quarter of 2018.

Gross margin for the fourth quarter of 2019 was 54%, compared to a gross margin of 52% in the third quarter of 2019, and compared to the gross margin of 57% in the fourth quarter of 2018.

Operating expenses in the fourth quarter of 2019 were $20.1 million, compared with $21.0 in the third quarter of 2019 and compared with $20.7 million in the fourth quarter of 2018.

On a GAAP basis, the company reported net income of $12.4 million, or $0.43 per diluted share, in the fourth quarter of 2019. This is compared with $8.6 million, or $0.30 per diluted share, in the third quarter of 2019, and compared with net income of $15.2 million, or $0.53 per diluted share, in the fourth 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 $14.6 million, or $0.51 per diluted share, in the fourth quarter of 2019. This is compared with net income of $11.5 million, or $0.40 per diluted share, in the third quarter of 2019, and compared with net income of $16.9 million, or $0.59 per diluted share, in the fourth quarter of 2018.

2019 Full Year Results

Total revenues for 2019 were $224.9 million, a decrease of 10% compared to total revenues of $251.1 million for 2018.

Gross margin in 2019 was 54%, compared with gross margin of 58% in 2018.

Operating expenses in 2019 were $85.4 million, compared with operating expenses of $84.8 in 2018.

On a GAAP basis, the company reported net income of $35.2 million, or $1.23 per diluted share, in 2019. This is compared with a net income of $54.4 million, or $1.89 per diluted share, in 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 $45.5 million, or $1.59 per diluted share, in 2019. This is compared with net income of $60.8 million, or $2.11 per diluted share, in 2018.

Conference Call Information

Nova will host a conference call today, February 13, 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. 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 7996016

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 February 13, 2020 at 12 p.m. Eastern Time to February 20, 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
TOLL/INTERNATIONAL 1-412-317-6671

Replay Pin Number: 7996016

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 December 31,


ASSETS


2019


2018


Current assets






Cash and cash equivalents


31,748


22,877


Short-term interest-bearing bank deposits


157,346


152,951


Trade accounts receivable


51,603


53,531


Inventories


48,362


41,786


Other current assets


17,122


10,961








Total current assets


306,181


282,106








Long-term assets






Long-term interest-bearing bank deposits


2,000


2,000


Deferred tax assets


4,554


3,873


Severance pay funds


1,210


1,394


Property and equipment, net


30,566


13,756


Identifiable intangible assets, net


7,562


10,187


Operating lease right-of-use assets


28,256


-


Goodwill


20,114


20,114








Total long-term assets


94,262


51,324








Total assets


400,443


333,430



 LIABILITIES AND SHAREHOLDERS' EQUITY






Current liabilities






Trade accounts payable


20,706


19,015


Deferred revenues


2,256


3,984


Operating lease current liabilities


3,382


-


Other current liabilities


21,751


25,079








Total current liabilities


48,095


48,078








Long-term liabilities






Liability for employee severance pay


2,120


2,254


Operating lease long-term liabilities


29,931


-


Other long-term liabilities


5,758


2,358








Total long-term liabilities


37,809


4,612








Shareholders' equity


314,539


280,740








Total liabilities and shareholders' equity 


400,443


333,430


 

 

 

NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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



Three months ended

December 31,


Year ended

 December 31,


2019


2018


2019


2018









Revenues:








Products

47,015


48,376


167,200


193,298

Services

17,610


14,696


57,709


57,836

Total revenues

64,625


63,072


224,909


251,134









Cost of revenues:








Products

18,854


18,120


67,300


71,706

Services

11,138


9,242


35,789


34,194

Total cost of revenues

29,992


27,362


103,089


105,900









Gross profit

34,633


35,710


121,820


145,234









Operating expenses:








Research and development expenses, net

9,722


10,490


44,508


45,451

Sales and marketing expenses

7,270


7,303


28,213


27,992

General and administrative expenses

2,502


2,209


10,066


8,735

Amortization of acquired intangible
assets

656


654


2,625


2,614

Total operating expenses

20,150


20,656


85,412


84,792









Operating income

14,483


15,054


36,408


60,442









Financing income, net

826


1,178


3,078


2,984









Income before tax on income

15,309


16,232


39,486


63,426









Income tax expenses

2,924


1,080


4,315


9,051









 

Net income for the period

12,385


15,152


35,171


54,375









Earnings per share:








Basic

0.44


0.54


1.26


1.94

Diluted

0.43


0.53


1.23


1.89









Shares used for calculation of earnings per
share:
















Basic

27,965


28,026


27,895


28,022

Diluted

28,689


28,655


28,574


28,765

 

 

 

NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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



Three months ended

December 31,


Year ended

 December 31,


2019


2018


2019


2018

Cash flows from operating activities:








Net income for the period

12,385


15,152


35,171


54,375


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








Depreciation and amortization

1,086


2,150


10,398


7,684

Amortization of deferred stock-based
compensation

1,430


1,245


5,092


4,326

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

(2)


(174)


50


(227)

Deferred tax assets, net

73


(1,171)


(681)


(1,916)

Decrease (increase) in trade accounts receivable

(4,549)


(5,460)


1,928


(12,539)

Decrease (increase) in inventories

1,669


(119)


(7,518)


(8,123)

Increase in other current and long-term assets

(1,561)


(4,717)


(6,161)


(3,648)

Increase in trade accounts payable

2,117


1,395


1,691


3,261

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

4,292


6,860


2,960


(734)

Decrease in short term deferred revenues

(1,459)


(2,267)


(1,728)


(6,350)









Net cash provided by operating activities

15,481


12,894


41,202


36,109









Cash flow from investment activities:








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

(4,430)


*(7,151)


(4,395)


*(31,561)

Additions to property and equipment

(5,648)


(1,899)


(21,269)


(3,678)









Net cash used in investment activities

(10,078)


*(9,050)


(25,664)


*(35,239)









Cash flows from financing activities:








Purchases of treasury shares

-


(4,801)


(7,159)


(4,801)

Shares issued under employee stock-based plans

125


67


492


361









Net cash provided by (used in) financing
activities

125


(4,734)


(6,667)


(4,440)









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

5,528


*(890)


8,871


*(3,570)

Cash and cash equivalents and restricted
cash – beginning of period

28,220


*25,767


24,877


*28,447

Cash and cash equivalents and restricted
cash – end of period

33,748


*24,877


33,748


*24,877









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








Cash and cash equivalents

31,748


22,877


31,748


22,877

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

33,748


24,877


33,748


24,877

 

*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


December 31,
2019


September 30,
2019


December 31,
2018

GAAP gross profit

34,633


27,493


35,710

Stock-based compensation expenses *

269


277


269

Facilities transition costs

-


220


-

Non-GAAP gross profit

34,902


27,990


35,979

GAAP gross margin as a percentage of revenues

54%


52%


57%

Non-GAAP gross margin as a percentage of revenues

54%


53%


57%







GAAP operating income

14,483


6,474


15,054

Stock-based compensation expenses *

1,430


1,364


1,245

Amortization of acquired intangible assets

656


657


654

Facilities transition costs

-


888


-

Non-GAAP operating income

16,569


9,383


16,953

GAAP operating margin as a percentage of revenues

22%


12%


24%

Non-GAAP operating margin as a percentage of revenues

26%


18%


27%







GAAP net income

12,385


8,562


15,152

Stock-based compensation expenses *

1,430


1,364


1,245

Amortization of acquired intangible assets

656


657


654

Facilities transition costs

-


888


-

Revaluation of long-term liabilities

269


362


-

Tax effect of non-GAAP adjustments

(179)


(326)


(137)

Non-GAAP net income

14,561


11,507


16,914







GAAP basic earnings per share

0.44


0.31


0.54

Non-GAAP basic earnings per share

0.52


0.41


0.60







GAAP diluted earnings per share

0.43


0.30


0.53

Non-GAAP diluted earnings per share

0.51


0.40


0.59







Shares used for calculation of earnings per share:






Basic

27,965


27,826


28,026

Diluted

28,689


28,474


28,655


* Stock-based compensation expenses for the three months ended December 31, 2019 included in – Cost of
revenues products - 109; Cost of revenues services - 160; Research and development expenses, net – 724;
Sales and marketing expenses – 352; General and administrative expenses – 85.

 

 

 

NOVA MEASURING INSTRUMENTS LTD.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

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



Year ended December 31,



2019


2018

GAAP gross profit

121,820


145,234

Stock-based compensation expenses (1)

1,003


929

Facilities transition costs (2)

703


-

Non-GAAP gross profit

123,526


146,163

GAAP gross margin as a percentage of revenues

54%


58%

Non-GAAP gross margin as a percentage of revenues

55%


58%





GAAP operating income

36,408


60,442

Stock-based compensation expenses (1)

5,092


4,326

Amortization of acquired intangible assets

2,625


2,614

Facilities transition costs (2)

2,329


-

Non-GAAP operating income

46,454


67,382

GAAP operating margin as a percentage of revenues

16%


24%

Non-GAAP operating margin as a percentage of revenues

21%


27%





GAAP net income

35,171


54,375

Stock-based compensation expenses (1)

5,092


4,326

Amortization of acquired intangible assets

2,625


2,614

Facilities transition costs (2)

2,329


-

Revaluation of long-term liabilities

1,410


-

Tax effect of non-GAAP adjustments

(1,104)


(549)

Non-GAAP net income

45,523


60,766





GAAP basic earnings per share

1.26


1.94

Non-GAAP basic earnings per share

1.63


2.17





GAAP diluted earnings per share

1.23


1.89

Non-GAAP diluted earnings per share

1.59


2.11





Shares used for calculation of earnings per share:




Basic

27,895


28,022

Diluted

28,574


28,765


(1)  Stock-based compensation expenses for the year ended December 31, 2019 included in – Cost of
revenues products - 534; Cost of revenues services - 469; Research and development expenses, net –
2,206; Sales and marketing expenses – 1,121; General and administrative expenses – 762.

(2)  Facilities transition costs for the year ended December 31, 2019 included in – Cost of revenues
products - 457; Cost of revenues services - 246; Research and development expenses, net – 743; Sales
and marketing expenses – 285; General and administrative expenses – 598.

 

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

Tel: +917-607-8654


Cision View original content:http://www.prnewswire.com/news-releases/nova-reports-fourth-quarter-and-full-year-2019-results-301004463.html

SOURCE Nova

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