Market Overview

Nova Reports First Quarter 2020 Results, Exceeds Guidance

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REHOVOT, Israel, May 14, 2020 /PRNewswire/ -- Nova (NASDAQ:NVMI) today announced financial results for the first quarter ended March 31st, 2020.

First Quarter 2020 Highlights:

  • Quarterly revenue of $61.0 million, exceeding guidance of $50 million to $60 million.
  • GAAP net income of $11.7 million, or $0.41 per diluted share, exceeding guidance of $0.18 to $0.34 per share.
  • Non-GAAP net income of $13.5 million, or $0.47 per diluted share, exceeding guidance of $0.26 to $0.42 per share.
  • Balanced product revenue mix across Logic/Foundry and Memory.
  • Nova's optical metrology solutions selected by leading global logic manufacturer for its global logic fabrication sites. Initial revenues were recognized in the first quarter of 2020.

 

GAAP Results ($K)


Q1 2020

Q4 2019

Q1 2019

Revenues

$61,022

$64,625

$56,657

Net Income

$11,682

$12,385

$7,756

Earnings per Diluted Share

$0.41

$0.43

$0.27

NON-GAAP Results ($K)


Q1 2020

Q4 2019

Q1 2019

Net Income

$13,481

$14,561

$10,449

Earnings per Diluted Share

$0.47

$0.51

$0.37


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 performed well this quarter with revenue and profitability exceeding the guidance. These financial results demonstrate our solid execution capabilities as well as our resilient and agile operational model, which allows us to adapt quickly to uncertainties in the market," commented Eitan Oppenhaim, President and Chief Executive Officer. "Amid the global spread of the pandemic, our focus continues to be on the safety and well-being of our employees and partners. Although the market is still vulnerable, we have already taken the required measures to protect our production lines and supply chain to ensure business continuity throughout the year."

2020 Second Quarter Financial Outlook

Management provided an outlook for the second quarter, the period ending June 30, 2020. Based on current estimates, management expects:

  • $58 million to $66 million in revenue
  • $0.29 to $0.43 in diluted GAAP EPS
  • $0.37 to $0.51 in diluted non-GAAP EPS

2020 First Quarter Results

Total revenues for the first quarter of 2020 were $61.0 million, a decrease of 6% compared to the fourth quarter of 2019 and an increase of 8% compared to the first quarter of 2019.

Gross margin for the first quarter of 2020 was 56%, compared to a gross margin of 54% in the fourth quarter of 2019, and compared to gross margin of 56% in the first quarter of 2019.

Operating expenses in the first quarter of 2020 were $21.5 million, compared with $20.1 million in the fourth quarter of 2019 and compared with $22.9 million in the first quarter of 2019.

On a GAAP basis, the company reported net income of $11.7 million, or $0.41 per diluted share, in the first quarter of 2020. This is compared with net income of $12.4 million, or $0.43 per diluted share, in the fourth quarter of 2019, and compared with net income of $7.8 million, or $0.27 per diluted share, in the first quarter of 2019.

On a non-GAAP basis, which excludes 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 $13.5 million, or $0.47 per diluted share, in the first quarter of 2020. This is compared with net income of $14.6 million, or $0.51 per diluted share, in the fourth quarter of 2019, and compared with net income of $10.4 million, or $0.37 per diluted share, in the first quarter of 2019.

Conference Call Information

Nova will host a conference call today, May 14, 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: 1-866-548-4713
ISRAEL TOLL-FREE Dial-in Number: 1-809-212-883
INTERNATIONAL Dial-in Number: 1-323-794-2093

At:
9 a.m. Eastern Time
6 a.m. Pacific Time
4 p.m. Israel Time

Please reference conference ID: 6871888

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 May 14, 2020 at 12 p.m. Eastern Time to May 21, 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: 6871888

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 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 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

(Tables to Follow)

 


NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

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



As of


ASSETS


March 31,

2020


December 31,

2019


Current assets






Cash and cash equivalents


35,531


31,748


Short-term interest-bearing bank deposits


162,155


154,533


Trade accounts receivable


55,043


51,603


Inventories


49,779


48,362


Other current assets


13,429


17,122








Total current assets


315,937


303,368








Non-current assets






Interest-bearing bank deposits


2,726


2,813


Restricted interest-bearing bank deposits


2,000


2,000


Deferred tax assets


4,755


4,554


Severance pay funds


1,158


1,210


Right of-use assets


27,545


28,256


Property and equipment, net


31,460


30,566


Intangible assets, net


6,936


7,562


Goodwill


20,114


20,114








Total non-current assets


96,694


97,075








Total assets


412,631


400,443








 LIABILITIES AND SHAREHOLDERS' EQUITY






Current liabilities






Trade accounts payable


18,451


20,706


Deferred revenues


2,602


2,256


Operating lease current liabilities


2,020


2,236


Other current liabilities


23,220


21,751








Total current liabilities


46,293


46,949








Non-current liabilities






Accrued severance pay


2,054


2,120


Operating lease long-term liabilities


30,370


31,077


Other long-term liability


6,025


5,758








Total non-current liabilities


38,449


38,955








Shareholders' equity


327,889


314,539








Total liabilities and shareholders' equity 


412,631


400,443


 

 


NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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





Three months ended

March 31,






2020


2019









Revenues:








Products





45,725


44,061

Services





15,297


12,596

Total revenues





61,022


56,657









Cost of revenues:








Products





18,040


17,577

Services





8,640


7,496

Total cost of revenues





26,680


25,073









Gross profit





34,342


31,584









Operating expenses:








Research and development, net





11,683


12,584

Sales and marketing





6,563


7,146

General and administrative





2,589


2,522

Amortization of acquired intangible assets





626


656

Total operating expenses





21,461


22,908









Operating income





12,881


8,676









Financing income, net





1,028


510









Income before taxes on income





13,909


9,186









Income tax expenses





2,227


1,430









Net income for the period





11,682


7,756









Earnings per share:








Basic





0.42


0.28

Diluted





0.41


0.27









Shares used for calculation of earnings per
share:
















Basic





27,902


27,932

Diluted





28,760


28,580

 

 

NOVA MEASURING INSTRUMENTS LTD.


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


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





Three months ended




March 31,

2020


March 31,

2019


Cash flows from operating activities:






Net income for the period


11,682


7,756








Adjustments to reconcile net income to net cash

provided by operating activities:






Depreciation and amortization


2,744


2,700


Stock-based compensation


1,318


1,212


Change in deferred tax assets, net


654


(197)


Change in accrued severance pay, net


(14)


33


Change in trade accounts receivable


(3,440)


6,610


Change in inventories


(1,448)


(4,532)


Change in other current and long-term assets


3,693


602


Change in trade accounts payable


(2,255)


3,304


Change in other current and long-term liabilities


211


(1,122)


Change in short term deferred revenues


346


1,134








Net cash provided by operating activities


13,491


17,500








Cash flow from investment activities:






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


(7,535)


(2,372)


Purchase of property and equipment


(2,270)


(1,977)








Net cash used in investment activities


(9,805)


(4,349)








Cash flows from financing activities:






Purchases of treasury shares


(14)


-


Shares issued upon exercise of options


111


106








Net cash provided by financing activities


97


106








Increase in cash and cash equivalents and restricted cash


3,783


13,257


Cash and cash equivalents – beginning of period


31,748


24,877


Cash and cash equivalents – end of period


35,531


38,134








 

 

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,

2020



December 31,

2019



March 31,

2019


GAAP gross profit

34,342


34,633


31,584

Stock-based compensation expenses *

256


269


234

Facilities transition costs

-


-


212

Non-GAAP gross profit

34,598


34,902


32,030

GAAP gross margin as a percentage of revenues

56%


54%


56%

Non-GAAP gross margin as a percentage of revenues

57%


54%


57%







GAAP operating income

12,881


14,483


8,676

Stock-based compensation expenses *

1,318


1,430


1,212

Amortization of acquired intangible assets

626


656


656

Facilities transition costs

-


-


614

Non-GAAP operating income

14,825


16,569


11,158

GAAP operating margin as a percentage of revenues

21%


22%


15%

Non-GAAP operating margin as a percentage of revenues

24%


26%


20%







GAAP net income

11,682


12,385


7,756

Stock-based compensation expenses *

1,318


1,430


1,212

Amortization of acquired intangible assets

626


656


656

Facilities transition costs

-


-


614

Revaluation of long-term liabilities

(66)


269


484

Tax effect of non-GAAP adjustments

(79)


(179)


(273)

Non-GAAP net income

13,481


14,561


10,449







GAAP basic earnings per share

0.42


0.44


0.28

Non-GAAP basic earnings per share

0.48


0.52


0.37







GAAP diluted earnings per share

0.41


0.43


0.27

Non-GAAP diluted earnings per share

0.47


0.51


0.37







Shares used for calculation of earnings per share:






Basic

27,902


27,965


27,932

Diluted

28,760


28,689


28,580








* Stock-based compensation expenses for the three months ended March 31, 2020 included in – Cost of revenues
products - 206; Cost of revenues services - 50; Research and development expenses, net – 335; Sales and marketing
expenses – 346; General and administrative expenses – 381.


 

 

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

 

 

 

Cision View original content:http://www.prnewswire.com/news-releases/nova-reports-first-quarter-2020-results-exceeds-guidance-301059308.html

SOURCE Nova

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