Nova Reports Third Quarter 2019 Results
REHOVOT, Israel, Nov. 7, 2019 /PRNewswire/ -- Nova (Nasdaq: NVMI) today announced financial results for the third quarter 2019, the period ended September 30, 2019.
Third Quarter 2019 Highlights:
-- Quarterly revenue of $52.5 million, meeting guidance of $46 million to
$54 million
-- GAAP net income of $8.6 million, or $0.30 per diluted share, exceeding
guidance of $0.11 to
-- $0.24 per share
-- Non-GAAP net income of $11.5 million, or $0.40 per diluted share,
exceeding guidance of $0.20 to $0.34 per share
-- Accelerated deliveries to leading edge Foundry to support expansion of
its most advanced technology node
-- Balanced revenue contribution across segments, geographies and customers
GAAP Results ($K)
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Q3 2019
Q2 2019
Q3 2019
---
Revenues $52,507 $51,120 $63,571
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Net Income $8,562 $6,468 $13,310
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Earnings per Diluted Share $0.30 $0.23 $0.46
---
NON-GAAP Results ($K)
---
Q3 2019
Q2 2019
Q3 2018
---
Net Income $11,507 $9,007 $15,080
---
Earnings per Diluted Share $0.40 $0.32 $0.52
---
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
"We are pleased with our performance during the third quarter of the year despite the varying market conditions. Based on our focused efforts to execute our plans, revenues came in at the high end of the guidance, while profitability exceeded the guidance range," commented Eitan Oppenhaim, President and Chief Executive Officer. "Our solid performance during different industry cycles is a result of our technology differentiation, operational efficiency and growing exposure to leading customers from all segments. Following our continuous investment in innovative development, the company is well positioned to capitalize on multiple opportunities once markets resume growth."
2019 Fourth Quarter Financial Outlook
Management provided an outlook for the fourth quarter, the period ending December 31, 2019. Based on current estimates, management expects:
-- $56 million to $62 million in revenue
-- $0.32 to $0.42 in diluted GAAP EPS
-- $0.40 to $0.50 in diluted non-GAAP EPS
2019 Third Quarter Results
Total revenues for the third quarter of 2019 were $52.5 million, an increase of 3% compared to the second quarter of 2019 and decrease of 17% compared to the third quarter of 2018.
Gross margin for the third quarter of 2019 was 52%, compared to a gross margin of 55% in the second quarter of 2019, and compared to the gross margin of 59% in the third quarter of 2018.
Operating expenses in the third quarter of 2019 were $21.0 million, compared with $21.3 in the second quarter of 2019 and compared with $21.7 million in the third quarter of 2018.
On a GAAP basis, the company reported net income of $8.6 million, or $0.30 per diluted share, in the third quarter of 2019. This is compared with $6.5 million, or $0.23 per diluted share, in the second quarter of 2019, and compared with net income of $13.3 million, or $0.46 per diluted share, in the third 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 $11.5 million, or $0.40 per diluted share, in the third quarter of 2019. This is compared with net income of $9.0 million, or $0.32 per diluted share, in the second quarter of 2019, and compared with net income of $15.1 million, or $0.52 per diluted share, in the third quarter of 2018.
Conference Call Information
Nova will host a conference call today, November 7, 2019, 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: 1-800-239-9838
ISRAEL Dial-in Number: 1-809-212-883
INTERNATIONAL Dial-in Number: 1-323-794- 2551
At:
9 a.m. Eastern Time
6 a.m. Pacific Time
4 p.m. Israeli Time
Please reference conference ID 6009704
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 November 7, 2019 at 12 p.m. Eastern Time to November 14, 2019 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: 6009704
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
ASSETS September 30, December 31,
2019 2018
Current assets
Cash and cash equivalents 26,220 22,877
Short-term interest-bearing
bank deposits 152,916 152,951
Trade accounts receivable 47,054 53,531
Inventories 50,143 41,786
Other current assets 15,561 10,961
Total current assets 291,894 282,106
Long-term assets
Long-term interest-bearing
bank deposits 2,000 2,000
Deferred tax assets 4,627 3,873
Severance pay funds 1,185 1,394
Property and equipment, net 25,914 13,756
Identifiable intangible assets,
net 8,227 10,187
Operating lease right-of-use
assets 25,415
Goodwill 20,114 20,114
Total long-term assets 87,482 51,324
Total assets 379,376 333,430
LiabIlities and shareholders'
Equity
Current liabilities
Trade accounts payable 18,589 19,015
Deferred revenues 3,715 3,984
Operating lease current
liabilities 3,620
Other current liabilities 20,340 25,079
Total current liabilities 46,264 48,078
Long-term liabilities
Liability for employee
severance pay 2,097 2,254
Operating lease long-term
liabilities 25,199
Other long-term liabilities 5,180 2,358
Total long-term liabilities 32,476 4,612
Shareholders' equity 300,636 280,740
Total liabilities and
shareholders' equity 379,376 333,430
NOVA MEASURING INSTRUMENTS LTD.
---
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
---
(U.S. dollars in thousands, except per share data) - (Unaudited)
Three months ended Nine months ended
September 30, September 30, September 30, September 30,
2019 2018 2019 2018
---
Revenues:
Products 38,723 48,953 120,185 144,922
Services 13,784 14,618 40,099 43,140
Total revenues 52,507 63,571 160,284 188,062
Cost of revenues:
Products 16,342 17,615 48,446 53,586
Services 8,672 8,489 24,651 24,952
Total cost of revenues 25,014 26,104 73,097 78,538
Gross profit 27,493 37,467 87,187 109,524
Operating expenses:
Research and development
expenses, net 10,548 11,886 34,786 34,961
Sales and marketing
expenses 7,156 7,016 20,943 20,689
General and administrative
expenses 2,658 2,162 7,564 6,526
Amortization of acquired
intangible assets 657 653 1,969 1,960
Total operating expenses 21,019 21,717 65,262 64,136
Operating income 6,474 15,750 21,925 45,388
Financing income, net 887 872 2,252 1,806
Income before tax on
income 7,361 16,622 24,177 47,194
Income tax expenses
(income) (1,201) 3,312 1,391 7,971
Net income for the period 8,562 13,310 22,786 39,223
Earnings per share:
Basic 0.31 0.47 0.82 1.40
Diluted 0.30 0.46 0.80 1.36
Shares used for calculation of earnings per share:
Basic 27,826 28,047 27,935 27,980
Diluted 28,474 28,777 28,599 28,761
NOVA MEASURING INSTRUMENTS LTD.
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
---
(U.S. dollars in thousands) - (Unaudited)
Three months ended Nine months ended
September 30, September 30, September 30, September 30,
2019 2018 2019 2018
---
Cash flows from operating activities:
Net income for the
period 8,562 13,310 22,786 39,223
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and
amortization 3,842 2,000 9,312 5,534
Amortization of
deferred stock-based
compensation 1,364 1,254 3,662 3,081
Decrease (increase) in
liability for
employee termination
benefits, net 25 (18) 52 (53)
Deferred tax assets,
net (410) (188)
( 754) (745)
Decrease (increase) in
trade accounts
receivable 1,024 (4,998) 6,477 (7,079)
Increase in
inventories (1,332) (768) (9,187) (8,004)
Decrease (increase) in
other current assets (7,180) (2,505) (4,600) 1,069
Increase (decrease) in
trade accounts
payable 1,700 (925) (426) 1,866
Increase (decrease) in
other current
liabilities and other
long-term
liabilities 3,247 (496) (1,332) (7,594)
Decrease in short term
deferred revenues (1,599) (3,233) (269) (4,083)
Net cash provided by
operating activities 9,243 3,433 25,721 23,215
Cash flow from investment activities:
Decrease (increase) in
short-term and long-
term interest-
bearing bank deposits (6,040) *(5,761) 35 *(24,410)
Additions to property
and equipment (7,928) (683) (15,621) (1,779)
Net cash used in
investment activities (13,968) *(6,444) (15,586) *(26,189)
Cash flows from financing activities:
Purchases of treasury
shares - (7,159)
Shares issued under
employee stock-based
plans 95 56 367 294
Net cash provided by
(used in) financing
activities 95 56 (6,792) 294
Increase (decrease) in
cash and cash
equivalents and
restricted cash (4,630) *(2,955) 3,343 *(2,680)
Cash and cash
equivalents and
restricted cash -
beginning of period 32,850 *28,722 24,877 *28,447
Cash and cash
equivalents and
restricted cash - end
of period 28,220 *25,767 28,220 *25,767
Reconciliation of cash, cash equivalents, and restricted cash
to the consolidated balance sheet
Cash and cash
equivalents 26,220 23,767 26,220 23,767
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 28,220 25,767 28,220 25,767
*reclassified
NOVA MEASURING INSTRUMENTS LTD.
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RECONCILIATION OF GAAP TO NON-GAAP RESULTS
---
(U.S. dollars in thousands, except percentage and per share data) - (Unaudited)
Three months ended
September
30, June 30, September
30,
2019 2019 2018
---
GAAP gross profit 27,493 28,110 37,467
Stock-based compensation
expenses (1) 277 222 283
Facilities transition
costs (2) 220 271 -
Non-GAAP gross profit 27,990 28,603 37,750
GAAP gross margin as a
percentage of revenues 52% 55% 59%
Non-GAAP gross margin as a
percentage of revenues 53% 56% 59%
GAAP operating income 6,474 6,775 15,750
Stock-based compensation
expenses (1) 1,364 1,086 1,254
Amortization of acquired
intangible assets 657 656 653
Facilities transition
costs (2) 888 827 -
Non-GAAP operating income 9,383 9,344 17,657
GAAP operating margin as a
percentage of revenues 12% 13% 25%
Non-GAAP operating margin
as a percentage of
revenues 18% 18% 28%
GAAP net income 8,562 6,468 13,310
Stock-based compensation
expenses (1) 1,364 1,086 1,254
Amortization of acquired
intangible assets 657 656 653
Facilities transition
costs (2) 888 827 -
Revaluation of long-term
liabilities 362 295 -
Tax effect of non-GAAP
adjustments (326) (325) (137)
Non-GAAP net income 11,507 9,007 15,080
GAAP basic earnings per
share 0.31 0.23 0.47
Non-GAAP basic earnings
per share 0.41 0.32 0.54
GAAP diluted earnings per
share 0.30 0.23 0.46
Non-GAAP diluted earnings
per share 0.40 0.32 0.52
Shares used for calculation of earnings per share:
Basic 27,826 27,869 28,047
Diluted 28,474 28,564 28,777
(1) Stock-based compensation expenses for the three months ended September 30, 2019 included in - Cost of revenues products - 161; Cost of revenues
services - 116; Research and development expenses, net - 534; Sales and marketing expenses - 296; General and administrative expenses - 257.
(2) Facilities transition costs for the three months ended September 30, 2019 included in - Cost of revenues products -144; Cost of revenues services
-76; Research and development expenses, net - 295; Sales and marketing expenses - 110; General and administrative expenses - 264
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
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SOURCE Nova
