Nova Reports Fourth Quarter and Full Year 2019 Results
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(TM).
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 Year ended December 31, 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 656 654 2,625 2,614 assets 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 --- 12,385 15,152 35,171 54,375 Net income for the period 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 Year ended December 31, 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 1,430 1,245 5,092 4,326 compensation Decrease (increase) in liability for employee (2) (174) 50 (227) termination benefits, net 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 4,292 6,860 2,960 (734) and other long-term liabilities 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- (4,430) *(7,151) (4,395) *(31,561) bearing bank deposits 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 125 (4,734) (6,667) (4,440) activities --- Increase (decrease) in cash and cash 5,528 *(890) 8,871 *(3,570) equivalents and restricted cash Cash and cash equivalents and restricted 28,220 *25,767 24,877 *28,447 cash - beginning of period Cash and cash equivalents and restricted 33,748 *24,877 33,748 *24,877 cash - end of period === 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- 2,000 2,000 2,000 2,000 bearing bank deposits Total cash, cash equivalents, and restricted 33,748 24,877 33,748 24,877 cash === *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, September 30, December 31, 2019 2019 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
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SOURCE Nova