Nova Reports First Quarter 2020 Results, Exceeds Guidance
REHOVOT, Israel, May 14, 2020 /PRNewswire/ -- Nova (Nasdaq: NVMI) today announced financial results for the first quarter ended March 31(st), 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)
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Q1 2020
Q4 2019
Q1 2019
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Revenues $61,022 $64,625 $56,657
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Net Income $11,682 $12,385 $7,756
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Earnings per Diluted Share $0.41 $0.43 $0.27
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NON-GAAP Results ($K)
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Q1 2020
Q4 2019
Q1 2019
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Net Income $13,481 $14,561 $10,449
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Earnings per Diluted Share $0.47 $0.51 $0.37
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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.
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CONDENSED CONSOLIDATED BALANCE SHEETS
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(U.S. dollars in thousands) - (Unaudited)
As of
ASSETS March 31,
December 31,
2020 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.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(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.
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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(U.S. dollars in thousands) - (Unaudited)
Three months ended
March 31, March 31,
2020 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.
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RECONCILIATION OF GAAP TO NON-GAAP RESULTS
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(U.S. dollars in thousands, except percentage and per share data) - (Unaudited)
Three months ended
March 31, December 31, March 31,
2019
2020
2019
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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:
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
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SOURCE Nova
