Nova Reports Second Quarter 2020 Results
REHOVOT, Israel, Aug. 4, 2020 /PRNewswire/ -- Nova (Nasdaq: NVMI) today announced financial results for the second quarter 2020, the period ended June 30, 2020.
Second Quarter 2020 Highlights:
-- Quarterly revenue of $62.6 million, meeting guidance of $58 million to
$66 million
-- GAAP net income of $8.7 million, or $0.30 per diluted share, meeting
guidance of $0.29 to $0.43 per share
-- Non-GAAP net income of $13.8 million, or $0.48 per diluted share,
meeting guidance of $0.37 to $0.51 per share
-- Balanced revenue mix with five major customers contributing over 10%
each to the geographically diverse product revenue
-- Record quarterly integrated metrology revenues, driven by growing demand
for advanced integrated solutions across different technology nodes
GAAP Results ($K)
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Q2 2020 Q1 2020 Q2 2019
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Revenues $62,586 $61,022 $51,120
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Net Income $8,672 $11,682 $6,468
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Earnings per Diluted Share $0.30 $0.41 $0.23
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NON-GAAP Results ($K)
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Q2 2020 Q1 2020 Q2 2019
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Net Income $13,774 $13,481 $9,007
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Earnings per Diluted Share $0.48 $0.47 $0.32
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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, expense related to a transaction made by a financial institution without Company authorization, facilities transition costs, revaluation of long-term liabilities and tax effect of non-GAAP adjustments.
Management Comments
"Our second quarter results met our expectations and Company guidance, highlighting our ability to successfully navigate through the dynamic global environment caused by the COVID-19 pandemic. The success of our decisive actions to secure our supply chain and production capabilities, while ensuring business continuity, is evident in our achievements this quarter. During the second quarter, we continued to execute well and achieved important milestones in our new product rollout plans with several leading customers," stated Eitan Oppenhaim, President and Chief Executive Officer. "Despite various market uncertainties, we remain focused on the Company's growth as we leverage the current steady demand for our products."
2020 Third Quarter Financial Outlook
Management provided an outlook for the third quarter, the period ending September 30, 2020. Based on current estimates, management expects:
-- $58 million to $66 million in revenue
-- $0.25 to $0.39 in diluted GAAP EPS
-- $0.34 to $0.47 in diluted non-GAAP EPS
2020 Second Quarter Results
Total revenues for the second quarter of 2020 were $62.6 million, an increase of 2.6% compared with the first quarter of 2020 and an increase of 22.4% compared with the second quarter of 2019.
Gross margin for the second quarter of 2020 was 58.5%, compared with a gross margin of 56.3% in the first quarter of 2020, and compared with a gross margin of 55.0% in the second quarter of 2019.
Operating expenses in the second quarter of 2020 were $26.3 million, compared with $21.5 million in the first quarter of 2020 and compared with $21.3 million in the second quarter of 2019.
On a GAAP basis, the Company reported net income of $8.7 million, or $0.30 per diluted share, in the second quarter of 2020. This is compared with net income of $11.7 million, or $0.41 per diluted share, in the first quarter of 2020, and compared with net income of $6.5 million, or $0.23 per diluted share, in the second quarter of 2019.
On a non-GAAP basis, which excludes amortization of acquired intangible assets, stock-based compensation expenses, one-time expense related to a transaction made by a financial institution without Company authorization, facilities transition costs, revaluation of long-term liabilities and tax effect of non-GAAP adjustments, the Company reported net income of $13.8 million, or $0.48 per diluted share, in the second quarter of 2020. This is compared with net income of $13.5 million, or $0.47 per diluted share, in the first quarter of 2020, and compared with net income of $9.0 million, or $0.32 per diluted share, in the second quarter of 2019.
Conference Call Information
Nova will host a conference call today, August 4, 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: 8576081
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 August 4, 2020 at 12 p.m. Eastern Time to August 11, 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: 8576081
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 enables 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, expense related to a transaction made by a financial institution without Company authorization, 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.
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
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 June 30,
December 31,
2020 2019
Current assets
Cash and cash equivalents 25,885 31,748
Short-term interest-bearing bank deposits 187,535 154,533
Trade accounts receivable 44,457 51,603
Inventories 56,584 48,362
Other current assets 12,383 17,122
Total current assets 326,844 303,368
Non-current assets
Interest-bearing bank deposits 2,804 2,813
Restricted interest-bearing bank deposits 2,000 2,000
Deferred tax assets 5,100 4,554
Severance pay funds 1,181 1,210
Right of-use assets 27,555 28,256
Property and equipment, net 31,489 30,566
Intangible assets, net 6,310 7,562
Goodwill 20,114 20,114
Total non-current assets 96,553 97,075
Total assets 423,397 400,443
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable 21,716 20,706
Deferred revenues 1,165 2,256
Operating lease current liabilities 1,935 2,236
Other current liabilities 23,161 21,751
Total current liabilities 47,977 46,949
Non-current liabilities
Accrued severance pay 2,119 2,120
Operating lease long-term liabilities 30,891 31,077
Other long-term liability 6,448 5,758
Total non-current liabilities 39,458 38,955
Shareholders' equity 335,962 314,539
Total liabilities and shareholders' equity 423,397 400,443
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 Six months ended
June 30, June 30, June 30, June 30,
2020 2019 2020 2019
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Revenues:
Products 47,097 37,401 92,822 81,462
Services 15,489 13,719 30,786 26,315
Total revenues 62,586 51,120 123,608 107,777
Cost of revenues:
Products 17,150 14,527 35,190 32,104
Services 8,835 8,483 17,475 15,979
Total cost of revenues 25,985 23,010 52,665 48,083
Gross profit 36,601 28,110 70,943 59,694
Operating expenses:
Research and development expenses, net 12,622 11,654 24,305 24,238
Sales and marketing expenses 7,263 6,641 13,826 13,787
General and administrative expenses 5,775 2,384 8,364 4,906
Amortization of acquired intangible assets 626 656 1,252 1,312
Total operating expenses 26,286 21,335 47,747 44,243
Operating income 10,315 6,775 23,196 15,451
Financing income, net 387 855 1,415 1,365
Income before tax on income 10,702 7,630 24,611 16,816
Income tax expenses 2,030 1,162 4,257 2,592
Net income for the period 8,672 6,468 20,354 14,224
Earnings per share:
Basic 0.31 0.23 0.73 0.51
Diluted 0.30 0.23 0.70 0.50
Shares used for calculation of earnings per share:
Basic 28,039 27,869 28,037 27,898
Diluted 28,888 28,564 28,890 28,234
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 Six months ended
June 30, June 30, June 30, June 30,
2020 2019 2020 2019
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Cash flows from operating activities:
Net income for the period 8,672 6,468 20,354 14,224
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 2,039 2,770 4,783 5,470
Share-based compensation 1,454 1,086 2,772 2,298
Change in deferred tax assets, net (345) (147) (546) (344)
Change in accrued severance pay, net 42 (6) 28 27
Change in trade accounts receivable 10,586 (1,157) 7,146 5,453
Change in inventories (7,022) (3,323) (8,470) (7,855)
Change in other current and long-term assets 1,046 1,978 4,739 2,580
Change in trade accounts payable 2,920 (5,430) 665 (2,126)
Change in other current and long-term liabilities 1,140 (3,457) 2,206 (4,579)
Change in short term deferred revenues (1,437) 196 (1,091) 1,330
Net cash provided by (used in) operating activities 19,095 (1,022) 32,586 16,478
Cash flow from investment activities:
Increase in short-term and long-term interest-bearing bank deposits (25,458) 8,447 (32,993) 6,075
Purchase of property and equipment (890) (5,716) (3,160) (7,693)
Net cash provided by (used in) investment activities (26,348) 2,731 (36,153) (1,618)
Cash flows from financing activities:
Purchases of treasury shares (2,535) (7,159) (2,549) (7,159)
Shares issued upon exercise of options 142 166 253 272
Net cash used in financing activities (2,393) (6,993) (2,296) (6,887)
Increase (decrease) in cash and cash equivalents (9,646) (5,284) (5,863) 7,973
Cash and cash equivalents - beginning of period 35,531 38,134 31,748 24,877
Cash and cash equivalents - end of period 25,885 32,850 25,885 32,850
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
June 30, March
31, June 30,
2020 2020 2019
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GAAP gross profit 36,601 34,342 28,110
Stock-based compensation expenses * 279 256 222
Facilities transition costs - 271
Non-GAAP gross profit 36,880 34,598 28,603
GAAP gross margin as a percentage of revenues 58% 56% 55%
Non-GAAP gross margin as a percentage of revenues 59% 57% 56%
GAAP operating income 10,315 12,881 6,775
Stock-based compensation expenses * 1,454 1,318 1,086
Amortization of acquired intangible assets 626 626 656
One-time expense related to a transaction made by a 3,000 -
financial institution without Company authorization
Facilities transition costs - 827
Non-GAAP operating income 15,395 14,825 9,344
GAAP operating margin as a percentage of revenues 16% 21% 13%
Non-GAAP operating margin as a percentage of revenues 25% 24% 18%
GAAP net income 8,672 11,682 6,468
Stock-based compensation expenses * 1,454 1,318 1,086
Amortization of acquired intangible assets 626 626 656
One-time expense related to a transaction made by a 3,000 -
financial institution without Company authorization
Facilities transition costs - 827
Revaluation of long-term liabilities 594 (66) 295
Tax effect of non-GAAP adjustments (572) (79) (325)
Non-GAAP net income 13,774 13,481 9,007
GAAP basic earnings per share 0.31 0.42 0.23
Non-GAAP basic earnings per share 0.49 0.48 0.32
GAAP diluted earnings per share 0.30 0.41 0.23
Non-GAAP diluted earnings per share 0.48 0.47 0.32
Shares used for calculation of earnings per share:
Basic 28,039 27,902 27,869
Diluted 28,888 28,760 28,564
* Stock-based compensation expenses for the three months ended June 30, 2020 included in - Cost of revenues products - 169; Cost of revenues services - 110; Research and development expenses, net - 604; Sales and marketing expenses - 327; General and administrative expenses - 244
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SOURCE Nova
