Nova Reports Third Quarter 2020 Results
REHOVOT, Israel, Nov. 12, 2020 /PRNewswire/ -- Nova (Nasdaq: NVMI) today announced financial results for the third quarter 2020, the period ended September 30, 2020.
Business Highlights:
-- Record quarterly revenue of $69.5 million, up 32% year-over-year
-- GAAP net income of $13.9 million, or $0.48 per diluted share, up 60%
year-over-year on a per-share basis
-- Non-GAAP net income of $16.5 million, or $0.57 per diluted share, up 43%
year-over-year on a per-share basis
-- Record quarterly optical standalone revenues, driven by growing demand
for Nova's unique dimensional metrology solutions
-- In October, completed a private offering of $200 million of 0%
convertible senior notes due 2025
GAAP Results ($K)
---
Q3 2020 Q2 2020 Q3 2019
---
Revenues $69,485 $62,586 $52,507
---
Net Income $13,896 $8,672 $8,562
---
Earnings per Diluted Share $0.48 $0.30 $0.30
---
NON-GAAP Results ($K)
---
Q3 2020 Q2 2020 Q3 2019
---
Net Income $16,511 $13,774 $11,507
---
Earnings per Diluted Share $0.57 $0.48 $0.40
---
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
"Nova's outstanding financial results for the quarter exceeded our previous expectations and guidance. These results demonstrate the resilience of our operational model and the strategic value we bring to our customers while they continue developing their next generation technology nodes," commented Eitan Oppenhaim, President and Chief Executive Officer. "Following our strong operational execution in 2020, we remain confident in our strategy and the value we create, which provide us a solid base to deliver our long-term growth objectives."
2020 Fourth Quarter Financial Outlook
Management provided an outlook for the fourth quarter, the period ending December 31, 2020. Based on current estimates, management expects:
-- $66 million to $73 million in revenue
-- $0.32 to $0.43 in diluted GAAP EPS
-- $0.45 to $0.56 in diluted non-GAAP EPS
2020 Third Quarter Results
Total revenues for the third quarter of 2020 were $69.5 million, an increase of 11.0% compared with the second quarter of 2020 and an increase of 32.3% compared with the third quarter of 2019.
Gross margin for the third quarter of 2020 was 57.1%, compared with a gross margin of 58.5% in the second quarter of 2020, and compared with a gross margin of 52.4% in the third quarter of 2019.
Operating expenses in the third quarter of 2020 were $24.1 million, compared with $26.3 million in the second quarter of 2020 and compared with $21.0 million in the third quarter of 2019.
On a GAAP basis, the Company reported net income of $13.9 million, or $0.48 per diluted share, in the third quarter of 2020. This is compared with net income of $8.7 million, or $0.30 per diluted share, in the second quarter of 2020, and compared with net income of $8.6 million, or $0.30 per diluted share, in the third 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 $16.5 million, or $0.57 per diluted share, in the third quarter of 2020. This is compared with net income of $13.8 million, or $0.48 per diluted share, in the second quarter of 2020, and compared with net income of $11.5 million, or $0.40 per diluted share, in the third quarter of 2019.
Conference Call Information
Nova will host a conference call today, November 12, 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: 1-888-394-8218
ISRAEL TOLL-FREE 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. Israel Time
Please reference conference ID: 1420148
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 November 12, 2020 at 12 p.m. Eastern Time to November 19, 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: 1420148
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, tax effect of non-GAAP adjustments and amortization of debt discount and issuance costs, as applicable, 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 enhance 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 allow 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.
NOVA MEASURING INSTRUMENTS LTD.
---
CONDENSED CONSOLIDATED BALANCE SHEETS
---
(U.S. dollars in thousands) - (Unaudited)
As of
ASSETS September 30, December 31,
2020 2019
Current assets
Cash and cash equivalents 32,713 31,748
Short-term interest-bearing
bank deposits 200,676 154,533
Trade accounts receivable 41,097 51,603
Inventories 62,063 48,362
Other current assets 11,899 17,122
Total current assets 348,448 303,368
Non-current assets
Interest-bearing bank
deposits 2,824 2,813
Restricted interest-bearing
bank deposits 2,000 2,000
Deferred tax assets 5,282 4,554
Severance pay funds 1,197 1,210
Right of-use assets 29,508 28,256
Property and equipment, net 32,491 30,566
Intangible assets, net 5,684 7,562
Goodwill 20,114 20,114
Total non-current assets 99,100 97,075
Total assets 447,548 400,443
Liabilities and shareholders'
Equity
Current liabilities
Trade accounts payable 20,706
22,733
Deferred revenues 3,791 2,256
Operating lease current
liabilities 2,391 2,236
Other current liabilities 26,303 21,751
Total current liabilities 55,218 46,949
Non-current liabilities
Accrued severance pay 2,139 2,120
Operating lease long-term
liabilities 31,875 31,077
Other long-term liability 6,616 5,758
Total non-current
liabilities 40,630 38,955
Shareholders' equity 351,700 314,539
Total liabilities and
shareholders' equity 447,548 400,443
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,
2020 2019 2020 2019
---
Revenues:
Products 54,757 38,723 147,579 120,185
Services 14,728 13,784 45,514 40,099
Total revenues 69,485 52,507 193,093 160,284
Cost of revenues:
Products 20,732 16,342 55,922 48,446
Services 9,096 8,672 26,571 24,651
Total cost of revenues 29,828 25,014 82,493 73,097
Gross profit 39,657 27,493 110,600 87,187
Operating expenses:
Research and development expenses, net 12,957 10,548 37,262 34,786
Sales and marketing expenses 7,406 7,156 21,232 20,943
General and administrative expenses 3,141 2,658 11,505 7,564
Amortization of acquired intangible assets 625 657 1,877 1,969
Total operating expenses 24,129 21,019 71,876 65,262
Operating income 15,528 6,474 38,724 21,925
Financing income, net 846 887 2,261 2,252
Income before tax on income 16,374 7,361 40,985 24,177
Income tax expenses 2,478 (1,201) 6,735 1,391
Net income for the period 13,896 8,562 34,250 22,786
Earnings per share:
Basic 0.49 0.31 1.22 0.82
Diluted 0.48 0.30 1.18 0.80
Shares used for calculation of earnings per share:
Basic 28,168 27,826 28,080 27,935
Diluted 29,020 28,474 28,933 28,599
NOVA MEASURING INSTRUMENTS LTD.
---
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,
2020 2019 2020 2019
---
Cash flows from operating activities:
Net income for the period 13,896 8,562 34,250 22,786
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 2,447 3,842 7,133 9,312
Share-based compensation 1,946 1,364 4,718 3,662
Change in deferred tax assets, net (182) (410) (728) (754)
Change in accrued severance pay, net 4 25 32 52
Change in trade accounts receivable 3,360 1,024 10,506 6,477
Change in inventories (6,582) (1,332) (15,052) (9,187)
Change in other current and long-term assets 484 (7,180) 5,223 (4,600)
Change in trade accounts payable 1,362 1,700 2,027 (426)
Change in other current and long-term liabilities 2,227 3,247 4,530 (1,332)
Change in short term deferred revenues 2,626 (1,599) 1,535 (269)
Net cash provided by (used in) operating activities 21,588 9,243 54,174 25,721
Cash flow from investment activities:
Change in short-term and long-term interest-bearing bank (13,161) (6,040) (46,154) 35
deposits
Purchase of property and equipment (1,713) (7,928) (4,873) (15,621)
Net cash provided by (used in) investment activities (14,874) (13,968) (51,027) (15,586)
Cash flows from financing activities:
Purchases of treasury shares - (2,549) (7,159)
Shares issued upon exercise of options 114 95 367 367
Net cash used in financing activities 114 95 (2,182) (6,792)
Increase (decrease) in cash and cash equivalents 6,828 (4,630) 965 3,343
Cash and cash equivalents - beginning of period 25,885 32,850 31,748 24,877
Cash and cash equivalents - end of period 32,713 28,220 32,713 28,220
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,
2020 2020 2019
---
GAAP gross profit 39,657 36,601 27,493
Stock-based compensation expenses * 414 279 277
Facilities transition costs - 220
Non-GAAP gross profit 40,071 36,880 27,990
GAAP gross margin as a percentage of revenues 57% 58% 52%
Non-GAAP gross margin as a percentage of revenues 58% 59% 53%
GAAP operating income 15,528 10,315 6,474
Stock-based compensation expenses * 1,946 1,454 1,364
Amortization of acquired intangible assets 625 626 657
One-time expense related to a transaction made by a - 3,000
financial institution without Company authorization
Facilities transition costs - 888
Non-GAAP operating income 18,099 15,395 9,383
GAAP operating margin as a percentage of revenues 22% 16% 12%
Non-GAAP operating margin as a percentage of revenues 26% 25% 18%
GAAP net income 13,896 8,672 8,562
Stock-based compensation expenses * 1,946 1,454 1,364
Amortization of acquired intangible assets 625 626 657
One-time expense related to a transaction made by a - 3,000
financial institution without Company authorization
Facilities transition costs - 888
Revaluation of long-term liabilities 161 594 362
Tax effect of non-GAAP adjustments (117) (572) (326)
Non-GAAP net income 16,511 13,774 11,507
GAAP basic earnings per share 0.49 0.31 0.31
Non-GAAP basic earnings per share 0.59 0.49 0.41
GAAP diluted earnings per share 0.48 0.30 0.30
Non-GAAP diluted earnings per share 0.57 0.48 0.40
Shares used for calculation of earnings per share:
Basic 28,168 28,039 27,826
Diluted 29,020 28,888 28,474
* Stock-based compensation expenses for the three months ended September 30, 2020 included in - Cost of revenues products - 259; Cost of revenues services - 155; Research and development expenses, net - 713; Sales and marketing expenses - 409; General and administrative expenses - 410
NOVA MEASURING INSTRUMENTS LTD.
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SUPPLEMENTAL INFORMATION -RECONCILIATION OF FOURTH QUARTER 2020
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GAAP TO NON-GAAP GUIDANCE
---
(Unaudited)
Low High
---
Estimated GAAP net income
per diluted share 0.32 0.43
Estimated non-GAAP items:
Stock-based compensation
expenses 0.09 0.09
Amortization of acquired
intangible assets 0.02 0.02
Amortization of debt
discount and issuance
costs 0.03 0.03
Tax effect of non-GAAP
adjustments (0.01) (0.01)
Estimated non-GAAP net
income per diluted share 0.45 0.56
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
