Nova Reports First Quarter 2019 Results

1 May 2019

REHOVOT, Israel, May 1, 2019 /PRNewswire/ -- Nova (Nasdaq: NVMI) today announced financial results for the first quarter 2019, the period ended March 31, 2019.

First Quarter 2019 Highlights:

  • Quarterly revenue of $56.7 million, meeting guidance of $52 Million to $58 Million.
  • GAAP net income of $7.8 million, or $0.27 per diluted share, exceeding guidance of $0.15 to $0.26 per share
  • Non-GAAP net income of $10.4 million, or $0.37 per diluted share, exceeding guidance of $0.24 to $0.34 per share
  • Five customers contributed 10% or more each to total product revenues, including two Foundry and three Memory providers
  • Additional Memory penetration and extensive deliveries to leading edge Foundry led to a balanced revenue mix

 

GAAP Results ($K)



Q1 2019

Q4 2018

Q1 2018

Revenues

$56,657

$63,072

$62,603

Net Income

$7,756

$15,152

$14,080

Earnings per Diluted Share

$0.27

$0.53

$0.49

NON-GAAP Results ($K)



Q1 2019

Q4 2018

Q1 2018

Net Income

$10,449

$16,914

$15,430

Earnings per Diluted Share

$0.37

$0.59

$0.54

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 continued to demonstrate solid execution through the first quarter of 2019, with revenue within the guidance range and EPS exceeding guidance. The results demonstrate the efficient business model we have built predicated on growing diversification in our revenue mix, customer base and technology offering" commented Eitan Oppenhaim, President and Chief Executive Officer of Nova. "Looking forward, we are confident in our strategy and expect that our balanced market exposure, combined with our newly awaited products, will further strengthen the company's fundamentals and will support our long-term growth plans as market conditions improve beyond the interim industry volatility."

2019 Second Quarter Financial Outlook

Management provided an outlook for the second quarter, the period ending June 30, 2019. Based on current estimates, management expects:

  • $45 million to $53 million in revenue
  • $0.09 to $ 0.26 in diluted GAAP EPS
  • $ 0.17 to $ 0.35 in diluted non-GAAP EPS

2019 First Quarter Results

Total revenues for the first quarter of 2019 were $56.7 million, a decrease of 10% compared to the fourth quarter of 2018 and the first quarter of 2018.

Gross margin for the first quarter of 2019 was 56%, compared to 57% gross margin in the fourth quarter of 2018, and compared to the gross margin of 58% in the first quarter of 2018.

Operating expenses in the first quarter of 2019 were $22.9 million, compared with $20.7 in the fourth quarter of 2018, and compared with $20.3 million in the first quarter of 2018.

On a GAAP basis, the company reported net income of $7.8 million, or $0.27 per diluted share, in the first quarter of 2019. This is compared with $15.2 million, or $0.53 per diluted share, in the fourth quarter of 2018, and compared with net income of $14.1 million, or $0.49 per diluted share, in the first 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 $10.4 million, or $0.37 per diluted share, in the first quarter of 2019. This is compared with net income of $16.9 million, or $0.59 per diluted share, in the fourth quarter of 2018, and compared with net income of $15.4 million, or $0.54 per diluted share, in the first quarter of 2018.

Conference Call Information

Nova will host a conference call today, May 1, 2019, at 9 a.m. Eastern Time, to discuss the financial results and future 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 3002923

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 May 1, 2019 at 12 p.m. Eastern Time to May 8, 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 

Replay Dial-in TOLL/INTERNATIONAL   1-412-317-6671

Replay Pin Number:  3002923

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.

 

 

NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands) - (Unaudited)







As of

ASSETS



March 31,



December 31,

2019

2018

Current assets









Cash and cash equivalents



36,134



22,877

Short-term interest-bearing bank deposits



155,323



152,951

Trade accounts receivable



46,921



53,531

Inventories



45,631



41,786

Other current assets



10,359



10,961











Total current assets



294,368



282,106











Long-term assets









Long-term interest-bearing bank deposits



2,000



2,000

   Deferred tax assets



4,070



3,873

   Severance pay funds



1,436



1,394

   Property and equipment, net



15,025



13,756

   Identifiable intangible assets, net



9,530



10,187

   Operating lease right-of-use assets



27,826



-

   Goodwill



20,114



20,114











Total long-term assets



80,001



51,324











Total assets



374,369



333,430











LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities









Trade accounts payable



22,319



19,015

   Deferred revenues



5,118



3,984

   Operating lease current liabilities



3,236



-

   Other current liabilities



23,239



25,079











Total current liabilities



53,912



48,078











Long-term liabilities









   Liability for employee severance pay



2,329



2,254

   Operating lease long-term liabilities



25,697



-

   Other long-term liabilities



2,422



2,358











Total long-term liabilities



30,448



4,612











Shareholders' equity 



290,009



280,740











Total liabilities and shareholders' equity



374,369



333,430

 

 

NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. dollars in thousands, except per share data) - (Unaudited)









Three months ended











March 31,

2019



March 31,

2018

















Revenues:















Products









44,061



50,185

Services









12,596



12,418

Total revenues









56,657



62,603

















Cost of revenues:















Products









17,577



17,969

Services









7,496



8,277

Total cost of revenues









25,073



26,246

















Gross profit









31,584



36,357

















Operating expenses:















Research and development expenses, net









12,584



11,226

Sales and marketing expenses









7,146



6,231

General and administrative expenses









2,522



2,230

Amortization of acquired intangible assets









656



653

Total operating expenses









22,908



20,340

















Operating income









8,676



16,017

















Financing income, net









510



448

















Income before tax on income









9,186



16,465

















Income tax expenses









1,430



2,385

















Net income for the period









7,756



14,080

















Earnings per share:















Basic









0.28



0.50

Diluted









0.27



0.49

















Shares used for calculation of earnings per

share:































Basic









27,932



27,915

Diluted









28,580



28,739

 

 

NOVA MEASURING INSTRUMENTS LTD.



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



(U.S. dollars in thousands) - (Unaudited)









Three months ended







March 31,

2019



March 31,

2018



Cash flows from operating activities:











Net income for the period



7,756



14,080





Adjustments to reconcile net income to net cash

provided by operating activities:











Depreciation and amortization



2,700



1,568



Amortization of deferred stock-based compensation



1,212



834



Decrease (increase) in liability for employee termination benefits, net



33



(41)



Deferred tax assets, net



(197)



(136)



Decrease in trade accounts receivable



6,610



3,567



Increase in inventories



(4,532)



(4,475)



Decrease in other current assets



602



1,506



Increase in trade accounts payable



3,304



2,353



Decrease in other current liabilities and other long-term liabilities



(1,122)



(2,684)



Increase (decrease) in short term deferred revenues



1,134



(4,369)















Net cash provided by operating activities



17,500



12,203















Cash flow from investment activities:











Increase in short-term and long-term interest-bearing bank deposits



(2,372)



*(10,808)



Additions to property and equipment



(1,977)



(361)















Net cash used in investment activities



(4,349)



*(11,169)















Cash flows from financing activities:











Shares issued under employee stock-based plans



106



87















Net cash provided by financing activities



106



87















Increase in cash and cash equivalents and restricted cash



13,257



*1,121



Cash and cash equivalents and restricted cash – beginning of period



24,877



*28,447



Cash and cash equivalents and restricted cash – end of period



38,134



*29,568















Reconciliation of cash, cash equivalents, and restricted cash to the

consolidated balance sheet











Cash and cash equivalents



36,134



28,468



Restricted cash included in Long-term interest-bearing bank deposits



2,000



1,100



Total cash, cash equivalents, and restricted cash



38,134



29,568















     *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



March 31,

2019



December 31,

2018



March 31,

2018

GAAP gross profit

31,584



35,710



36,357

Stock-based compensation expenses

234



269



171

Facilities transition costs

212



-



-

Non-GAAP gross profit

32,030



35,979



36,528

GAAP gross margin as a percentage of revenues

56%



57%



58%

Non-GAAP gross margin as a percentage of revenues

57%



57%



58%













GAAP operating income

8,676



15,054



16,017

Stock-based compensation expenses

1,212



1,245



834

Amortization of acquired intangible assets

656



654



653

Facilities transition costs

614



-



-

Non-GAAP operating income

11,158



16,953



17,504

GAAP operating margin as a percentage of revenues

15%



24%



26%

Non-GAAP operating margin as a percentage of revenues

20%



27%



28%













GAAP net income

7,756



15,152



14,080

Stock-based compensation expenses

1,212



1,245



834

Amortization of acquired intangible assets

656



654



653

Facilities transition costs

614



-



-

Revaluation of long-term liabilities

484



-



-

Tax effect of non-GAAP adjustments

(273)



(137)



(137)

Non-GAAP net income

10,449



16,914



15,430













GAAP basic earnings per share

0.28



0.54



0.50

Non-GAAP basic earnings per share

0.37



0.60



0.55













GAAP diluted earnings per share

0.27



0.53



0.49

Non-GAAP diluted earnings per share

0.37



0.59



0.54













Shares used for calculation of earnings per share:











Basic

27,932



28,026



27,915

Diluted

28,580



28,655



28,739















 

 

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