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Nova Reports Record Revenue for 2018 Third Quarter
[November 01, 2018]

Nova Reports Record Revenue for 2018 Third Quarter


REHOVOT, Israel, Nov. 1, 2018 /PRNewswire/ -- Nova (Nasdaq: NVMI) today announced financial results for the third quarter 2018, the period ended September 30, 2018.

Third Quarter 2018 Highlights:

  • Record quarterly revenue of $63.6 million, including record revenue from Memory customers, at the high end of company guidance
  • GAAP net income of $13.3 million, or $046 per diluted share, exceeding guidance of $0.32 to $0.44 per share
  • Non-GAAP net income of $15.1 million, or $0.52 per diluted share, exceeding guidance of $0.37 to $0.49 per share
  • Memory customers generated 65% of overall product revenue
  • Five large customers, three Memory and two Foundry, contributed 10% or more each to overall product revenue
  • Initial delivery of Dimensional and Materials metrology solutions to 5NM leading edge node








GAAP Results ($K)






Q3 2018

Q2 2018

Q3 2017





Revenues

$63,571

$61,888

$54,058





Net Income

$13,310

$11,833

$11,502





Earnings per Diluted Share

$0.46

$0.41

$0.40





NON-GAAP Results ($K)






Q3 2018

Q2 2018

Q3 2017





Net Income

$15,080

$13,343

$13,101





Earnings per Diluted Share

$0.52

$0.46

$0.46


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, certain discrete tax items and stock-based compensation expenses.

Management Comments

"We continued to perform well this quarter, setting new record revenue and exceeding our profitability guidance. Our solid results are highlighted by growing revenue from Memory, which reached a new quarterly high with substantial contributions from all leading customers. The quarterly results were also bolstered by initial delivery of our advanced Dimensional and Materials solutions to the most advanced 5NM logic node," commented Eitan Oppenhaim, President and Chief Executive Officer of Nova. "These achievements are further evidence of our steady progress toward another growth year, demonstrating consistent execution of our long-term plans to enhance the product offering, differentiate our solutions and expand our available markets," concluded Mr. Oppenhaim.     

2018 Fourth Quarter Financial Outlook

Management provided an outlook for the fourth quarter, the period ending December 31, 2018. Based on current estimates, management expects:

  • $56 million to $64 million in revenue
  • $0.28 to $0.40 in diluted GAAP EPS
  • $0.35 to $0.46 in diluted non-GAAP EPS

2018 Third Quarter Results

Total revenues for the third quarter of 2018 were $63.6 million, an increase of 3% compared to the second quarter of 2018 and a year-over-year increase of 18% relative to the third quarter of 2017.

Gross margin for the third quarter of 2018 was 59%, compared to 58% gross margin in the second quarter of 2018 and compared to the gross margin of 61% in the third quarter of 2017.

Operating expenses in the third quarter of 2018 were $21.7 million, compared with $22.1 in the second quarter of 2018 and compared with $18.3 million in the third quarter of 2017.

On a GAAP basis, the company reported net income of $13.3 million, or $0.46 per diluted share, in the third quarter of 2018. This is compared with $11.8 million, or $0.41 per diluted share, in the second quarter of 2018, and compared with net income of $11.5 million, or $0.40 per diluted share, in the third quarter of 2017.

On a non-GAAP basis, which excludes amortization of acquired intangible assets, certain discrete tax items and stock-based compensation expenses, the company reported net income of $15.1 million, or $0.52 per diluted share, in the third quarter of 2018. This is compared with net income of $13.3 million, or $0.46 per diluted share, in the second quarter of 2018, and compared with net income of $13.1 million, or $0.46 per diluted share, in the third quarter of 2017.

Total cash reserves on September 30, 2018 were $171.6 million, compared to $149.8 million on December 31, 2017.

Conference Call Information

Nova will host a conference call today, November 1, 2018, 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
3 p.m. Israeli Time

Please reference conference ID 2518323

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 November 1, 2018 at 12 p.m. Eastern Time to November 9, 2018 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:  2518323

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 charges for amortization of acquired intangible assets, certain discrete tax items and stock-based compensation expenses 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, 2017 filed with the Securities and Exchange Commission on February 28, 2018. 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

ASSETS


September 30,

2018


December 31,

2017








Current assets






Cash and cash equivalents


23,767


27,697


Short-term interest-bearing bank deposits


145,800


121,390


Trade accounts receivable


48,071


40,949


Inventories


41,828


34,921


Other current assets


6,244


7,313








Total current assets


265,710


232,270








Long-term assets






Long-term interest-bearing bank deposits


2,000


750


Deferred tax assets


2,702


1,957


Severance pay funds


1,479


1,503


Property and equipment, net


13,193


13,891


Identifiable intangible assets, net


10,840


12,800


Goodwill


20,114


20,114








Total long-term assets


50,328


51,015








Total assets


316,038


283,285








LIABILITIES AND SHAREHOLDERS' EQUITY






Current liabilities






Trade accounts payable


17,620


15,754


Deferred revenues


6,251


10,334


Other current liabilities


17,987


26,038








Total current liabilities


41,858


52,126








Long-term liabilities






Liability for employee severance pay


2,513


2,590


Other long-term liabilities


2,405


1,833








Total long-term liabilities


4,918


4,423








Shareholders' equity


269,262


226,736








Total liabilities and shareholders' equity


316,038


283,285


 

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,

 2018


September 30,

 2017


September 30,

 2018


September 30,

 2017









Revenues:








Products

48,953


41,119


144,922


129,589

Services

14,618


12,939


43,140


35,025

Total revenues

63,571


54,058


188,062


164,614









Cost of revenues:








Products

17,615


13,790


53,586


44,719

Services

8,489


7,389


24,952


20,762

Total cost of revenues

26,104


21,179


78,538


65,481









Gross profit

37,467


32,879


109,524


99,133









Operating expenses:








Research and development expenses, net

11,886


9,826


34,961


28,339

Sales and marketing expenses

7,016


5,863


20,689


17,843

General and administrative expenses

2,162


1,947


6,526


5,542

Amortization of acquired intangible assets

653


641


1,960


1,921

Total operating expenses

21,717


18,277


64,136


53,645









Operating income

15,750


14,602


45,388


45,488









Financing income, net

872


626


1,806


1,566









Income before tax on income

16,622


15,228


47,194


47,054









Income tax expenses

3,312


3,726


7,971


8,836









Net income for the period

13,310


11,502


39,223


38,218









Earnings per share:








Basic

0.47


0.41


1.40


1.38

Diluted

0.46


0.40


1.36


1.34









Shares used for calculation of earnings per share:
















Basic

28,047


27,788


27,980


27,637

Diluted

28,777


28,601


28,761


28,437

 

 

NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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



Three months ended


Nine months ended


September 30,

2018


September 30,

2017


September 30,

2018


September 30,

2017

Cash flows from operating activities:








Net income for the period

13,310


11,502


39,223


38,218

Adjustments to reconcile net income to net cash

provided by operating activities:








Depreciation

1,347


938


3,574


2,831

Amortization of acquired intangible assets

653


641


1,960


1,921

Amortization of deferred stock-based 
compensation

1,254


669


3,081


1,880

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

(18)


18


(53)


91

Deferred tax assets, net

(188)


289


(745)


364

Decrease (increase) in trade accounts receivable

(4,998)


2,798


(7,079)


9,072

Increase in inventories

(768)


(5,292)


(8,004)


(9,908)

Decrease (increase) in other current assets

(2,505)


(2,477)


1,069


(3,432)

Increase (decrease) in trade accounts payable

(925)


(1,586)


1,866


1,122

Increase (decrease) in other current liabilities and 
other long-term liabilities

(496)


736


(7,594)


3,024

Increase (decrease) in short term deferred revenues

(3,233)


1,190


(4,083)


7,354









Net cash provided by operating activities

3,433


9,426


23,215


52,537









Cash flow from investment activities:








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

(6,661)


(30,628)


(25,660)


(53,287)

Additions to property and equipment

(683)


(857)


(1,779)


(2,124)









Net cash used in investment activities

(7,344)


(31,485)


(27,439)


(55,411)









Cash flows from financing activities:








Shares issued under employee stock-based plans

56


347


294


2,488









Net cash provided by financing activities

56


347


294


2,488









Decrease in cash and cash equivalents

(3,855)


(21,712)


(3,930)


(386)

Cash and cash equivalents – beginning of period

27,622


41,732


27,697


20,406

Cash and cash equivalents – end of period

23,767


20,020


23,767


20,020

 

 

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


September 30,

2018


June 30,

2018


September 30,

2017

GAAP cost of revenues

26,104


26,188


21,179

Stock-based compensation in cost of products

(161)


(114)


(113)

Stock-based compensation in cost of services

(122)


(92)


(57)

Non-GAAP cost of revenues

25,821


25,982


21,009







GAAP gross profit

37,467


35,700


32,879

Gross profit adjustments

283


206


170

Non-GAAP gross profit

37,750


35,906


33,049

GAAP gross margin as a percentage of revenues

59%


58%


61%

Non-GAAP gross margin as a percentage of revenues

59%


58%


61%







GAAP operating expenses

21,717


22,079


18,277

Stock-based compensation in research and development

(484)


(386)


(259)

Stock-based compensation in sales and marketing

(285)


(259)


(95)

Stock-based compensation in general and administrative

(202)


(142)


(145)

Amortization of acquired intangible assets

(653)


(654)


(641)

Non-GAAP operating expenses

20,093


20,638


17,137

Non-GAAP operating income

17,657


15,268


15,912

GAAP operating margin as a percentage of revenues

25%


22%


27%

Non-GAAP operating margin as a percentage of revenues

28%


25%


29%







GAAP tax on income

3,312


2,274


3,726

Certain discrete tax items

137


137


(289)

Non-GAAP tax on income

3,449


2,411


3,437







GAAP net income

13,310


11,833


11,502

Amortization of acquired intangible assets

653


654


641

Stock-based compensation expenses

1,254


993


669

Certain discrete tax items

(137)


(137)


289

Non-GAAP net income

15,080


13,343


13,101







GAAP basic earnings per share

0.47


0.42


0.41

Non-GAAP basic earnings per share

0.54


0.48


0.47







GAAP diluted earnings per share

0.46


0.41


0.40

Non-GAAP diluted earnings per share

0.52


0.46


0.46







Shares used for calculation of earnings per share:






Basic

28,047


27,977


27,788

Diluted

28,777


28,766


28,601








 

Company Contact:

Dror David, Chief Financial Officer

Nova Measuring Instruments Ltd.

Tel: +972-73-229-5760

E-mail: info@novameasuring.com  

www.novami.com  

Investor Relations Contact:

Miri Segal

MS-IR LLC

Tel: +917-607-8654

E-mail: msegal@ms-ir.com 

Cision View original content:http://www.prnewswire.com/news-releases/nova-reports-record-revenue-for-2018-third-quarter-300742062.html

SOURCE Nova


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