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Nova Reports Results for Third Quarter of 2022
[November 03, 2022]

Nova Reports Results for Third Quarter of 2022


REHOVOT, Israel, Nov. 3, 2022 /PRNewswire/ -- Nova (Nasdaq: NVMI) today announced financial results for the third quarter, the three-month period ended September 30, 2022.

Nova Logo
Third Quarter 2022 Highlights:
  • Record quarterly revenue of $143.9 million
  • GAAP net income of $35.1 million, or $1.10 per diluted share
  • Non-GAAP net income of $39.7 million, or $1.24 per diluted share
  • Record sales of Optical CD Integrated Metrology platforms
  • Diverse revenue mix, propelled by a growing customer base across industry sectors
GAAP Results ($K)





Q3 2022

Q2 2022

Q3 2021

Revenues

$143,906

$141,628

$112,713

Net Income

$35,075

$34,878

$30,335

Earnings per Diluted Share

$1.10

$1.09

$1.02


Non-GAAP Results ($K)

Q3 2022

Q2 2022

Q3 2021

Net Income

$  39,698

$  39,546

$34,546

Earnings per Diluted Share

$1.24

$1.24

$1.16

A reconciliation between GAAP operating results and non-GAAP operating results is provided following the financial statements included in this release. See also "Use of Non-GAAP Adjusted Financial Measures" section.

Management Comments

"Nova reported a strong third quarter, demonstrating the agility of our business model and the expanding diversification of our revenue mix across geographies and industry segments," commented Eitan Oppenhaim, President and Chief Executive Officer. "Our solid performance in this dynamic environment was driven by the unique value we are consistently adding to our customers and our unwavering execution of Nova's long-term strategic targets. Along with our compelling guidance for the fourth quarter, Nova stands to conclude 2022 as a record year, establishing the foundation for Nova's recently introduced $1 billion long-term strategic plan."   

2022 Fourth Quarter Financial Outlook

Management provided an outlook for the fourth quarter, the period ending December 31, 2022. Based on current estimates, management expects:

  • $142 million to $152 million in revenue
  • $0.99 to $1.16 in diluted GAAP EPS
  • $1.15 to $1.32 in diluted non-GAAP EPS
2022 Third Quarter Results

Total revenues for the third quarter of 2022 were $143.9 million, an increase of 2% compared with the second quarter of 2022 and an increase of 28% compared with the third quarter of 2021.

Gross margin in the third quarter of 2022 was 57%, compared with 57% in the second quarter of 2022 and compared with 58% in the third quarter of 2021.

Operating expenses in the third quarter of 2022 were $43.2 million, compared with $43.4 million in the second quarter of 2022 and $29.7 million in the third quarter of 2021.

On a GAAP basis, the Company reported net income of $35.1 million, or $1.10 per diluted share, in the third quarter of 2022. This is compared with net income of $34.9 million, or $1.09 per diluted share, in the second quarter of 2022, and net income of $30.3 million, or $1.02 per diluted share, in the third quarter of 2021.

On a non-GAAP basis, the Company reported net income of $39.7 million, or $1.24 per diluted share, in the third quarter of 2022. This is compared with net income of $39.5 million, or $1.24 per diluted share, in the second quarter of 2022, and net income of $34.5 million, or $1.16 per diluted share, in the third quarter of 2021.

Conference Call Information

Nova will host a conference call today, November 3, 2022, at 8:30 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: 1-844-826-3035
ISRAEL TOLL-FREE Dial-in Number: 1-809-213284
INTERNATIONAL Dial-in Number: 1-412-317-5159

At:

8:30 a.m. Eastern Time
5:30 a.m. Pacific Time
2:30 p.m. Israel Time

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 3, 2022, at 11:30 a.m. Eastern Time to November 10, 2022, 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: 10171951

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 material, optical and chemical metrology solutions for advanced process control 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 developing and producing the most advanced semiconductor devices. Nova's unique capability to deliver innovative 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 worldwide. Additional information may be found on Nova's website link - https://www.novami.com/.

Nova is traded on the Nasdaq and TASE, Nasdaq ticker symbol NVMI.

Use of Non-GAAP Adjusted Financial Measures

This press release provides financial measures that exclude amortization of acquired intangible assets, acquisition-related expenses, inventory step-up and contingent consideration revaluation, stock-based compensation expenses, revaluation of operating lease liabilities, amortization of debt discount and issuance costs and tax effect of non-GAAP adjustment, 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.

Forward-Looking Statements

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 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 differ materially 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: catastrophic events such as the outbreak of COVID-19; increased information technology security threats and sophisticated computer crime; foreign political and economic risks; changes in U.S. trade policies; inability to protect our intellectual property; open source technology exposure; failure to compete effectively or to respond to the rapid technological changes; consolidation in our industry; difficulty in predicting the length and strength of any downturn or expansion period of the market we target; factors that adversely affect the pricing and demand for our product lines; dependency on a small number of large customers; dependency on a single manufacturing facility per product line; dependency on a limited number of suppliers; difficulty in integrating current or future acquisitions; lengthy sales cycle and customer delays in orders; political, economic, and military instability in Israel; risks related to our convertible notes; currency fluctuations; and quarterly fluctuations in our operating results. 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, 2021 filed with the Securities and Exchange Commission on March 1, 2022. These factors are updated from time to time through the filing of reports and registration statements with the Securities and Exchange Commission. Nova Ltd. does not assume any obligation to update the forward-looking information contained in this press release.

(Tables to Follow)

 

NOVA LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

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



As of

ASSETS

September 30,

2022

December 31,

2021

Current assets



Cash and cash equivalents

118,814

126,698

Short-term interest-bearing bank deposits

65,436

221,897

Marketable securities

150,980

61,568

Trade accounts receivable, net

98,909

68,446

Inventories

115,608

78,665

Other current assets

19,388

9,242

Total current assets

569,135

566,516

Non-current assets



Marketable securities

161,824

137,415

Interest-bearing bank deposits

3,223

3,672

Restricted interest-bearing bank deposits

1,600

1,600

Deferred tax assets

13,160

6,161

Severance pay funds

1,192

1,327

Operating lease right-of-use assets

44,924

30,627

Property and equipment, net

48,734

34,460

Intangible assets, net

41,719

2,601

Goodwill

47,421

20,114

Other long-term assets

879

661

Total non-current assets

364,676

238,638

Total assets

933,811

805,154

 LIABILITIES AND SHAREHOLDERS' EQUITY



Current liabilities



Convertible senior notes, net

-

183,037

Trade accounts payable

43,376

36,218

Deferred revenues

20,019

15,338

Operating lease current liabilities

6,020

4,452

Other current liabilities

49,247

48,885

Total current liabilities

118,662

287,930

Non-current liabilities



Convertible senior notes, net

196,072

-

Accrued severance pay

3,570

3,686

Operating lease long-term liabilities

42,728

33,450

Long-term deferred tax liability

11,585

-

Other long-term liabilities

8,146

6,334

Total non-current liabilities

262,101

43,470

Shareholders' equity

553,048

473,754

Total liabilities and shareholders' equity 

933,811

805,154

 

 

NOVA LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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



Three months ended September 30,

Nine months ended September 30,


2022

2021

2022

2021

Revenues:





Products

116,634

92,552

340,666

237,128

Services

27,272

20,161

78,825

57,464

Total revenues

143,906

112,713

419,491

294,592

Total cost of revenues

61,776

47,475

180,823

125,480

Gross profit

82,130

65,238

238,668

169,112

Operating expenses:





Research and development, net

23,008

15,858

64,252

45,717

Sales and marketing

13,476

9,145

38,064

28,117

General and administrative

5,264

4,135

18,775

11,062

Amortization of intangible assets

1,444

574

4,570

1,723

Total operating expenses

43,192

29,712

125,661

86,619

Operating income

38,938

35,526

113,007

82,493

Financing income (expense), net

1,535

(889)

6,321

(1,615)

Income before taxes on income

40,473

34,637

119,328

80,878

Income tax expenses

5,398

4,302

15,213

10,003

Net income for the period

35,075

30,335

104,115

70,875






Earnings per share:





Basic

1.22

1.07

3.63

2.50

Diluted

1.10

1.02

3.26

2.39






Shares used in calculation of earnings per share
 (in thousands):





Basic

28,685

28,429

28,686

28,316

Diluted

31,892

29,858

31,956

29,660

 

 

NOVA LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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



Three months ended
September 30,

Nine months ended
September 30,


2022

2021

2022

2021

Cash flows from operating activities:





Net income

35,075

30,335

104,115

70,875

Adjustments to reconcile net income to net cash provided by operating activities:





     Depreciation of property and equipment

2,094

1,619

6,130

4,794

     Amortization of intangible assets

1,444

574

4,570

1,723

     Amortization of premium and accretion of discount on marketable securities, net

376

570

1,920

853

     Amortization of debt discount and issuance costs

322

1,069

960

3,154

     Share-based compensation

4,334

2,642

12,266

6,992

     Net effect of exchange rate fluctuation

1,140

(63)

4,111

(51)

Changes in assets and liabilities:





     Trade accounts receivables, net

(5,419)

(6,423)

(22,213)

(1,316)

     Inventories

(14,608)

(2,245)

(27,143)

(12,493)

     Other current and long-term assets

(2,078)

(276)

(10,149)

(884)

     Deferred tax assets, net

(2,202)

(534)

(7,142)

(2,248)

     Operating lease right-of-use assets

997

374

3,032

1,191

     Trade accounts payables

6,281

2,527

5,221

4,898

     Deferred revenues

229

18,319

4,751

27,193

     Operating lease liabilities

(1,328)

117

(6,466)

(1,068)

     Other current and long-term liabilities

5,346

4,027

(4,039)

8,332

     Accrued severance pay, net

(52)

(1)

19

54

Net cash provided by operating activities

31,951

52,631

69,943

111,999

Cash flows from investment activities:





Acquisition of subsidiary, net of acquired cash

-

-

(78,469)

-

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

39,957

(15,335)

156,461

(68,679)

Investment in marketable securities

(130,151)

(107,261)

(181,678)

(208,727)

Proceeds from maturities of marketable securities

23,737

6,521

57,935

7,721

Purchase of property and equipment

(4,928)

(760)

(12,885)

(2,566)

Net cash provided by (used in) investing activities

(71,385)

(116,835)

(58,636)

(272,251)

Cash flows from investment activities:





Settlement of a contingent consideration liability

(8,480)

-

(8,480)

-

Purchases of treasury shares

(2,146)

-

(6,416)

-

Proceeds from exercise of options

-

11

82

11

Net cash used in financing activities

(10,626)

11

(14,814)

11

Effect of exchange rate fluctuations on cash and cash equivalents

(1,423)

30

(4,377)

64

Changes in cash and cash equivalents

(51,483)

(64,163)

(7,884)

(160,177)

Cash and cash equivalents - beginning of period

170,297

136,290

126,698

232,304

Cash and cash equivalents - end of period

118,814

72,127

118,814

72,127

 

 

NOVA 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,
2022

June 30,
2022

September 30,
2021

GAAP gross profit

82,130

80,388

65,238

Stock-based compensation*

1,114

1,021

557

Acquisition-related inventory step-up

-

366

-

Non-GAAP gross profit

83,244

81,775

65,795

GAAP gross margin as a percentage of revenues

57 %

57 %

58 %

Non-GAAP gross margin as a percentage of revenues

58 %

58 %

58 %





GAAP operating income

38,938

36,963

35,526

Stock-based compensation*

4,334

4,072

2,642

Acquisition-related inventory step-up

-

366

-

Acquisition-related expenses and contingent

     consideration revaluation

-

2,392

-

Amortization of acquired intangible assets

1,444

1,513

574

Non-GAAP operating income

44,716

45,306

38,742

GAAP operating margin as a percentage of revenues

27 %

26 %

32 %

Non-GAAP operating margin as a percentage of revenues

31 %

32 %

34 %





GAAP net income

35,075

34,878

30,335

Stock-based compensation*

4,334

4,072

2,642

Acquisition-related inventory step-up

-

366

-

Acquisition-related expenses and contingent

     consideration revaluation

-

2,392

-

Amortization of acquired intangible assets

1,444

1,513

574

Amortization of debt discount and issuance costs

322

318

1,069

Revaluation of operating lease liabilities

(572)

(3,350)

217

Tax effect of non-GAAP adjustments

(905)

(643)

(291)

Non-GAAP net income

39,698

39,546

34,546





GAAP basic earnings per share

1.22

1.22

1.07

Non-GAAP basic earnings per share

1.38

1.38

1.22





GAAP diluted earnings per share

1.10

1.09

1.02

Non-GAAP diluted earnings per share

1.24

1.24

1.16





Shares used for calculation of earnings per share
(in thousands):




Basic

28,685

28,688

28,429

Diluted

31,892

31,902

29,858


* Stock-based compensation for the three months ended Sep 30, 2022 included in – Cost of revenues - 1,114;
Research and development, net – 1,786; Sales and marketing – 827; General and administrative  – 607.

 

 

NOVA LTD.

SUPPLEMENTAL INFORMATION - RECONCILIATION OF FOURTH QUARTER 2022

GAAP TO NON-GAAP GUIDANCE

(Unaudited)



Low

High

Estimated GAAP net income per diluted share

0.99

1.16

Estimated non-GAAP items:



Stock-based compensation

0.13

0.13

Amortization of acquired intangible assets

0.05

0.05

Amortization of issuance costs

0.01

0.01

Tax effect of non-GAAP adjustments

(0.03)

(0.03)

Estimated non-GAAP net income per diluted share

1.15

1.32

Company Contact:

Dror David, Chief Financial Officer
Tel: +972-73-229-5760
E-mail - [email protected]
Nova website link - https://www.novami.com/

Investor Relations Contact:

Miri Segal MS-IR LLC
Tel: +917-607-8654
E-mail - [email protected]

 

 

Cision View original content:https://www.prnewswire.com/news-releases/nova-reports-results-for-third-quarter-of-2022-301667451.html

SOURCE Nova


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