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Nova Reports First Quarter 2018 Results
[May 02, 2018]

Nova Reports First Quarter 2018 Results


REHOVOT, Israel, May 2, 2018 /PRNewswire/ -- Nova (Nasdaq: NVMI), a leading innovator and a key provider of metrology solutions for advanced process control used in semiconductor manufacturing, today reported financial results for the first quarter 2018, the period ended March 31, 2018.

First Quarter 2018 Highlights:

  • Record quarterly revenue of $62.6 million, up 15% year-over-year, exceeding guidance of $54 to $60 million
  • GAAP net income of $14.1 million, or $0.49 per diluted share, exceeding guidance of $0.29 to $0.40 per share
  • Non-GAAP net income of $15.4 million, or $0.54 per diluted share, exceeding guidance of $0.34 to $0.45 per share
  • Growing position in China yielded 40% of overall product revenue
  • Expansion in the Memory sector generated 50% of overall product revenue

 





GAAP Results ($K)


Q1 2018

Q4 2017

Q1 2017

Revenues

$62,603

$57,378

$54,430

Net Income

$14,080

$8,241

$13,403

Earnings per Diluted Share

$0.49

$0.29

$0.48

NON-GAAP Results ($K)


Q1 2018

Q4 2017

Q1 2017

Net Income

$15,430

$13,021

$14,115

Earnings per Diluted Share

$0.54

$0.45

$0.50


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

"Nova continued to perform well this quarter, setting new revenue and profit records that demonstrate our competitive strength in the market and the growing adoption of our diversified portfolio," commented Eitan Oppenhaim, President and Chief Executive Officer of Nova. "Growth in the first quarter was driven by two main notable factors: the expansion of our Memory business and our continued growth in China. This strong start supports our outlook for another growth year in which we continue to execute our strategic plan to expand our portfolio and enhance our value proposition. These efforts contribute directly to our customers' success in transitioning to the most advanced technology nodes," concluded Mr. Oppenhaim.

2018 Second Quarter Financial Outlook

Management provided an outlook for the second quarter, the period ending June 30, 2018. Based on current estimates, management expects:

  • $57 million to $63 million in revenue
  • $0.30 to $0.40 in diluted GAAP EPS
  • $0.35 to $0.45 in diluted non-GAAP EPS

2018 First Quarter Results

Total revenues for the first quarter of 2018 were $62.6 million, an increase of 9% compared to the fourth quarter of 2017, and an increase of 15% relative to the first quarter of 2017.

Gross margin for the first quarter of 2018 was 58%, compared with gross margin of 56% in the fourth quarter of 2017 and compared with gross margin of 60% in the first quarter of 2017.

Operating expenses in the first quarter of 2018 were $20.3 million. This is compared with $19.7 million in the fourth quarter of 2017 and compared with $17.7 million in the first quarter of 2017.

On a GAAP basis, the company reported net income of $14.1 million, or $0.49 per diluted share, in the first quarter of 2018. This is compared with net income of $8.2 million, or $0.29 per diluted share, in the fourth quarter of 2017, and compared with net income of $13.4 million, or $0.48 per diluted share, in the first 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 $15.4 million, or $0.54 per diluted share, in the first quarter of 2018. This is compared with net income of $13.0 million, or $0.45 per diluted share, in the fourth quarter of 2017, and compared with net income of $14.1 million, or $0.50 per diluted share, in the first quarter of 2017.

Conference Call Information

Nova will host a conference call today, May 2, 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
4 p.m. Israel Time

The conference call will also be webcast live from a link on Nova's website at http://ir.novameasuring.com. For those unable to participate in the conference call, there will be a replay available from a link on Nova's website at http://ir.novameasuring.com.

Replay Dial-In Numbers:
U.S. Dial-in Number:   1-844-512-2921
International Dial-in Number:   1-412-317-6671
From:  05/02/18 at 12:00 pm Eastern Time
To:    05/09/18 at 11:59 pm Eastern Time
Replay Pin Number:  1121259

About Nova: Nova Measuring Instruments delivers continuous innovation by providing advanced metrology solutions for the semiconductor manufacturing industry. Deployed with the world's largest integrated-circuit manufacturers, Nova's products deliver 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, supports the development and production of the most advanced devices in today's high-end semiconductor market. Nova's technical innovation and market leadership enable customers to improve process performance, enhance products' 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.novameasuring.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


March 31,


December 31,



2018


2017

Current assets





     Cash and cash equivalents


28,468


27,697

     Short-term interest-bearing bank deposits


132,198


121,390

     Trade accounts receivable


37,425


40,949

     Inventories


39,064


34,921

     Other current assets


5,807


7,313






Total current assets


242,962


232,270






Long-term assets





     Long-term interest-bearing bank deposits


1,100


750

 Deferred tax assets


2,093


1,957

 Severance pay funds


1,512


1,503

 Property and equipment, net


13,612


13,891

 Identifiable intangible assets, net


12,147


12,800

 Goodwill


20,114


20,114






Total long-term assets


50,578


51,015






Total assets


293,540


283,285


LIABILITIES AND SHAREHOLDERS' EQUITY





Current liabilities





     Trade accounts payable


18,050


15,754

 Deferred revenues


5,965


10,334

 Other current liabilities


23,191


26,038






Total current liabilities


47,206


52,126






Long-term liabilities





Liability for employee severance pay


2,558


2,590

Other long-term liabilities


2,115


1,833






Total long-term liabilities


4,673


4,423






Shareholders' equity


241,661


226,736






Total liabilities and shareholders' equity


293,540


283,285

 

 

NOVA MEASURING INSTRUMENTS LTD.


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


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





Three months ended



March 31,

2018


March 31,

2017









Revenues:






   Products

50,185


43,516



   Services

12,418


10,914



Total revenues

62,603


54,430









Cost of revenues:






   Products

17,969


15,120



   Services

8,277


6,450



Total cost of revenues

26,246


21,570









Gross profit

36,357


32,860









Operating expenses:






    Research and development expenses, net

11,226


9,275



    Sales and marketing expenses

6,231


6,088



    General and administrative expenses

2,230


1,657



    Amortization of acquired intangible assets

653


640



Total operating expenses

20,340


17,660









Operating income

16,017


15,200









   Financing income, net

448


415









Income before tax on income

16,465


15,615









   Income tax expenses

2,385


2,212









Net income for the period

14,080


13,403









Earnings per share:






   Basic

0.50


0.49



   Diluted

0.49


0.48









Shares used for calculation of earnings per share:












   Basic

27,915


27,467



   Diluted

28,739


28,148



 

 

NOVA MEASURING INSTRUMENTS LTD.


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


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





Three months ended



March 31,


March 31,



2018


2017


Cash flows from operating activities:










Net income for the period

14,080


13,403







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










Depreciation

915


955


Amortization of acquired intangible assets

653


640


Amortization of deferred stock-based compensation

834


663


Increase (decrease) in liability for employee termination benefits, net

(41)


32


Deferred tax assets, net

(136)


(591)


Decrease in trade accounts receivable

3,567


4,387


Increase in inventories

(4,475)


(1,575)


Decrease in other current and long-term assets

1,506


421


Increase in trade accounts payable

2,353


90


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

(2,684)


1,879


Increase (decrease) in short and long term deferred revenues

(4,369)


2,394







Net cash provided by operating activities

12,203


22,698







Cash flow from investment activities:





Increase in short-term interest-bearing bank deposits, including long-term

(11,158)


(20,078)


Additions to property and equipment

(361)


(420)







Net cash used in investment activities

(11,519)


(20,498)







Cash flows from financing activities:





Shares issued under employee stock-based plans

87


1,817







Net cash provided by financing activities

87


1,817







Increase in cash and cash equivalents

771


4,017


Cash and cash equivalents – beginning of period

27,697


20,406


Cash and cash equivalents – end of period

28,468


24,423


 

 

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,

2018


December 31,

2017


March 31,

2017

GAAP cost of revenues

26,246


25,324


21,570

Stock-based compensation in cost of products

(92)


(107)


(76)

Stock-based compensation in cost of services

(79)


(89)


(66)

Non-GAAP cost of revenues

26,075


25,128


21,428







GAAP gross profit

36,357


32,054


32,860

Gross profit adjustments

171


196


142

Non-GAAP gross profit

36,528


32,250


33,002

GAAP gross margin as a percentage of revenues

58%


56%


60%

Non-GAAP gross margin as a percentage of revenues

58%


56%


61%







GAAP operating expenses

20,340


19,723


17,660

Stock-based compensation in research and development

(340)


(346)


(262)

Stock-based compensation in sales and marketing

(219)


(216)


(165)

Stock-based compensation in general and administrative

(104)


(141)


(94)

Amortization of acquired intangible assets

(653)


(640)


(640)

Non-GAAP operating expenses

19,024


18,380


16,499

Non-GAAP operating income

17,504


13,870


16,503

GAAP operating margin as a percentage of revenues

26%


21%


28%

Non-GAAP operating margin as a percentage of revenues

28%


24%


30%







GAAP tax on income

2,385


4,800


2,212

  Certain discrete tax items

137


(3,241)


591

Non-GAAP tax on income

2,522


1,559


2,803







GAAP net income

14,080


8,241


13,403

Amortization of acquired intangible assets

653


640


640

Stock-based compensation expenses

834


899


663

Certain discrete tax items

(137)


3,241


(591)

Non-GAAP net income

15,430


13,021


14,115







GAAP basic earnings per share

0.50


0.30


0.49

Non-GAAP basic earnings per share

0.55


0.47


0.51







GAAP diluted earnings per share

0.49


0.29


0.48

Non-GAAP diluted earnings per share

0.54


0.45


0.50







Shares used for calculation of earnings per share:






Basic

27,915


27,873


27,467

Diluted

28,739


28,786


28,148








 

 

Company Contact:

Dror David, Chief Financial Officer

Nova Measuring Instruments Ltd.

Tel: +972-73-229-5760

E-mail: info@novameasuring.com

www.novameasuring.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-first-quarter-2018-results-300640888.html

SOURCE Nova


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