Nova Reports Second Quarter 2020 Results
REHOVOT, Israel, Aug. 4, 2020 /PRNewswire/ -- Nova (Nasdaq: NVMI) today announced financial results for the second quarter 2020, the period ended June 30, 2020.
Second Quarter 2020 Highlights:
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.
"Our second quarter results met our expectations and Company guidance, highlighting our ability to successfully navigate through the dynamic global environment caused by the COVID-19 pandemic. The success of our decisive actions to secure our supply chain and production capabilities, while ensuring business continuity, is evident in our achievements this quarter. During the second quarter, we continued to execute well and achieved important milestones in our new product rollout plans with several leading customers," stated Eitan Oppenhaim, President and Chief Executive Officer. "Despite various market uncertainties, we remain focused on the Company's growth as we leverage the current steady demand for our products."
2020 Third Quarter Financial Outlook
Management provided an outlook for the third quarter, the period ending September 30, 2020. Based on current estimates, management expects:
2020 Second Quarter Results
Total revenues for the second quarter of 2020 were $62.6 million, an increase of 2.6% compared with the first quarter of 2020 and an increase of 22.4% compared with the second quarter of 2019.
Gross margin for the second quarter of 2020 was 58.5%, compared with a gross margin of 56.3% in the first quarter of 2020, and compared with a gross margin of 55.0% in the second quarter of 2019.
Operating expenses in the second quarter of 2020 were $26.3 million, compared with $21.5 million in the first quarter of 2020 and compared with $21.3 million in the second quarter of 2019.
On a GAAP basis, the Company reported net income of $8.7 million, or $0.30 per diluted share, in the second quarter of 2020. This is compared with net income of $11.7 million, or $0.41 per diluted share, in the first quarter of 2020, and compared with net income of $6.5 million, or $0.23 per diluted share, in the second 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 $13.8 million, or $0.48 per diluted share, in the second quarter of 2020. This is compared with net income of $13.5 million, or $0.47 per diluted share, in the first quarter of 2020, and compared with net income of $9.0 million, or $0.32 per diluted share, in the second quarter of 2019.
Conference Call Information
Nova will host a conference call today, August 4, 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: 1-866-548-4713
9 a.m. Eastern 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 August 4, 2020 at 12 p.m. Eastern Time to August 11, 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
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 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 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.
* Stock-based compensation expenses for the three months ended June 30, 2020 included in – Cost of revenues products - 169; Cost of revenues services - 110; Research and development expenses, net – 604; Sales and marketing expenses – 327; General and administrative expenses – 244
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