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Nova Reports Second Quarter 2020 Results
[August 04, 2020]

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:

  • Quarterly revenue of $62.6 million, meeting guidance of $58 million to $66 million
  • GAAP net income of $8.7 million, or $0.30 per diluted share, meeting guidance of $0.29 to $0.43 per share
  • Non-GAAP net income of $13.8 million, or $0.48 per diluted share, meeting guidance of $0.37 to $0.51 per share
  • Balanced revenue mix with five major customers contributing over 10% each to the geographically diverse product revenue
  • Record quarterly integrated metrology revenues, driven by growing demand for advanced integrated solutions across different technology nodes

 





GAAP Results ($K)


Q2 2020

Q1 2020

Q2 2019

Revenues

$62,586

$61,022

$51,120

Net Income

$8,672

$11,682

$6,468

Earnings per Diluted Share

$0.30

$0.41

$0.23

NON-GAAP Results ($K)


Q2 2020

Q1 2020

Q2 2019

Net Income

$13,774

$13,481

$9,007

Earnings per Diluted Share

$0.48

$0.47

$0.32


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.

Management Comments

"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:

  • $58 million to $66 million in revenue
  • $0.25 to $0.39 in diluted GAAP EPS
  • $0.34 to $0.47 in diluted non-GAAP EPS

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
ISRAEL TOLL-FREE Dial-in Number: 1-809-212-883
INTERNATIONAL Dial-in Number: 1-323-794-2093

At:

9 a.m. Eastern Time
6 a.m. Pacific Time
4 p.m. Israel Time
Please reference conference ID: 8576081

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
Replay Dial-in TOLL/INTERNATIONAL: 1-412-317-6671
Replay Pin Number: 8576081

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.

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

 

 


NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

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




As of


ASSETS


June 30,

2020 


December 31,

2019


Current assets






Cash and cash equivalents


25,885


31,748


Short-term interest-bearing bank deposits


187,535


154,533


Trade accounts receivable


44,457


51,603


Inventories


56,584


48,362


Other current assets


12,383


17,122








Total current assets


326,844


303,368








Non-current assets






Interest-bearing bank deposits


2,804


2,813


Restricted interest-bearing bank deposits


2,000


2,000


Deferred tax assets


5,100


4,554


Severance pay funds


1,181


1,210


Right of-use assets


27,555


28,256


Property and equipment, net


31,489


30,566


Intangible assets, net


6,310


7,562


Goodwill


20,114


20,114








Total non-current assets


96,553


97,075








Total assets


423,397


400,443



 LIABILITIES AND SHAREHOLDERS' EQUITY






Current liabilities






Trade accounts payable


21,716


20,706


Deferred revenues


1,165


2,256


Operating lease current liabilities


1,935


2,236


Other current liabilities


23,161


21,751








Total current liabilities


47,977


46,949








Non-current liabilities






Accrued severance pay


2,119


2,120


Operating lease long-term liabilities


30,891


31,077


Other long-term liability


6,448


5,758








Total non-current liabilities


39,458


38,955








Shareholders' equity


335,962


314,539








Total liabilities and shareholders' equity 


423,397


400,443


 

 

 

NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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



Three months ended


Six months ended


June 30,

 2020


June 30,

 2019


June 30,

 2020


June 30,

 2019









Revenues:








Products

47,097


37,401


92,822


81,462

Services

15,489


13,719


30,786


26,315

Total revenues

62,586


51,120


123,608


107,777









Cost of revenues:








Products

17,150


14,527


35,190


32,104

Services

8,835


8,483


17,475


15,979

Total cost of revenues

25,985


23,010


52,665


48,083









Gross profit

36,601


28,110


70,943


59,694









Operating expenses:








Research and development expenses, net

12,622


11,654


24,305


24,238

Sales and marketing expenses

7,263


6,641


13,826


13,787

General and administrative expenses

5,775


2,384


8,364


4,906

Amortization of acquired intangible assets

626


656


1,252


1,312

Total operating expenses

26,286


21,335


47,747


44,243









Operating income

10,315


6,775


23,196


15,451









Financing income, net

387


855


1,415


1,365









Income before tax on income

10,702


7,630


24,611


16,816









Income tax expenses

2,030


1,162


4,257


2,592









Net income for the period

8,672


6,468


20,354


14,224









Earnings per share:








Basic

0.31


0.23


0.73


0.51

Diluted

0.30


0.23


0.70


0.50









Shares used for calculation of earnings per share:








Basic

28,039


27,869


28,037


27,898

Diluted

28,888


28,564


28,890


28,234

 

 

 

NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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



Three months ended


Six months ended


June 30,

2020


June 30,

2019


June 30,

2020


June 30,

2019

Cash flows from operating activities:








Net income for the period

8,672


6,468


20,354


14,224


Adjustments to reconcile net income to net cash
provided by (used in) operating activities:








Depreciation and amortization

2,039


2,770


4,783


5,470

Share-based compensation

1,454


1,086


2,772


2,298

Change in deferred tax assets, net

(345)


(147)


(546)


(344)

Change in accrued severance pay, net

42


(6)


28


27

Change in trade accounts receivable

10,586


(1,157)


7,146


5,453

Change in inventories

(7,022)


(3,323)


(8,470)


(7,855)

Change in other current and long-term assets

1,046


1,978


4,739


2,580

Change in trade accounts payable

2,920


(5,430)


665


(2,126)

Change in other current and long-term liabilities

1,140


(3,457)


2,206


(4,579)

Change in short term deferred revenues

(1,437)


196


(1,091)


1,330









Net cash provided by (used in) operating activities

19,095


(1,022)


32,586


16,478









Cash flow from investment activities:








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

(25,458)


8,447


(32,993)


6,075

Purchase of property and equipment

(890)


(5,716)


(3,160)


(7,693)









Net cash provided by (used in) investment activities

(26,348)


2,731


(36,153)


(1,618)









Cash flows from financing activities:








Purchases of treasury shares

(2,535)


(7,159)


(2,549)


(7,159)

Shares issued upon exercise of options

142


166


253


272









Net cash used in financing activities

(2,393)


(6,993)


(2,296)


(6,887)









Increase (decrease) in cash and cash equivalents

(9,646)


(5,284)


(5,863)


7,973

Cash and cash equivalents – beginning of period

35,531


38,134


31,748


24,877

Cash and cash equivalents – end of period

25,885


32,850


25,885


32,850










 


 

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


June 30,
2020


March 31,
2020


June 30,
2019

GAAP gross profit

36,601


34,342


28,110

Stock-based compensation expenses *

279


256


222

Facilities transition costs

-


-


271

Non-GAAP gross profit

36,880


34,598


28,603

GAAP gross margin as a percentage of revenues

58%


56%


55%

Non-GAAP gross margin as a percentage of revenues

59%


57%


56%







GAAP operating income

10,315


12,881


6,775

Stock-based compensation expenses *

1,454


1,318


1,086

Amortization of acquired intangible assets

626


626


656

One-time expense related to a transaction made by a
financial institution without Company authorization

3,000


-


-

Facilities transition costs

-


-


827

Non-GAAP operating income

15,395


14,825


9,344

GAAP operating margin as a percentage of revenues

16%


21%


13%

Non-GAAP operating margin as a percentage of revenues

25%


24%


18%







GAAP net income

8,672


11,682


6,468

Stock-based compensation expenses *

1,454


1,318


1,086

Amortization of acquired intangible assets

626


626


656

One-time expense related to a transaction made by a
financial institution without Company authorization

3,000


-


-

Facilities transition costs

-


-


827

Revaluation of long-term liabilities

594


(66)


295

Tax effect of non-GAAP adjustments

(572)


(79)


(325)

Non-GAAP net income

13,774


13,481


9,007







GAAP basic earnings per share

0.31


0.42


0.23

Non-GAAP basic earnings per share

0.49


0.48


0.32







GAAP diluted earnings per share

0.30


0.41


0.23

Non-GAAP diluted earnings per share

0.48


0.47


0.32







Shares used for calculation of earnings per share:






Basic

28,039


27,902


27,869

Diluted

28,888


28,760


28,564








* 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

 

 

 

Cision View original content:http://www.prnewswire.com/news-releases/nova-reports-second-quarter-2020-results-301105594.html

SOURCE Nova


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