Nova Announces 2012 First Quarter Results

REHOVOT, Israel, May 2, 2012 /PRNewswire/ --

Nova Measuring Instruments Ltd. (Nasdaq: NVMI), provider of leading edge stand alone metrology and the market leader of integrated metrology solutions to the semiconductor process control market, today reported its 2012 first quarter results.

Highlights for the First Quarter of 2012

  • Quarterly revenues of $22.6 million, up 18% from the fourth quarter of 2011
  • Gross margin of 56%
  • GAAP net income of $2.7 million, or $0.10 per diluted share
  • Non-GAAP net income of $4.1 million, or $0.15 per diluted share

Management Comments

"The pickup in bookings continued during the first quarter, resulting in revenues at the high end of our guidance," said Gabi Seligsohn, President and CEO of Nova. "Our operating margin of 14% was above our guidance, owing to favorable revenue mix during the first quarter, which more than offset higher operating expenses to support our future growth."

"With our prior success in penetrating more customers and our focus on the most advanced technology nodes, we are well positioned to capitalize on the positive trends taking place in the foundry segment, where end market demand is very high. The need for additional capacity at 28nm and below and for rapid yield improvements, translate into strong demand for our process control solutions. Our ability to offer short lead times is also paying off, as some customers are attempting to accelerate tool deliveries in light of capacity insufficiency."

"Looking ahead, we expect to benefit from our deep involvement in process development with leading-edge customers and from our continued exposure to the segments of the market that are likely to show the highest growth. After some recent weakness, we expect NAND and DRAM to come back towards the end of the year or the beginning of 2013, fueled by signs of insufficient capacity at the high end driven by demand for tablets, smartphones and ultrabooks as well as the launch of Windows 8. This improvement on the memory side may contribute to maintaining strong revenues into next year."

2012 Second Quarter Guidance

For the second quarter of 2012, management expects revenues of $24.5-$26.5 million, with operating margins of 13%-17%, and with GAAP diluted earnings per share of $0.09-$0.13.

On a Non-GAAP basis, which excludes adjustments of deferred income tax assets and stock based compensation expenses, management expects diluted earnings per share of $0.14-$0.19 for the second quarter of 2012.

2012 First Quarter Results

Total revenues for the first quarter of 2012 were $22.6 million, a decrease of 20% relative to the first quarter of 2011, and an increase of 18% relative to the fourth quarter of 2011.

Gross margin for the first quarter of 2012 was 56%, compared with 58% in the first quarter of 2011 and 55% in the fourth quarter of 2011.

Operating expenses in the first quarter of 2012 were $9.3 million, compared with $8.4 million in the first quarter of 2011 and $8.3 million in the fourth quarter of 2011.

On a GAAP basis, the company reported net income of $2.7 million, or $0.10 per diluted share, in the first quarter of 2012. This compares to a GAAP net income of $8.1 million, or $0.30 per diluted share, in the first quarter of 2011, and a GAAP net income of $5.0 million, or $0.18 per diluted share, in the fourth quarter of 2011.

On a Non-GAAP basis, which excludes deferred income tax expenses and benefits and stock based compensation expenses, the company reported net income of $4.1 million, or $0.15 per diluted share, in the first quarter of 2012. This compares to a Non-GAAP net income of $8.3 million, or $0.31 per diluted share, in the first quarter of 2011, and a Non-GAAP net income of $2.9 million, or $0.11 per diluted share, in the fourth quarter of 2011.

Total cash reserves at the end of the first quarter of 2012 were $86.7 million.

Conference Call Dial-in

The Company will host a conference call today, May 2, 2012, at 9:00am ET. To participate, please dial in the US: 1 877 249 9037; or internationally: +972 3 763 0147. A recording of the call will be available on Nova's website, within 24 hours following the end of the call. In addition, a presentation to accompany the conference call will be available together with a live webcast of the conference call. This will be accessible from a link on Nova's website at http://www.nova.co.il.

About Nova

Nova Measuring Instruments Ltd. develops, produces and markets advanced integrated and stand alone metrology solutions for the semiconductor manufacturing industry. Nova is traded on the NASDAQ & TASE under the symbol NVMI. The Company's website is http://www.nova.co.il.

This press release provides financial measures that exclude non-cash charges for stock-based compensation and for deferred income tax expenses and benefits, 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 trends, demand for our products, expected deliveries, transaction, expected revenues, operating results, earnings 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. These risks and other factors include but are not limited to: our dependency on two product lines; the highly cyclical nature of the markets we target; 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 OEM suppliers; cyber security risks; risks related to open source technologies; our ability to retain our competitive position despite the ongoing consolidation in our industry; risks associated with our dependence on a single manufacturing facility; our ability to expand our manufacturing capacity or marketing efforts to support our future growth; our dependency on a small number of large customers and small number of suppliers; our dependency on our key employees; risks related to changes in our order backlog; risks related to the financial, political and environmental instabilities in Asia; risks related to our intellectual property; changes in customer demands for our products; new product offerings from our competitors; changes in or an inability to execute our business strategy; unanticipated manufacturing or supply problems; changes in tax requirements; changes in customer demand for our products; risks related to currency fluctuations; 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 31,2011, filed with the Securities and Exchange Commission on March 28, 2012. 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.


NOVA MEASURING INSTRUMENTS LTD.

CONSOLIDATED BALANCE SHEET

(U.S. dollars in thousands)

   
                                              As of              As of
                                            March 31,       December 31,
                                                2012               2011

   CURRENT ASSETS
    Cash and cash equivalents                 26,594             18,716
    Short-term interest-bearing bank
    deposits                                  57,879             66,247
    Held to maturity securities                1,636              1,582
    Trade accounts receivable                 18,491             13,402
    Inventories                               13,285              9,608
    Deferred income tax assets                 1,590              2,500
    Other current assets                       2,187              1,173
                                             121,662            113,228
   LONG-TERM ASSETS
    Long-term interest-bearing bank deposits     545                545
    Other long-term assets                       291                291
    Severance pay funds                        3,110              2,885
                                               3,946              3,721

   FIXED ASSETS, NET                           5,921              5,998

   TOTAL ASSETS                              131,529            122,947

   CURRENT LIABILITIES
    Trade accounts payable                    12,046              8,305
    Deferred income                            3,533              2,172
    Other current liabilities                  7,919              8,082
                                              23,498             18,559

   LONG-TERM LIABILITIES
    Liability for employee severance pay       4,057              3,851
    Deferred income                              410                611
    Other long-term liability                     13                 20
                                               4,480              4,482

   SHAREHOLDERS' EQUITY                      103,551             99,906

   TOTAL LIABILITIES AND 
   SHAREHOLDERS' EQUITY                      131,529            122,947



NOVA MEASURING INSTRUMENTS LTD.

QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS

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

   
                                                 Three months ended
                                            March 31, December 31, March 31,
                                                2012       2011       2011

   REVENUES
     Products                                 18,767     15,273     23,918
     Services                                  3,835      3,919      4,251
                                              22,602     19,192     28,169

   COST OF REVENUES
     Products                                  7,195      5,972      9,198
     Services                                  2,829      2,693      2,735
                                              10,024      8,665     11,933

   GROSS PROFIT                               12,578     10,527     16,236

   OPERATING EXPENSES
     Research and Development expenses,
     net                                       5,581      4,567      4,967
     Sales and Marketing expenses              2,881      2,951      2,711
     General and Administration expenses         842        746        729
                                               9,304      8,264      8,407

   OPERATING PROFIT                            3,274      2,263      7,829

     INTEREST INCOME, NET                        409        207        219

   INCOME BEFORE INCOME TAXES                  3,683      2,470      8,048

     INCOME TAXES BENEFIT (EXPENSES)            (946)     2,500         --

   NET INCOME FOR THE PERIOD                   2,737      4,970      8,048

     Earnings per share:
        Basic                                   0.10       0.19       0.31
        Diluted                                 0.10       0.18       0.30

     Shares used for calculation of earnings
     per share:
        Basic                                 26,541     26,425     25,960
        Diluted                               27,234     27,007     27,020



NOVA MEASURING INSTRUMENTS LTD.

QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)

   
                                             Three months ended     
                                      March 31,  December 31,     March 31,
                                          2012        2011           2011
   CASH FLOW - OPERATING ACTIVITIES

     Net income for the period           2,737        4,970         8,048

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

       Depreciation and amortization       577          541           362
       Amortization of deferred
       stock-based compensation            420          476           266
       Decrease in liability for
       employee termination benefits, net  (10)         (60)           (6)
       Deferred income taxes               910       (2,500)           --
       Increase in trade accounts
       receivables                      (5,089)      (1,281)       (1,678)
       Decrease (increase) in
       inventories                      (3,604)         954        (1,269)
       Decrease (increase) in other
       current and long term assets       (531)          85        (1,083)
       Increase in trade accounts
       payables and other long-term
       liabilities                       3,737          332         2,663
       Increase (decrease) in other
       current liabilities                (241)         625           678
       Increase (decrease) in short and
       long term deferred income         1,160         (287)          373
   Net cash provided by operating
   activities                               66         3,855        8,354

   CASH FLOW - INVESTMENT ACTIVITIES

     Decrease (increase) in
     short-term interest-bearing
     bank deposits                       8,368         8,044     (20,303)
     Investments in long-term
     interest-bearing bank deposits        --             86          --
     Investments in short-term held
     to maturity securities               (54)          (482)         --
     Additions to fixed assets           (573)          (632)       (676)
     Net cash provided by (used in)
     investment activities              7,741          7,016     (20,979)

   CASH FLOW - FINANCING ACTIVITIES

     Shares issued under employee
     share-based plans and exercise
     of warrants                           71            163       2,217
     Net cash provided by financing
     activities                            71            163       2,217

     Increase (decrease) in cash and
     cash equivalents                   7,878        11,034     (10,408)
     Cash and cash equivalents -
     beginning of period               18,716         7,682      25,394
     Cash and cash equivalents - end
     of period                         26,594        18,716      14,986



DISCLOSURE OF NON-GAAP NET INCOME

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

   
                                                 Three months ended
                                         March 31,  December 31,   March 31,
                                             2012        2011          2011

   GAAP Net income for the period           2,737       4,970         8,048

   Non-GAAP Adjustments:
     Stock based compensation expenses        420         476           266
     Deferred income taxes expenses
     (benefits)                               910      (2,500)           --

   Non-GAAP Net income for the period       4,067       2,946         8,314

   Non-GAAP Net income per share:
     Basic                                   0.15        0.11          0.32
     Diluted                                 0.15        0.11          0.31

   Shares used for calculation of
   Non-GAAP net income per share:
     Basic                                 26,541      26,425        25,960
     Diluted                               27,234      27,007        27,020



Company Contact:        
Dror David, Chief Financial Officer
Nova Measuring Instruments Ltd.
Tel: +972-8-938-7505
E-mail: info@nova.co.il
http://www.nova.co.il

Investor relations Contacts:  
Ehud Helft / Kenny Green
CCG Investor Relations
Tel: +1-646-201-9246
E-mail: info@ccgisrael.com


SOURCE Nova Measuring Instruments Ltd



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