2014

Nova Announces 2012 Second Quarter Results

REHOVOT, Israel, July 31, 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 second quarter results.

Highlights for the Second Quarter of 2012

  • Quarterly revenues of $27.1 million, up 20% over the first quarter of 2012
  • Blended gross margin of 54%
  • GAAP Net income of $3.7 million, or $0.14 per diluted share
  • Non-GAAP Net income of $5.4 million, or $0.20 per diluted share
  • Positive cash flow from operations of $4.5 million

Management Comments

"Our results during the second quarter exceeded the high end of our revenues and earnings per share guidance," said Gabi Seligsohn, President and CEO of Nova. "Our ability to outperform the industry during the quarter is attributed to our strong position in the market segments that are experiencing the highest demand, and which are facing the most challenging process yield requirements.

"The need for additional foundry capacity and yield improvement at 28nm continued to drive strong demand for our solutions. Looking ahead, we expect process control to continue to account for a higher share of overall capital expenditures as foundries are planning a move to 20nm, 14nm and beyond, with associated process complexity and yield requirements. We also believe that these manufacturing and development complexities will continue to drive foundry customers towards buying fully configured tools with significant software content.

"We are able to fully capitalize on current demand because we invested aggressively in 28nm technology three years ago and followed with good execution. We have already announced several wins for the more advanced process nodes and enjoy good traction with our recently announced products as well", Mr. Seligsohn noted. "In addition, during the past several months, we have identified additional areas in which we plan to further invest, in order to remain at the forefront of this dynamic industry. Our strong relationships and track record of execution, combined with a further ramp in research and development expenses during the second half of the year, will position us for future growth, while also remaining solidly profitable."

2012 Third Quarter Guidance

For the third quarter of 2012, management expects revenues of $23.0-$25.5 million, with operating margins of 3%-10%, and with GAAP diluted earnings per share of $0.02-$0.10.

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 $0.04-$0.12 for the third quarter of 2012.

2012 Second Quarter Results

Total revenues for the second quarter of 2012 were $27.1 million, a decrease of 9% relative to the second quarter of 2011, and an increase of 20% relative to the first quarter of 2012.

Gross margin for the second quarter of 2012 was 54%, compared with 58% in the second quarter of 2011 and 56% in the first quarter of 2012.

Operating expenses in the second quarter of 2012 were $9.9 million, compared with $8.2 million in the second quarter of 2011 and $9.3 million in the first quarter of 2012.

On a GAAP basis, the company reported net income of $3.7 million, or $0.14 per diluted share, in the second quarter of 2012. This compares to a net income of $9.2 million, or $0.34 per diluted share, in the second quarter of 2011, and a net income of $2.7 million, or $0.10 per diluted share, in the first quarter of 2012.

On a Non-GAAP basis, which excludes deferred income tax expenses and stock based compensation expenses, the company reported net income of $5.4 million, or $0.20 per diluted share, in the second quarter of 2012. This compares to a net income of $9.4 million, or $0.35 per diluted share, in the second quarter of 2011, and a net income of $4.1 million, or $0.15 per diluted share, in the first quarter of 2012.

Total cash reserves at the end of the second quarter of 2012 were $90.5 million.

The Company will host a conference call today, July 31, 2012, at 9:00am ET. To participate, please dial in the US: 1 877 280 2342; or internationally: +972 3 763 0145 or 1 646 254 3367. 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://ir.nova.co.il/webcast.

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 deferred income taxes 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 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
                                               June 30,      December 31,
                                                  2012              2011
 
    CURRENT ASSETS
    Cash and cash equivalents                   20,408            18,716
    Short-term interest-bearing bank deposits   68,029            66,247
    Held to maturity securities                  1,549             1,582
    Trade accounts receivable                   17,520            13,402
    Inventories                                 16,067             9,608
    Deferred income tax assets                     349             2,500
    Other current assets                         1,920             1,173
                                               125,842           113,228
    LONG-TERM ASSETS
    Long-term interest-bearing bank deposits       545               545
    Other long-term assets                         314               291
    Severance pay funds                          3,068             2,885
                                                 3,927             3,721
 
    FIXED ASSETS, NET                            6,523             5,998
 
    TOTAL ASSETS                               136,292           122,947
 
    CURRENT LIABILITIES
    Trade accounts payable                      13,212             8,305
    Deferred income                              4,092             2,172
    Other current liabilities                    7,556             8,082
                                                24,860            18,559
 
    LONG-TERM LIABILITIES
    Liability for employee severance pay         3,982             3,851
    Deferred income                                 63               611
    Other long-term liability                       17                20
                                                 4,062             4,482
 
    SHAREHOLDERS' EQUITY                       107,370            99,906
 
    TOTAL LIABILITIES AND SHAREHOLDERS' 
    EQUITY                                     136,292           122,947


NOVA MEASURING INSTRUMENTS LTD.

QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS

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

                                                  Three months ended
                                           June 30,    March 31,   June 30,
                                              2012         2012       2011
 
    REVENUES
    Products                                22,070       18,767     24,989
    Services                                 4,980        3,835      4,658
                                            27,050       22,602     29,647
 
    COST OF REVENUES
    Products                                 9,150        7,195      9,698
    Services                                 3,324        2,829      2,833
                                            12,474       10,024     12,531
 
    GROSS PROFIT                            14,576       12,578     17,116
 
    OPERATING EXPENSES
    Research and Development expenses,
    net                                      5,893        5,581      4,516
    Sales and Marketing expenses             3,048        2,881      2,778
    General and Administration
    expenses                                   972          842        945
                                             9,913        9,304      8,239
 
    OPERATING PROFIT                         4,663        3,274      8,877
 
    INTEREST INCOME, NET                       339          409        286
 
    INCOME BEFORE INCOME TAXES               5,002        3,683      9,163
 
    INCOME TAX EXPENSES                      1,278          946         --
 
    NET INCOME FOR THE PERIOD                3,724        2,737      9,163
 
    Earnings per share:
    Basic                                     0.14         0.10       0.35
    Diluted                                   0.14         0.10       0.34
 
    Shares used for calculation of earnings
    per share:
    Basic                                   26,610       26,541     26,250
    Diluted                                 27,299       27,234     27,176
 


NOVA MEASURING INSTRUMENTS LTD.

YEAR TO DATE CONSOLIDATED STATEMENTS OF OPERATIONS

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

                                                        Six months ended
                                                     June 30,      June 30, 
                                                        2012          2011
 
    REVENUES
    Product sales                                     40,837        48,907
    Services                                           8,815         8,909
                                                      49,652        57,816
 
    COST OF REVENUES
    Product sales                                     16,345        18,896
    Services                                           6,153         5,568
                                                      22,498        24,464
 
    GROSS PROFIT                                      27,154        33,352
 
    OPERATING EXPENSES
    Research & Development expenses, net              11,474         9,483
    Sales & Marketing expenses                         5,929         5,489
    General & Administration expenses                  1,814         1,674
                                                      19,217        16,646
 
    OPERATING PROFIT                                   7,937        16,706
 
    INTEREST INCOME, NET
                                                         748           505
 
    INCOME BEFORE INCOME TAXES
                                                       8,685        17,211
 
    INCOME TAX EXPENSES                                2,224            --
 
    NET INCOME FOR THE PERIOD                          6,461        17,211
 
    Net income per share:
    Basic                                               0.24          0.66
    Diluted                                             0.24          0.64
 
    Shares used for calculation of net income per
    share:
    Basic                                             26,575        26,105
    Diluted                                           27,269        27,014


NOVA MEASURING INSTRUMENTS LTD.

QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)

                                                Three months ended
                                        June 30,     March 31,    June 30,
                                           2012         2012         2011
    CASH FLOW - OPERATING ACTIVITIES
 
    Net income for the period             3,724        2,737        9,163
    Adjustments to reconcile net
    income to net cash 
    provided by operating
    activities:
 
    Depreciation and amortization          577           577          377
    Amortization of deferred
    stock-based compensation               409           420          272
    Increase (decrease) in liability
    for employee 
    termination benefits, net              (41)          (10)         203
    Deferred income taxes                1,241           910           --
    Decrease (increase) in trade
    accounts receivables                   971        (5,089)      (4,835)
    Increase in inventories             (3,282)       (3,604)      (2,240)
    Increase in other current and
    long term assets                      (122)         (531)         (33)
    Increase (decrease) in trade
    accounts payables 
    and other long-term liabilities      1,170         3,737         (667)
    Decrease in other current
    liabilities                           (375)         (241)        (502)
    Increase in short and long term
    deferred income                        212         1,160        5,266
    Net cash provided by operating
    activities                           4,484            66        7,004
 
    CASH FLOW - INVESTMENT
    ACTIVITIES
 
    Decrease (increase) in
    short-term interest-bearing
    bank deposits                      (10,150)        8,368       (9,426)
    Proceeds from (investments in)
    short-term held to 
    maturity securities                     87           (54)      (1,186)
    Additions to fixed assets             (679)         (573)        (539)
    Net cash provided by (used in)
    investment activities              (10,742)        7,741      (11,151)
 
    CASH FLOW - FINANCING ACTIVITIES
 
    Shares issued under employee
    share-based plans 
    and exercise of warrants                72            71          225
    Net cash provided by financing
    activities                              72            71          225
 
    Increase (decrease) in cash and
    cash equivalents                    (6,186)        7,878       (3,922)
    Cash and cash equivalents -
    beginning of period                 26,594        18,716       14,986
    Cash and cash equivalents - end
    of period                           20,408        26,594       11,064
 


NOVA MEASURING INSTRUMENTS LTD.

YEAR TO DATE CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)

                                                        Six months ended
                                                     June 30,      June 30, 
                                                        2012          2011
    CASH FLOW - OPERATING ACTIVITIES
 
    Net income for the period                          6,461        17,211
    Adjustments to reconcile net income to net
    cash provided by operating activities:
 
    Depreciation and amortization                      1,154           739
    Amortization of deferred stock-based
    compensation                                         829           538
    Increase (decrease) in liability for employee
    termination benefits, net                            (51)          197
    Deferred income taxes                              2,151            --
    Increase in trade accounts receivables            (4,118)       (6,513)
    Increase in inventories                           (6,886)       (3,509)
    Increase in other current and long term assets      (653)       (1,116)
    Increase in trade accounts payables and other
    long term liabilities                              4,907         1,996
    Increase (decrease) in other current
    liabilities                                         (616)          176
    Increase in short and long term deferred
    income                                             1,372         5,639
    Net cash provided by operating activities          4,550        15,358
 
    CASH FLOW - INVESTMENT ACTIVITIES
 
    Increase in short-term interest-bearing bank
    deposits                                          (1,782)      (29,729)
    Proceeds from (investments in) short-term held
    to maturity securities                                33        (1,186)
    Additions to fixed assets                         (1,252)       (1,215)
    Net cash used in investment activities            (3,001)      (32,130)
 
    CASH FLOW - FINANCING ACTIVITIES
 
    Shares issued under employee share-based plans       143         2,442
    Net cash provided by financing activities            143         2,442

    Increase (decrease) in cash and cash
    equivalents                                        1,692       (14,330)
    Cash and cash equivalents - beginning of
    period                                            18,716        25,394
    Cash and cash equivalents - end of period         20,408        11,064


DISCLOSURE OF NON-GAAP NET INCOME

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

                                                   Three months ended
                                            June 30,   March 31,    June 30,
                                               2012        2011        2011
 
    GAAP Net income for the period            3,724       2,737       9,163
 
    Non-GAAP Adjustments:
    Stock based compensation expenses           409         420         272
    Deferred income taxes expenses            1,241         910          --
 
    Non-GAAP Net income for the period        5,374       4,067       9,435
 
    Non-GAAP Net income per share:
    Basic                                      0.20        0.15        0.36
    Diluted                                    0.20        0.15        0.35
 
    Shares used for calculation of
    Non-GAAP net income per share:
    Basic                                    26,610      26,541      26,250
    Diluted                                  27,299      27,234      27,176
 


                                                         Six months ended
                                                       June 30,     June 30,
                                                         2012         2011
 
    GAAP Net income for the period                      6,461       17,211
 
    Non-GAAP Adjustments:
    Stock based compensation expenses                     829          538
    Deferred income taxes expenses                      2,151           --
 
    Non-GAAP Net income for the period                  9,441       17,749
 
    Non-GAAP Net income per share:
    Basic                                                0.36         0.66
    Diluted                                              0.35         0.64
 
    Shares used for calculation of Non-GAAP net
    income per share:
    Basic                                              26,575       26,105
    Diluted                                            27,269       27,014


Company Contact:                               
Dror David, Chief Financial Officer                                        
Nova Measuring Instruments Ltd.                                    
Tel: +972-73-229-5833                              
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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