Nova Announces 2013 Third Quarter Results

REHOVOT, Israel, Oct. 30, 2013 /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 2013 third quarter results.

Highlights for the Third Quarter of 2013

  • Quarterly revenues of $25.8 million
  • Blended gross margin of 51%
  • GAAP Net income of $2.2 million, or $0.08 per diluted share
  • Non-GAAP Net income of $2.7 million, or $0.10 per diluted share
  • Positive cash flow from operations of $3.3 million

Management Comments

"Our Q3 results were consistent with our guidance and continue to reflect our strong position in the foundry segment," said Eitan Oppenhaim, President and CEO. "The value of our broad base of foundry customers is quite apparent as they ramp up their 2X nm technology nodes, putting us on track for another year in which we outperform the industry and report record revenues."

"We are also achieving our objective of expanding into additional process steps, in addition to multiple technology nodes, as evidenced by the recent selections of our systems as process tool of record for multiple process steps including CMP and Etch."

"Our strong bookings in Q3 reflect the intensive ramp up that our customers are experiencing, as well as our success in achieving early engagement with our customers as they accelerate the transition to advanced technology nodes. In Q3, we also announced a new memory customer, indicating progress toward our goal of improving our presence in this segment. We are very pleased with the progress we had this quarter with our key business initiatives, which positions us very well towards 2014."

2013 Third Quarter Results

Total revenues for the third quarter of 2013 were $25.8 million, an increase of 6% relative to the third quarter of 2012, and a decrease of 8% relative to the second quarter of 2013.

Gross margin for the third quarter of 2013 was 51%, compared with 53% in the third quarter of 2012 and 55% in the second quarter of 2013.

Operating expenses in the third quarter of 2013 were $10.9 million, compared with $9.9 million in the third quarter of 2012 and $12.0 million in the second quarter of 2013.

On a GAAP basis, the company reported net income of $2.2 million, or $0.08 per diluted share, in the third quarter of 2013. This compares to a net income of $2.9 million, or $0.11 per diluted share, in the third quarter of 2012, and a net income of $2.8 million, or $0.10 per diluted share, in the second quarter of 2013.

On a Non-GAAP basis, which excludes deferred income tax adjustments, stock based compensation expenses and loss or income related to equipment and inventory damage, the company reported net income of $2.7 million, or $0.10 per diluted share, in the third quarter of 2013. This compares to a net income of $3.7 million, or $0.14 per diluted share, in the third quarter of 2012, and a net income of $3.8 million, or $0.14 per diluted share, in the second quarter of 2013.

Total cash reserves at the end of the third quarter of 2013 were $100.0 million.

Nova will discuss the results, along with its outlook and guidance for the fourth quarter of 2013, on a conference call today, October 30, 2013, beginning at 8:30am ET. To participate, please dial in the US: 1 877 280 1254; or internationally: +972 3 763 0147 or 1 646 254 3360. The conference call will be webcast live from a link on Nova's website at http://ir.novameasuring.com, together with a presentation to accompany the call. A replay of the call will be available from the same link.

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 www.novameasuring.com.

This press release provides financial measures that exclude non-cash charges for stock-based compensation, deferred income taxes expenses, income from insurance claim and loss related to equipment and inventory damage 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, transactions, 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 PEM; risks related to exclusivity obligations and non-limited liability that may be included in our commercial agreements and arrangements; cyber security risks; risks related to open source technologies; our ability to retain our competitive position despite the ongoing consolidation in our industry; risks related to our dependence on a single manufacturing facility; risks related to our lease agreements; our ability to expand our manufacturing capacity or marketing efforts to support our future growth; risks related to quarterly fluctuations in our operating results; risks related to the extremely competitive market we are operation in; 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, 2012 filed with the Securities and Exchange Commission on March 11, 2013. 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.

CONSOLIDATED BALANCE SHEET

(U.S. dollars in thousands)




As of
September 30,


As of
December 31,



2013


2012






CURRENT ASSETS





   Cash and cash equivalents


15,757


15,963

Short-term interest-bearing bank deposits


83,919


75,039

Trade accounts receivable


20,829


17,362

Inventories


16,168


17,827

Deferred income tax assets


412


1,850

Other current assets


3,695


2,549



140,780


130,590

LONG-TERM ASSETS





Long-term interest-bearing bank deposits


405


405

Other long-term assets


424


516

Severance pay funds


1,868


1,873



2,697


2,794






FIXED ASSETS, NET


9,353


8,660






TOTAL ASSETS


152,830


142,044






CURRENT LIABILITIES





Trade accounts payable


10,854


10,819

Deferred income


3,447


4,775

Other current liabilities


9,839


8,444



24,140


24,038






LONG-TERM LIABILITIES





Liability for employee severance pay


2,850


2,806

Deferred income


548


159

Other long-term liability


263


270



3,661


3,235






SHAREHOLDERS' EQUITY


125,029


114,771






TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


152,830


142,044

 

NOVA MEASURING INSTRUMENTS LTD.

QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS

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




Three months ended


September 30,

2013


June 30,

2013


September 30,

2012



REVENUES






Products

19,911


22,419


19,359

Services

5,860


5,705


5,059


25,771


28,124


24,418







COST OF REVENUES






Products

9,045


9,342


7,999

Services

3,626


3,449


3,483


12,671


12,791


11,482







GROSS PROFIT

13,100


15,333


12,936







OPERATING EXPENSES






Research and Development expenses, net

7,021


7,567


6,003

Sales and Marketing expenses

2,643


2,968


2,967

General and Administration expenses

1,256


1,472


973


10,920


12,007


9,943







OPERATING PROFIT

2,180


3,326


2,993







INTEREST INCOME, NET

257


246


283







INCOME BEFORE INCOME TAXES

2,437


3,572


3,276







    INCOME TAX EXPENSES

197


769


381







NET INCOME FOR THE PERIOD

2,240


2,803


2,895



















Earnings per share:






     Basic

0.08


0.10


0.11

     Diluted

0.08


0.10


0.11







Shares used for calculation of earnings per share:






     Basic

27,237


27,121


26,646

     Diluted

27,503


27,419


27,485







 

NOVA MEASURING INSTRUMENTS LTD.

YEAR TO DATE CONSOLIDATED STATEMENTS OF OPERATIONS

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




Nine-months ended


September 30, 2013


September 30, 2012




REVENUES




Product sales

64,671


60,196

Services

16,649


13,874


81,320


74,070





COST OF REVENUES




Product sales

27,466


24,344

Services

10,655


9,636


38,121


33,980





GROSS PROFIT

43,199


40,090





OPERATING EXPENSES




Research & Development expenses, net

22,087


17,477

Sales & Marketing expenses

8,835


8,896

General & Administration expenses

3,847


2,787


34,769


29,160





OPERATING PROFIT

8,430


10,930





    INTEREST INCOME, NET

633


1,031





INCOME BEFORE INCOME TAXES

9,063


11,961





    INCOME TAX  EXPENSES

1,625


2,605





NET INCOME FOR THE PERIOD

7,438


9,356









Net income per share:




     Basic

0.27


0.35

     Diluted

0.27


0.34









Shares used for calculation of net income per share:




     Basic

27,071


26,598

     Diluted       

27,343


27,260

 

NOVA MEASURING INSTRUMENTS LTD.

QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)



Three months ended


September 30,
2013


June 30,
2013


September 30,

2012

CASH FLOW – OPERATING ACTIVITIES












Net income for the period

2,240


2,803


2,895

 

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












     Depreciation and amortization

907


846


771

     Loss related to inventory damage

-


148


-

     Amortization of deferred stock-based compensation

368


624


489

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

(1)


66


(80)

     Deferred income taxes

116


713


349

     Decrease (increase) in trade accounts receivables

(1,112)


(712)


2,619

     Decrease (increase) in inventories

144


583


(3,770)

     Decrease (increase) in other current and long term assets

(1,064)


841


(64)

         Increase (decrease) in trade accounts payables and other long-term liabilities

250


(147)


(5)

         Increase (decrease) in other current liabilities

614


(504)


485

     Increase (decrease) in short and long term deferred income

793


(1,793)


572

Net cash provided by operating activities

3,255


3,468


4,261







CASH FLOW – INVESTMENT ACTIVITIES












Decrease (increase) in short-term interest-bearing bank deposits

(4,548)


(6,317)


11,100

Investments in short-term held to maturity securities

-


-


(5)

Proceeds from insurance claim

-


219


-

Additions to fixed assets

(761)


(1,042)


(896)

Net cash provided by (used in) investment activities

(5,309)


(7,140)


10,199







CASH FLOW – FINANCING ACTIVITIES












Shares issued under employee share-based plans

12


599


104

Net cash provided by financing activities

12


599


104







Increase (decrease) in cash and cash equivalents

(2,042)


(3,073)


14,564

Cash and cash equivalents – beginning of period

17,799


20,872


20,408

Cash and cash equivalents – end of period

15,757


17,799


34,972







 

NOVA MEASURING INSTRUMENTS LTD.

YEAR TO DATE CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)



Nine-months ended


September 30, 2013


September 30, 2012

CASH FLOW – OPERATING ACTIVITIES








Net income for the period

7,438


9,356

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








     Depreciation and amortization

2,577


1,925

     Loss related to inventory damage

148


-

     Amortization of deferred stock-based compensation

1,577


1,318

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

54


(131)

     Deferred income taxes

1,438


2,500

         Increase in trade accounts receivables

(3,467)


(1,499)

     Decrease (increase) in inventories

167


(10,656)

     Increase in other current and long term assets

(943)


(717)

         Increase in trade accounts payables and other long term liabilities

28


4,902

     Increase (decrease) increase in other current liabilities

1,454


(131)

     Increase (decrease) in short and long term deferred income

(939)


1,944

Net cash provided by operating activities

9,532


8,811





CASH FLOW – INVESTMENT ACTIVITIES








Decrease (increase) in short-term interest-bearing bank deposits

(8,880)


9,318

Proceeds from short-term held to maturity securities

-


28

Proceeds from insurance claim

219


-

Additions to fixed assets

(2,145)


(2,148)

Net cash provided by (used in) investment activities

(10,806)


7,198





CASH FLOW – FINANCING ACTIVITIES








Shares issued under employee share-based plans

1,068


247

Net cash provided by financing activities

1,068


247





Increase (decrease) in cash and cash equivalents

(206)


16,256

Cash and cash equivalents – beginning of period

15,963


18,716

Cash and cash equivalents – end of period

15,757


34,972

 

DISCLOSURE OF NON-GAAP NET INCOME

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



Three months ended


September 30,


June 30,


September 30,


2013


2013


2012







GAAP Net income for the period

2,240


2,803


2,895







Non-GAAP Adjustments:






Stock based compensation expenses

368


624


489

Deferred income taxes expenses

116


713


349

Income from insurance claim

-


(509)


-

Loss related to equipment and inventory damage

-


148


-







Non-GAAP Net income for the period

2,724


3,779


3,733







Non-GAAP Net income per share:






     Basic

0.10


0.14


0.14

     Diluted

0.10


0.14


0.14







Shares used for calculation of Non-GAAP net income per share:






     Basic

27,237


27,121


26,646

     Diluted

27,503


27,419


27,485
















Nine-months ended




September 30,


September 30,




2013


2012







GAAP Net income for the period



7,438


9,356







Non-GAAP Adjustments:






Stock based compensation expenses



1,577


1,318

Deferred income taxes expenses



1,438


2,500

Income from insurance claim



(509)


-

Loss related to equipment and inventory damage



148


-







Non-GAAP Net income for the period



10,092


13,174







Non-GAAP Net income per share:






     Basic



0.37


0.50

     Diluted



0.37


0.49







Shares used for calculation of Non-GAAP net income per share:






     Basic



27,071


26,598

     Diluted



27,343


27,260

 

Company Contact:

Dror David, Chief Financial Officer

Nova Measuring Instruments Ltd.

Tel: +972-73-229-5833

E-mail: info@novameasuring.com  

www.novameasuring.com

Investor Relations Contacts:

Ehud Helft / Kenny Green

CCG Investor Relations

Tel: +1-646-201-9246

E-mail: nova@ccgisrael.com

SOURCE Nova Measuring Instruments Ltd.



RELATED LINKS
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