Nova Announces Record 2014 First Quarter Record Quarterly Revenues of $34.7 million

Net Quarterly Income of $6.4 million, exceeding the quarterly guidance

REHOVOT, Israel, April 30, 2014 /PRNewswire/ -- Nova Measuring Instruments Ltd. (NASDAQ: NVMI), a leading innovator and a key provider of optical metrology solutions for advanced process control used in semiconductor manufacturing, today reported record revenues for 2014 first quarter.

Business Highlights:

  • Continued systems delivery to leading customers for 20nm ramp up and 16/14nm pilot lines
  • T600 Standalone tool accepted for high volume manufacturing for Etch process for 20nm & 16nm at major foundry customer
  • Ongoing evaluations for 10nm technology
  • Ongoing evaluations at memory customers for VNAND and TSV applications
  • SW products gaining traction with a first order for Hybrid Metrology software solution

Financial Highlights:

  • Quarterly revenues of $34.7 million, up 26% from $27.4 million a year ago
  • Quarterly gross margin of 51%, compared with 54% a year ago
  • Net Income of $6.4 million, up 167% from $2.4 million a year ago
  • Research & Development expense of $6.9 million, down from $7.5 million a year ago
  • Total cash reserves of $113.2 million as of March 31, 2014, and no debt

GAAP Results ($K)


Q1 2014

Q4 2013

Q1 2013

Revenues

$34,660

$30,189

$27,425

Net Income

$6,398

$3,077

$2,395

Earnings per Diluted Share

$0.23

$0.11

$0.09

NON-GAAP Results ($K)


Q1 2014

Q4 2013

Q1 2013

Net Income

$6,929

$4,055

$3,589

Earnings per Diluted Share

$0.25

$0.15

$0.13

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 adjustments of deferred tax assets and stock based compensation expenses.

Management Comments

"We posted record sales revenue for the first quarter, meeting the high end of our quarterly revenue guidance, due to market share gains and strong demand for our Optical Metrology solutions. Moreover, our net income significantly increased and exceeded our quarterly guidance," commented Eitan Oppenhaim, President and CEO of Nova. "Our recent R&D investments, which were aimed at enhancing and diversifying our products offering, are clearly paying off and have established us as a leader in Optical Metrology for advanced process control."

"The use of Optical Metrology is expanding rapidly as the semiconductor industry continues its challenging technical transition to advanced 3D structures, thus broadening the opportunity available to us, as we continue to increase our market share and expand our presence. Following our recent efforts and extensive customer evaluations we started to receive orders for our newly introduced software products. We view these orders as clear evidence that our strategic decision to add software products to our offering is paying off, and is supporting the profitability leverage built into our business model."

First Quarter 2014 Results

Total revenues for the first quarter of 2014 were $34.7 million, an increase of 26% relative to the first quarter of 2013, and an increase of 15% relative to the fourth quarter of 2013.

Gross margin for the first quarter of 2014 was 51%, compared with 54% in the first quarter of 2013 and 53% in the fourth quarter of 2013.

Operating expenses in the first quarter of 2014 were $11.4 million, compared with $11.8 million in the first quarter of 2013 and $12.0 million in the fourth quarter of 2013.

On a GAAP basis, the company reported net income of $6.4 million, or $0.23 per diluted share, in the first quarter of 2014. This compares to a net income of $2.4 million, or $0.09 per diluted share, in the first quarter of 2013, and a net income of $3.1 million, or $0.11 per diluted share, in the fourth quarter of 2013.

On a Non-GAAP basis, which excludes deferred income tax expenses and stock based compensation expenses, the company reported net income of $6.9 million, or $0.25 per diluted share, in the first quarter of 2014. This compares to a net income of $3.6 million, or $0.13 per diluted share, in the first quarter of 2013, and a net income of $4.1 million, or $0.15 per diluted share, in the fourth quarter of 2013.

Conference Call Information

Nova will host a conference call on Wednesday, April 30, 2014 at 8:30 a.m. Eastern Time, to discuss the first quarter results and future outlook, along with its guidance for the second quarter of 2014.

To attend the conference call, please dial one of the following teleconferencing numbers. Please begin by placing your calls 5 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. Dial-in Number:  1-877-941-1427
ISRAEL Dial-in Number:  1809-21-4368
INTERNATIONAL Dial-in Number:  1-480-629-9664

At:

8:30 a.m. Eastern Time
5:30 a.m. Pacific Time
3:30 p.m. Israeli Time

The conference call will also be webcast live from a link on Nova's website at http://ir.novameasuring.com. For those unable to participate in the conference call, there will be a replay available from a link on Nova's website at http://ir.novameasuring.com.

About Nova: Nova Measuring Instruments Ltd. develops, produces and markets advanced Optical CD 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 and deferred income tax expenses 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 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; our dependency on a small number of large customers and small number of suppliers; 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; 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 the extremely competitive market we are operation in;  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; new product offerings from our competitors; 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, 2013 filed with the Securities and Exchange Commission on February 28, 2014. 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
March 31,


As of

December 31,



2014


2013







CURRENT ASSETS






    Cash and cash equivalents


21,026



17,542

Short-term interest-bearing bank deposits


89,593



79,552

Available for sale securities


1,844



1,845

Trade accounts receivable


22,206



27,947

Inventories


19,418



18,118

Deferred income tax assets


128



137

Other current assets


4,360



3,922



158,575



149,063

LONG-TERM ASSETS






Long-term interest-bearing bank deposits


750



750

Other long-term assets


206



230

Severance pay funds


1,802



1,852



2,758



2,832







FIXED ASSETS, NET


10,065



10,382







TOTAL ASSETS


171,398



162,277







CURRENT LIABILITIES






Trade accounts payable


14,551



15,599

Deferred income


4,355



3,420

Other current liabilities


12,665



11,448



31,571



30,467







LONG-TERM LIABILITIES






Liability for employee severance pay


2,723



2,798

Deferred income


489



341

Other long-term liability


6



7



3,218



3,146







SHAREHOLDERS' EQUITY


136,609



128,664







TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


171,398



162,277

 

NOVA MEASURING INSTRUMENTS LTD.
QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except per share data)














Three months ended



March 31,
2014


December 31,

2013


March 31,

 2013















REVENUES







Products


28,776


24,739


22,341

Services


5,884


5,450


5,084



34,660


30,189


27,425








COST OF REVENUES







Products


12,797


10,299


9,079

Services


4,140


4,018


3,580



16,937


14,317


12,659








GROSS PROFIT


17,723


15,872


14,766








OPERATING EXPENSES







Research and Development expenses, net


6,901


7,491


7,499

Sales and Marketing expenses


3,406


3,128


3,224

General and Administration expenses


1,064


1,350


1,119



11,371


11,969


11,842








OPERATING PROFIT


6,352


3,903


2,924








INTEREST INCOME, NET


175


60


130








INCOME BEFORE INCOME TAXES


6,527


3,963


3,054








    INCOME TAX EXPENSES


129


886


659








NET INCOME FOR THE PERIOD


6,398


3,077


2,395






















Earnings per share:







       Basic


0.23


0.11


0.09

       Diluted


0.23


0.11


0.09








 

Shares used for calculation of earnings per share:








       Basic


27,432


27,268


26,854

       Diluted


27,890


27,548


27,261











 


NOVA MEASURING INSTRUMENTS LTD.
QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)












Three months ended


March 31,

2014


December 31,

2013


March 31,

2013







CASH FLOW – OPERATING ACTIVITIES












Net income for the period

6,398


3,077


2,395

 

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












       Depreciation and amortization

902


945


824

       Amortization of deferred stock-based compensation

522


518


585

       Decrease in liability for employee termination benefits, net

(26)


(37)


(11)

       Deferred income taxes

9


460


609

       Decrease (increase) in trade accounts receivables

5,741


(7,118)


(1,643)

       Increase in inventories

(1,360)


(1,950)


(560)

       Increase in other current and long term Assets

(717)


(291)


(720)

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

 

(1,049)


 

4,489


 

(75)

       Increase in other current liabilities

1,233


1,600


1,344

       Increase (decrease) in short and long term

          deferred income

1,083


(234)


61

Net cash provided by operating activities

12,736


1,459


2,809







CASH FLOW – INVESTMENT ACTIVITIES












Decrease (increase) in short-term interest-bearing

     bank deposits

 

(10,041)


 

4,367


 

1,985

Increase in long-term interest-bearing bank deposits

-


(345)


-

Investment in short-term available for sale securities

1


(1,845)


-

Additions to fixed assets

(525)


(1,974)


(342)

     Net cash provided by (used in) investment activities

(10,565)


203


1,643







CASH FLOW – FINANCING ACTIVITIES












Shares issued under employee share-based plans

1,313


123


457

Net cash provided by financing activities

1,313


123


457







Increase in cash and cash equivalents

3,484


1,785


4,909

Cash and cash equivalents – beginning of period

17,542


15,757


15,963

Cash and cash equivalents – end of period

21,026


17,542


20,872









 

DISCLOSURE OF NON-GAAP NET INCOME
(U.S. dollars in thousands, except per share data)








Three months ended


March 31,


December 31,


March 31,


2014


2013


2013







GAAP Net income for the period

6,398


3,077


2,395







NON-GAAP Adjustments:






Stock based compensation expenses

522


518


585

Deferred income tax expenses

9


460


609







NON-GAAP Net income for the period

6,929


4,055


3,589







NON-GAAP Net income per share:






Basic

0.25


0.15


0.13

Diluted

0.25


0.15


0.13







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






Basic

27,432


27,268


26,854

Diluted

27,890


27,548


27,261







 

Company Contact:



Investor Relations Contacts:

Dror David, Chief Financial Officer



Hayden/ MS-IR LLC

Nova Measuring Instruments Ltd.



Miri Segal

Tel: +972-73-229-5833



Tel: +917-607-8654

E-mail: info@novameasuring.com



E-mail: msegal@ms-ir.com

www.novameasuring.com 



Or




David Fore




Tel: +206-395-2711




E-mail: dave@haydenir.com

SOURCE Nova Measuring Instruments Ltd.



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