Nova Announces Record 2014 First Quarter

Record Quarterly Revenues of $34.7 million

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

Apr 30, 2014, 05:15 ET from Nova Measuring Instruments Ltd.

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.



RELATED LINKS

http://www.novameasuring.com