Nova Announces 2011 Second Quarter Results

Aug 02, 2011, 04:30 ET from Nova Measuring Instruments Ltd

REHOVOT, Israel, August 2, 2011 /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 2011 second quarter results.

Highlights for the Second Quarter of 2011

  • Quarterly revenues of $29.6 million, up 53% year over year
  • Gross margin of 58%; Record services gross margin of 39%
  • Net margin of 31%
  • Record quarterly net income of $9.1 million, or $0.34 per diluted share
  • Positive cash flow from operating activities of $7 million
  • Total cash reserves of $78.2 million

Management Comments

"Second quarter results continued to demonstrate strong financial performance," said Gabi Seligsohn, President and CEO of Nova. "We set all-time records in revenues and earnings, with margins well above our long-term targets, and we generated significant operating cash flow."

"During recent quarters we utilized our significant operating leverage and made investments into the development of new products and capabilities. Last month we were pleased to announce two new ground breaking products for the Optical CD metrology market. These products, which are already shipping to leading customers, position us well to further strengthen our position and expand our footprint in this market. Furthermore, we are progressing well with our plan to penetrate the 3D interconnect market and have recently concluded the development of the first phase of this product. We have already received excellent customer feedback to the tool capabilities and expect to ship initial evaluation units during the second half of this year".  

"Industry-wide, the pace of business began to slow somewhat in the second quarter, after extremely aggressive capital spending early in the first half of the year. Given the continued strong end market demand, we believe this is a mid cycle correction related to absorption and inventory realignment, which should result in lower revenues during the second half of 2011".  

"Looking forward, we expect the continuous growth in consumer demand for high-performance mobile devices to continue to drive spending, and we believe we are particularly well-positioned to benefit from the resumption of the uptrend. We have recently introduced innovative new products that will be crucial to our foundry and memory customers as they strive to enable smaller footprints and lower power consumption via advanced nodes and complex structures below 22nm."

2011 Third Quarter Guidance

For the third quarter of 2011, management expects revenues of $24-$27 million, with net profitability of 20%-25%.

2011 Second Quarter Results

Total revenues for the second quarter of 2011 were $29.6 million, an increase of 52.5% relative to the second quarter of 2010, and an increase of 5.2% relative to the first quarter of 2011.

Gross margin for the second quarter of 2011 was 57.7%, compared with 53.6% in the second quarter of 2010 and 57.6% in the first quarter of 2011.

Operating expenses in the second quarter of 2011 were $8.2 million, compared with $5.8 million in the second quarter of 2010 and $8.4 million in the first quarter of 2011.

The company reported net income of $9.1 million, or $0.34 per diluted share, in the second quarter of 2011. This compares to a net income of $4.7 million, or $0.18 per diluted share, in the second quarter of 2010, and a net income of $8.1 million, or $0.30 per diluted share, in the first quarter of 2011.

The company generated $7.0 million in cash from operating activities during the second quarter of 2011. Total cash reserves at the end of the second quarter of 2011 were $78.2 million.

The Company will host a conference call today, August 2, 2011, at 9:00am ET. To participate, please dial in the US: 1 888 935 4575; or internationally: +972-3-721 9509. 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 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; 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 31,2010 filed with the Securities and Exchange Commission on March 30, 2011. 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 June 30,   As of December 31,
                                                 2011              2010

    CURRENT ASSETS
    Cash and cash equivalents                  11,064            25,394
    Short-term interest-bearing bank
    deposits                                   65,291            35,562
    Held to maturity securities                 1,186              --
    Trade accounts receivable                  19,675            13,162
    Inventories                                13,607            10,849
    Other current assets                        2,755             1,736
                                              113,578            86,703
    LONG-TERM ASSETS
    Long-term interest-bearing bank
    deposits                                      631               631
    Other Long-term assets                        306               163
    Severance pay funds                         3,138             2,786
                                                4,075             3,580

    FIXED ASSETS, NET                           4,321             3,094

    Total assets                              121,974            93,377

    CURRENT LIABILITIES
    Trade accounts payable                     11,954             9,956
    Deferred income                             8,997             3,397
    Other current liabilities                   8,089             7,908
                                               29,040            21,261

    LONG-TERM LIABILITIES
    Liability for employee severance pay        4,258             3,709
    Deferred income                                39                 -
    Other long-term liability                      16                23
                                                4,313             3,732

    SHAREHOLDERS' EQUITY                       88,621            68,384

    Total liabilities and shareholders'
    equity                                    121,974            93,377



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,

                                            2011         2011          2010

    REVENUES
    Product sales                         24,989       23,918        15,889
    Services                               4,658        4,251         3,551
                                          29,647       28,169        19,440

    COST OF REVENUES
    Products                               9,698        9,198         6,554
    Services                               2,833        2,735         2,452
                                          12,531       11,933         9,006

    GROSS PROFIT                          17,116       16,236        10,434

    OPERATING EXPENSES
    Research & Development expenses,
    net                                    4,516        4,967         2,828
    Sales & Marketing expenses             2,778        2,711         2,242
    General & Administration expenses        945          729           679
                                           8,239        8,407         5,749

    OPERATING PROFIT                       8,877        7,829         4,685

    INTEREST INCOME, NET                     286          219            24

    NET INCOME FOR THE PERIOD              9,163        8,048         4,709

    Net income per share:
    Basic                                   0.35         0.31          0.19
    Diluted                                 0.34         0.30          0.18

    Shares used for calculation of net
    income

    per share:
    Basic                                 26,250       25,960        24,808
    Diluted                               27,176       27,020        26,406
 


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, 2011 June 30, 2010

    REVENUES
    Product sales                                     48,907        28,790
    Services                                           8,909         6,631
                                                      57,816        35,421

    COST OF REVENUES
    Product sales                                     18,896        12,032
    Services                                           5,568         4,841
                                                      24,464        16,873

    GROSS PROFIT                                      33,352        18,548

    OPERATING EXPENSES
    Research & Development expenses, net               9,483         5,382
    Sales & Marketing expenses                         5,489         4,438
    General & Administration expenses                  1,674         1,330
                                                      16,646        11,150

    OPERATING PROFIT                                  16,706         7,398

    INTEREST INCOME, NET                                 505            10

    NET INCOME FOR THE PERIOD                         17,211         7,408

    Net income per share:
    Basic                                               0.66          0.31
    Diluted                                             0.64          0.29

    Shares used for calculation of net income per
    share:
    Basic                                             26,105        23,721
    Diluted                                           27,014        25,226



NOVA MEASURING INSTRUMENTS LTD.

QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)

                                                Three months ended
                                           June 30,  March 31,     June 30,

                                             2011       2011         2010
    CASH FLOW - OPERATING ACTIVITIES

    Net income for the period               9,163      8,048        4,709

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

    Depreciation and amortization             377        362          323
    Amortization of deferred stock-based
    compensation                              272        266          122
    Increase (decrease) in liability for
    employee termination benefits, net        203         (6)         105

    Decrease (increase) in trade accounts
    receivables                            (4,835)    (1,678)          67
    Increase in inventories                (2,240)    (1,269)      (1,855)
    Increase in other short and long term
    assets                                    (33)    (1,083)        (388)
    Increase in trade accounts payables
    and other long term liabilities          (667)     2,663          289
    Increase (decrease) in other current
    liabilities                              (502)       678        1,130
    Increase in short and long term
    deferred income                         5,266        373        1,769
    Net cash provided by operating
    activities                              7,004      8,354        6,271

    CASH FLOW - INVESTMENT ACTIVITIES

    Increase in short-term
    interest-bearing bank deposits         (9,426)   (20,303)     (10,701)
    Increase in short term held to
    maturity securities                    (1,186)        --           --
    Additions to fixed assets                (539)      (676)        (307)
    Net cash used in investment
    activities                            (11,151)   (20,979)     (11,008)

    CASH FLOW - FINANCING ACTIVITIES

    Shares issued under employee
    share-based plans and
    exercise of warrants                      225      2,217           51
    Net cash provided by financing
    activities                                225      2,217           51

    Decrease in cash and cash equivalents  (3,922)   (10,408)      (4,686)
    Cash and cash equivalents - beginning
    of period                              14,986     25,394       11,524
    Cash and cash equivalents - end of
    period                                 11,064     14,986        6,838


NOVA MEASURING INSTRUMENTS LTD.

YEAR TO DATE CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)

                                                        Six months ended
                                                  June 30, 2011 June 30, 2010
    CASH FLOW - OPERATING ACTIVITIES

    Net income for the period                         17,211         7,408

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

    Depreciation and amortization                        739           647
    Amortization of deferred stock-based
    compensation                                         538           238
    Increase in liability for employee termination
    benefits, net                                        197           153

    Decrease (increase) in trade accounts
    receivables                                       (6,513)          692
    Increase in inventories                           (3,509)       (4,122)
    Increase in other current and long term assets    (1,116)         (648)
    Increase in trade accounts payables and other
    long term liabilities                              1,996         2,834
    Increase in current liabilities                      176            25
    Increase in short and long term deferred
    income                                             5,639         4,017
    Net cash provided by operating activities         15,358        11,244

    CASH FLOW - INVESTMENT ACTIVITIES

    Increase in short-term interest-bearing bank
    deposits                                         (29,729)      (30,687)
    Investment in short term held to maturity
    securities                                        (1,186)           --
    Investment in long-term deposits                      --            (9)
    Additions to fixed assets                         (1,215)         (712)
    Net cash used in investment activities           (32,130)      (31,408)

    CASH FLOW - FINANCING ACTIVITIES

    Shares issued under employee share-based plans     2,442           173
    Shares issued in public offering                      --        16,968
    Net cash provided by financing activities          2,442        17,141

    Decrease in cash and cash equivalents            (14,330)       (3,023)
    Cash and cash equivalents - beginning of
    period                                            25,394         9,861
    Cash and cash equivalents - end of period         11,064         6,838


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