Nova Announces 2012 Third Quarter Results
REHOVOT, Israel, October 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 third quarter results.
Highlights for the Third Quarter of 2012
- Quarterly revenues of $24.4 million
- Blended gross margin of 53%
- GAAP Net income of $2.9 million, or $0.11 per diluted share
- Non-GAAP Net income of $3.7 million, or $0.14 per diluted share
- Positive cash flow from operations of $4.3 million
Management Comments
"Revenues for the third quarter were in line with our expectations, and continue to reflect our exposure to market segments where demand is highest," said Gabi Seligsohn, President and CEO of Nova. "Earnings per share exceeded the high end of our guidance, due to tighter expense control in light of recent market conditions. We are following our plan to prudently increase our research and development commitment in order to execute on next generation projects and remain in the forefront of our sector. In the current environment, we are being especially selective in adding resources, which is causing the ramp in expenses to be slightly slower than originally anticipated.
"We were very pleased to announce multiple orders from multiple customers for our recently announced new product, the Nova V2600. We are in the process of adding a few additional customers and expect this product to gain significant momentum as the industry transitions to high volume manufacturing using 3D interconnect technology.
"Recent booking trends have exhibited softness in both the memory and foundry segments. Nevertheless, we believe there is a seasonal element to the order pattern and we expect to see foundry momentum resume and continue well into 2013. Recent checks with our customers confirm that there is a need for additional foundry capacity and yield improvements at 28nm and that plans are in place to initiate a ramp up in the 20nm technology node. We believe that during these technology transitions, optical metrology will continue to account for a higher share of overall capital expenditures, as foundries cope with the challenges of process complexity and yield requirements at the advanced nodes."
2012 Fourth Quarter Guidance
For the fourth quarter of 2012, management expects revenues of $18.5-$22.0 million, with GAAP diluted earnings per share of $0.01-$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 $0.00-$0.08 for the fourth quarter of 2012.
2012 Third Quarter Results
Total revenues for the third quarter of 2012 were $24.4 million, a decrease of 5% relative to the third quarter of 2011, and a decrease of 10% relative to the second quarter of 2012.
Gross margin for the third quarter of 2012 was 53%, compared with 55% in the third quarter of 2011 and 54% in the second quarter of 2012.
Operating expenses in the third quarter of 2012 were $9.9 million, compared with $8.4 million in the third quarter of 2011 and $9.9 million in the second quarter of 2012.
On a GAAP basis, the company reported net income of $2.9 million, or $0.11 per diluted share, in the third quarter of 2012. This compares to a net income of $5.9 million, or $0.22 per diluted share, in the third quarter of 2011, and a net income of $3.7 million, or $0.14 per diluted share, in the second 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 $3.7 million, or $0.14 per diluted share, in the third quarter of 2012. This compares to a net income of $6.4 million, or $0.23 per diluted share, in the third quarter of 2011, and a net income of $5.4 million, or $0.20 per diluted share, in the second quarter of 2012.
Total cash reserves at the end of the third quarter of 2012 were $94.0 million.
The Company will host a conference call today, October 31, 2012, at 10:00am ET. To participate, please dial in the US: 1 877 249 9037; or internationally: +972 3 763 0145 or 1 646 254 3361. 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 September 30, As of December 31,
2012 2011
CURRENT ASSETS
Cash and cash equivalents 34,972 18,716
Short-term interest-bearing bank deposits 56,929 66,247
Held to maturity securities 1,554 1,582
Trade accounts receivable 14,901 13,402
Inventories 19,434 9,608
Deferred income tax assets -- 2,500
Other current assets 2,227 1,173
130,017 113,228
LONG-TERM ASSETS
Long-term interest-bearing bank deposits 545 545
Other long-term assets 319 291
Severance pay funds 3,086 2,885
3,950 3,721
FIXED ASSETS, NET 7,051 5,998
TOTAL ASSETS 141,018 122,947
CURRENT LIABILITIES
Trade accounts payable 13,209 8,305
Deferred income 4,065 2,172
Other current liabilities 7,912 8,082
25,186 18,559
LONG-TERM LIABILITIES
Liability for employee severance pay 3,973 3,851
Deferred income 662 611
Other long-term liability 8 20
4,643 4,482
SHAREHOLDERS' EQUITY 111,189 99,906
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY 141,018 122,947
NOVA MEASURING INSTRUMENTS LTD.
QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except per share data)
Three months ended
September 30, June 30, September 30,
2012 2012 2011
REVENUES
Products 19,359 22,070 21,382
Services 5,059 4,980 4,438
24,418 27,050 25,820
COST OF REVENUES
Products 7,999 9,150 8,921
Services 3,483 3,324 2,782
11,482 12,474 11,703
GROSS PROFIT 12,936 14,576 14,117
OPERATING EXPENSES
Research and Development
expenses, net 6,003 5,893 4,627
Sales and Marketing expenses 2,967 3,048 2,933
General and Administration
expenses 973 972 809
9,943 9,913 8,369
OPERATING PROFIT 2,993 4,663 5,748
INTEREST INCOME, NET 283 339 189
INCOME BEFORE INCOME TAXES 3,276 5,002 5,937
INCOME TAX EXPENSES 381 1,278 --
NET INCOME FOR THE PERIOD 2,895 3,724 5,937
Earnings per share:
Basic 0.11 0.14 0.23
Diluted 0.11 0.14 0.22
Shares used for calculation of earnings
per share:
Basic 26,646 26,610 26,334
Diluted 27,485 27,299 27,079
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, September 30,
2012 2011
REVENUES
Product sales 60,196 70,289
Services 13,874 13,347
74,070 83,636
COST OF REVENUES
Product sales 24,344 27,817
Services 9,636 8,350
33,980 36,167
GROSS PROFIT 40,090 47,469
OPERATING EXPENSES
Research & Development expenses, net 17,477 14,110
Sales & Marketing expenses 8,896 8,422
General & Administration expenses 2,787 2,483
29,160 25,015
OPERATING PROFIT 10,930 22,454
INTEREST INCOME, NET
1,031 694
INCOME BEFORE INCOME TAXES
11,961 23,148
INCOME TAX EXPENSES 2,605 --
NET INCOME FOR THE PERIOD 9,356 23,148
Net income per share:
Basic 0.35 0.88
Diluted 0.34 0.86
Shares used for calculation of net
income per share:
Basic 26,598 26,182
Diluted 27,260 27,010
NOVA MEASURING INSTRUMENTS LTD.
QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
Three months ended
September 30, June 30, September 30,
2012 2012 2011
CASH FLOW - OPERATING ACTIVITIES
Net income for the period 2,895 3,724 5,937
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 771 577 420
Amortization of deferred
stock-based compensation 489 409 421
Decrease in liability for
employee termination benefits, net (80) (41) (94)
Deferred income taxes 349 1,241 -
Decrease in trade accounts
receivables 2,619 971 7,554
Decrease (increase) in
inventories (3,770) (3,282) 1,499
Decrease (increase) in other
current and long term assets (64) (122) 726
Increase (decrease) in trade
accounts payables and other
long-term liabilities (5) 1,170 (3,967)
Increase (decrease) in other
current liabilities 485 (375) (642)
Increase (decrease) in short
and long term deferred income 572 212 (5,966)
Net cash provided by operating
activities 4,261 4,484 5,888
CASH FLOW - INVESTMENT ACTIVITIES
Decrease (increase) in
short-term interest-bearing
bank deposits 11,100 (10,150) (9,000)
Proceeds from (investments in)
short-term held to
maturity securities (5) 87 86
Additions to fixed assets (896) (679) (460)
Net cash provided by (used in)
investment activities 10,199 (10,742) (9,374)
CASH FLOW - FINANCING ACTIVITIES
Shares issued under employee
share-based plans 104 72 104
Net cash provided by financing
activities 104 72 104
Increase (decrease) in cash and
cash equivalents 14,564 (6,186) (3,382)
Cash and cash equivalents -
beginning of period 20,408 26,594 11,064
Cash and cash equivalents - end
of period 34,972 20,408 7,682
NOVA MEASURING INSTRUMENTS LTD.
YEAR TO DATE CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
Nine-months ended
September 30, September 30,
2012 2011
CASH FLOW - OPERATING ACTIVITIES
Net income for the period 9,356 23,148
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 1,925 1,159
Amortization of deferred stock-based
compensation 1,318 959
Increase (decrease) in liability for
employee termination benefits, net (131) 103
Deferred income taxes 2,500 --
Increase in trade accounts receivables (1,499) 1,041
Increase in inventories (10,656) (2,010)
Increase in other current and long term
assets (717) (390)
Increase (decrease) in trade accounts
payables and other long term liabilities 4,902 (1,971)
Decrease in other current liabilities (131) (466)
Increase (decrease) in short and long term
deferred income 1,944 (327)
Net cash provided by operating activities 8,811 21,246
CASH FLOW - INVESTMENT ACTIVITIES
Decrease (increase) in short-term
interest-bearing bank deposits 9,318 (38,729)
Proceeds from (investments in) short-term
held to maturity securities 28 (1,100)
Additions to fixed assets (2,148) (1,675)
Net cash used in investment activities 7,198 (41,504)
CASH FLOW - FINANCING ACTIVITIES
Shares issued under employee share-based
plans 247 2,546
Net cash provided by financing activities 247 2,546
Increase (decrease) in cash and cash
equivalents 16,256 (17,712)
Cash and cash equivalents - beginning of
period 18,716 25,394
Cash and cash equivalents - end of period 34,972 7,682
DISCLOSURE OF NON-GAAP NET INCOME
(U.S. dollars in thousands, except per share data)
Three months ended
September 30, June 30, September 30,
2012 2012 2011
GAAP Net income for the period 2,895 3,724 5,937
Non-GAAP Adjustments:
Stock based compensation expenses 489 409 421
Deferred income taxes expenses 349 1,241 --
Non-GAAP Net income for the period 3,733 5,374 6,358
Non-GAAP Net income per share:
Basic 0.14 0.20 0.24
Diluted 0.14 0.20 0.23
Shares used for calculation of
Non-GAAP net income per share:
Basic 26,646 26,610 26,334
Diluted 27,485 27,299 27,079
Nine-months ended
September 30, September 30,
2012 2011
GAAP Net income for the period 9,356 23,148
Non-GAAP Adjustments:
Stock based compensation expenses 1,318 959
Deferred income taxes expenses 2,500 --
Non-GAAP Net income for the period 13,174 24,107
Non-GAAP Net income per share:
Basic 0.50 0.92
Diluted 0.49 0.89
Shares used for calculation of Non-GAAP net
income per share:
Basic 26,598 26,182
Diluted 27,260 27,010
Company Contact:
Dror David, Chief Financial Officer
Nova Measuring Instruments Ltd.
Tel: +972-73-229-5833
E-mail: [email protected]
http://www.nova.co.il
Investor Relations Contacts:
Ehud Helft / Kenny Green
CCG Investor Relations
Tel: +1-646-201-9246
E-mail: [email protected]
SOURCE Nova Measuring Instruments Ltd
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