Nova Announces 2015 Full-Year Results

Record Annual Revenues of $148.5 million

Annual Non-GAAP Net Income of $21.0 million

Feb 17, 2016, 16:01 ET from Nova Measuring Instruments Ltd.

REHOVOT, Israel, Feb. 17, 2016 /PRNewswire/ -- Nova Measuring Instruments (Nasdaq: NVMI), a leading innovator and a key provider of metrology solutions for advanced process control used in semiconductor manufacturing, today reported record 2015 full-year results. The company closed the acquisition of ReVera on April 2, 2015. Accordingly, the company's fourth quarter and annual results include the contribution of ReVera, with no similar contribution in some of the previous periods.

Fourth Quarter 2015 Highlights:

  • Revenues of $40.0 million, at the high end of the guidance ($37-$41 million)
  • Non-GAAP net income of $5.3 million, or $0.19 per diluted share, at the high end of guidance ($0.11-$0.20 per diluted share)
  • Diversified customer mix yielded four customers contributing more than 10% each to the quarterly revenues, including one leading memory customer
  • Selected by the world's leading foundry to deliver Optical and X-ray metrology solutions for multiple process steps at 10/7/5nm technology nodes

Full Year 2015 Highlights:

  • Record full-year revenues of $148.5 million
  • Non-GAAP net income of $21.0 million, or $0.76 per diluted share
  • Five customers contributed 10% or more to annual product revenues, compared to only two in 2014 
  • Product revenues from the Memory segment grew to 30% of annual product revenues, compared to only 15% in 2014
  • Growing customers' adoption of Nova's software solutions generated 104% increase in annual software revenues
  • Creating a unique offering with the successful integration of ReVera

 

GAAP Results ($K)

Q4 2015

Q3 2015

Q4 2014

FY 2015

FY 2014

Revenues

$40,022

$40,446

$25,823

$148,514

$120,618

Net Income

$5,161

$5,437

$3,291

$15,725

$18,652

Earnings per Diluted Share

$0.19

$0.20

$0.12

$0.57

$0.67

NON-GAAP Results ($K)

Q4 2015

Q3 2015

Q4 2014

FY 2015

FY 2014

Net Income

$5,278

$6,316

$2,259

$21,030

$19,150

Earnings per Diluted Share

$0.19

$0.23

$0.08

$0.76

$0.69

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 amortization of acquired intangible assets, deferred tax assets adjustments (net), stock-based compensation expenses and acquisition related expenses.

Management Comments

"The fourth quarter results represent a strong finish to a record year, with revenues and net income at the high end of our guidance," commented Eitan Oppenhaim, President and Chief Executive Officer of Nova. "Our annual achievements demonstrate once again our ability to execute upon our strategic initiatives, while improving our products and customers diversification and maintaining a solid operational model. Today, Nova's industry leading position is supported by a growing base of customers that are embracing our ability to deliver best-in-class optical and x-ray suit of products, augmented by advanced software and modeling solutions. With these solid results, we are well positioned to win more opportunities in the market, setting the stage for Nova's continued growth in the coming years."

2016 First Quarter Financial Outlook

Management provided an outlook for the first quarter, the period ending March 31, 2016.

Based on current estimates, management expects:

  • $33 million to $37 million in revenue
  • $0.10 to $0.17 in diluted non-GAAP EPS
  • $0.06 to $0.11 in diluted GAAP EPS

2015 Fourth Quarter Results

Total revenues for the fourth quarter of 2015 were $40.0 million, decrease of 1% compared to the third quarter of 2015, and an increase of 55% relative to the fourth quarter of 2014.

Gross margin for the fourth quarter of 2015 was 52%, and included $1.1 million of amortization of acquired intangible assets in cost of product. This is compared with 56% in the third quarter of 2015 and compared with 52% in the fourth quarter of 2014.

Operating expenses in the fourth quarter of 2015 were $17.3 million, and included $0.4 million of amortization of acquired intangible assets. This is compared with $17.4 million in the third quarter of 2015 and compared to $11.9 million in the fourth quarter of 2014.

On a GAAP basis, the company reported net income of $5.2 million, or $0.19 per diluted share, in the fourth quarter of 2015. This is compared with net income of $5.4 million, or $0.20 per diluted share, in the third quarter of 2015. The company reported net income of $3.3 million, or $0.12 per diluted share, in the fourth quarter of 2014.

On a Non-GAAP basis, which excludes amortization of acquired intangible assets, adjustments of deferred tax assets and stock-based compensation expenses, the company reported net income of $5.3 million, or $0.19 per diluted share, in the fourth quarter of 2015. This is compared net income of $6.3 million, or $0.23 per diluted share, in the third quarter of 2015 and to net income of $2.3 million, or $0.08 per diluted share, in the fourth quarter of 2014.

2015 Full Year Results

Total revenues for 2015 were $148.5 million, an increase of 23% compared to total revenues of $120.6 million for 2014.

Gross margin in 2015 was 52%, and included $3.5 million of amortization of acquired intangible assets in cost of product. This is compared with gross margin of 53% in 2014.

Operating expenses in 2015 were $65.5 million, and included $2.7 million of acquisition related expenses and $1.5 million of amortization of acquired intangible assets. This is compared with operating expenses of $46.7 in 2014.

On a GAAP basis, the company reported net income of $15.7 million, or $0.57 per diluted share, in 2015. This is compared with net income of $18.7 million, or $0.67 per diluted share, in 2014.

On a Non-GAAP basis, which excludes amortization of acquired intangible assets, adjustments of deferred tax assets, stock-based compensation expenses and acquisition related expenses, the company reported net income of $21.0 million, or $0.76 per diluted share, in 2015. This is compared with net income of $19.2 million, or $0.69 per diluted share, in 2014.

Total cash reserves at the end of 2015 were $97.8 million, compared to $123.7 million at the end of 2014.

Conference Call Information

Nova will host a conference call on Wednesday, February 17, 2016 at 4:30 p.m. Eastern Time, to discuss the fourth quarter results and future outlook.

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:  1-888-401-4668 ISRAEL Dial-in Number:  1 80 924 5906 INTERNATIONAL Dial-in Number:  1-719-457-2083

At:

4:30 p.m. Eastern Time 1:30 p.m. Pacific Time 11:30 p.m. Israeli Time

Please reference conference ID 2897451

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. delivers continuous innovation by providing advanced metrology solutions for the semiconductor manufacturing industry. Deployed with the world's largest integrated-circuit manufacturers, Nova's products deliver state-of-the-art, high-performance metrology solutions for effective process control throughout the semiconductor fabrication lifecycle. Nova's product portfolio, which combines high-precision hardware and cutting-edge software, supports the development and production of the most advanced devices in today's high-end semiconductor market. Nova's technical innovation and market leadership enable customers to improve process performance, enhance products' yields and accelerate time to market. Nova acts as a partner to semiconductor manufacturers from its offices around the world. Additional information may be found at www.novameasuring.com.

Nova is traded on the NASDAQ & TASE under the symbol NVMI.

This press release provides financial measures that exclude non-cash charges for amortization of acquired intangible assets, deferred tax assets adjustments (net), stock-based compensation expenses and acquisition related 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, but are not limited to, anticipated growth opportunities and projections about our business and its future revenues, expenses 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. Factors that may affect our results, performance, circumstances or achievements include, but are not limited to, the following: our dependency on three product lines; our dependency on a small number of large customers and small number of suppliers; the highly cyclical and competitive nature of the markets we target and we operate in; 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 ability to recognize the benefits of ReVera acquisition and risks that the acquisition may disrupt current plans and operations and impact relationships with customers, distributors and suppliers; our dependency on PEMs; 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 our manufacturing facilities; risks related to changes in our order backlog; risks related to the worldwide financial instabilities; 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, risks related to acquisitions we may pursue 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, 2014 filed with the Securities and Exchange Commission on February 25, 2015. 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.

Company Contact:

Investor Relations Contacts:

Dror David, Chief Financial Officer

Hayden/ MS-IR LLC

Nova Measuring Instruments Ltd.

Miri Segal

Tel: +972-73-229-5760

Tel: +917-607-8654

E-mail: info@novameasuring.com

E-mail: msegal@ms-ir.com

www.novameasuring.com 

Or

Brett Maas

Tel: +646-536-7331

E-mail: brett@haydenir.com

 

 

NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands) - (Unaudited)

      As of  December 31,

ASSETS

2015

2014

(Audited)

Current assets

Cash and cash equivalents

27,733

13,649

Short-term interest-bearing bank deposits

69,298

107,289

Held for trading securities

-

1,995

Trade accounts receivable

19,046

15,566

Inventories

27,683

16,107

Deferred tax assets

3,540

142

Other current assets

2,888

3,097

Total current assets

150,188

157,845

Long-term assets

Long-term interest-bearing bank deposits

750

750

Deferred tax assets

5,735

1,654

Severance pay funds

1,514

1,580

Property and equipment, net

11,062

11,450

Identifiable intangible assets, net

17,906

-

Goodwill

20,114

-

Total long-term assets

57,081

15,434

Total assets

207,269

173,279

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities

Trade accounts payable

14,378

11,568

Deferred revenues

5,828

3,022

Deferred tax liabilities

956

-

Other current liabilities

15,996

12,606

Total current liabilities

37,158

27,196

Long-term liabilities

Deferred tax liabilities

5,760

-

Liability for employee severance pay

2,469

2,465

Other long-term liabilities

822

-

Deferred revenues 

-

36

Total long-term liabilities

9,051

2,501

Shareholders' equity

161,060

143,582

Total liabilities and shareholders' equity

207,269

173,279

 

 

NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

Three months ended December 31,

Year ended

December 31,

2015

2014

 

2015

2014

(Audited)

Revenues:

Products

30,581

17,260

111,178

92,208

Services

9,441

8,563

37,336

28,410

Total revenues

40,022

25,823

148,514

120,618

Cost of revenues:

Products

12,593

7,394

47,185

39,784

Services

5,524

4,967

20,743

17,221

Amortization of acquired intangible    assets in cost of products

 

1,051

 

-

 

3,506

 

-

Total cost of revenues

19,168

12,361

71,434

57,005

Gross profit

20,854

13,462

77,080

63,613

Operating expenses:

Research and Development expenses, net

10,826

7,935

39,703

29,498

Sales and Marketing expenses

4,474

2,948

15,768

12,747

General and Administration expenses

1,606

981

5,856

4,457

Acquisition related expenses

-

-

2,655

-

Amortization of acquired intangible assets

378

-

1,517

-

Total operating expenses

17,284

11,864

65,499

46,702

Operating income

3,570

1,598

11,581

16,911

Financing income, net

184

166

643

563

Income before tax on income

3,754

1,764

12,224

17,474

Income tax benefit

1,407

1,527

3,501

1,178

Net income for the period

5,161

3,291

15,725

18,652

Earnings per share:

Basic

0.19

0.12

0.58

0.68

Diluted

0.19

0.12

0.57

0.67

Shares used for calculation of earnings per share:

Basic

27,073

27,273

27,185

27,447

Diluted

27,334

27,491

27,510

27,807

 

 

NOVA MEASURING INSTRUMENTS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands) - (Unaudited)

Three months ended

December 31,

Year ended

December 31,

 

2015

2014

 

2015

2014

(Audited)

Cash flows from operating activities:

Net income for the period

5,161

3,291

15,725

18,652

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

Depreciation

1,288

1,005

4,597

3,951

Amortization of acquired intangible assets

1,429

-

5,023

-

Amortization of deferred stock-based compensation

765

510

2,673

2,124

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

35

(42)

70

(71)

Deferred tax assets, net

(2,077)

(1,542)

(5,046)

(1,626)

Gain (loss) on securities

(23)

175

(10)

175

Decrease (increase) in trade accounts receivable

4,297

7,208

(1,959)

12,381

Decrease (increase) in inventories

745

935

(1,949)

2,226

Decrease (increase) in other current assets

872

(386)

370

408

Increase (decrease) in trade accounts payable

1,469

2,674

1,604

(4,038)

Increase (decrease) in other current liabilities and other long-term liabilities

683

(438)

3,329

64

Increase (decrease) in short and long term deferred revenues

(1,928)

(1,127)

1,361

(703)

Net cash provided by operating activities

12,716

12,263

25,788

33,543

Cash flow from investment activities:

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

(10,045)

(7,295)

37,991

(27,737)

Proceeds from short-term available for sale securities

-

1,617

-

1,617

Investment in short-term held for trading securities

-

(1,942)

-

(1,942)

Proceeds from short-term held for trading securities

2,005

-

2,005

-

Acquisition of subsidiary, net of acquired cash

-

-

(45,344)

-

Additions to property and equipment

(2,205)

(1,693)

(4,373)

(5,234)

Net cash used in investment activities

(10,245)

(9,313)

(9,721)

(33,296)

Cash flows from financing activities:

Purchases of treasury shares

-

(2,450)

(4,302)

(6,726)

Shares issued under employee stock-based plans

232

-

2,319

2,586

Net cash provided by (used in) financing activities

232

(2,450)

(1,983)

(4,140)

Increase (decrease) in cash and cash equivalents

2,703

500

14,084

(3,893)

Cash and cash equivalents – beginning of period

25,030

13,149

13,649

17,542

Cash and cash equivalents – end of period

27,733

13,649

27,733

13,649

 

 

NOVA MEASURING INSTRUMENTS LTD.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(U.S. dollars in thousands, except percentage) - (Unaudited)

Three months ended

December

 31, 2015

September

30, 2015

December

 31, 2014

GAAP cost of revenues

19,168

17,812

12,361

  Amortization of acquired intangible assets in cost of products

(1,051)

(13)

-

  Stock-based compensation in cost of products

(94)

(109)

(78)

  Stock-based compensation in cost of services

(63)

(62)

(28)

Non-GAAP cost of revenues

17,960

17,628

12,255

GAAP gross profit

20,854

22,634

13,462

Gross profit adjustments

1,208

184

106

Non-GAAP gross profit

22,062

22,818

13,568

GAAP gross margin as a percentage of revenues

52%

56%

52%

Non-GAAP gross margin as a percentage of revenues

55%

56%

53%

GAAP operating expenses

17,284

17,385

11,864

  Stock-based compensation in Research and Development

(322)

(318)

(184)

  Stock-based compensation in Sales and Marketing

(213)

(205)

(160)

  Stock-based compensation in General and Administrative

(73)

(84)

(60)

  Amortization of acquired intangible assets

(378)

(570)

-

Non-GAAP operating expenses

16,298

16,208

11,460

Non-GAAP operating income

5,764

6,610

2,108

GAAP operating margin as a percentage of revenues

9%

13%

6%

Non-GAAP operating margin as a percentage of revenues

14%

16%

8%

GAAP tax on income

(1,407)

(94)

(1,527)

  Deferred tax assets adjustments, net

2,077

482

1,542

Non-GAAP tax on income

670

388

15

GAAP net income

5,161

5,437

3,291

  Amortization of acquired intangible assets

1,429

583

-

  Stock-based compensation expenses

765

778

510

  Deferred tax assets adjustments, net

(2,077)

(482)

(1,542)

Non-GAAP net income

5,278

6,316

2,259

GAAP basic earnings per share

0.19

0.20

0.12

Non-GAAP basic earnings per share

0.19

0.23

0.08

GAAP diluted earnings per share

0.19

0.20

0.12

Non-GAAP diluted earnings per share

0.19

0.23

0.08

Shares used for calculation of earnings per share:

  Basic

27,073

27,172

27,273

  Diluted

27,334

27,481

27,491

 

 

NOVA MEASURING INSTRUMENTS LTD.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(U.S. dollars in thousands, except percentage) - (Unaudited)

Year ended December 31,

2015

2014

GAAP cost of revenues

71,434

57,005

  Amortization of acquired intangible assets in cost of products

(3,506)

-

  Stock-based compensation in cost of products

(373)

(375)

  Stock-based compensation in cost of services

(203)

(178)

Non-GAAP cost of revenues

67,352

56,452

GAAP gross profit

77,080

63,613

Gross profit adjustments

4,082

553

Non-GAAP gross profit

81,162

64,166

GAAP gross margin as a percentage of revenues

52%

53%

Non-GAAP gross margin as a percentage of revenues

55%

53%

GAAP operating expenses

65,499

46,702

  Stock-based compensation in Research and Development

(1,084)

(870)

  Stock-based compensation in Sales and Marketing

(744)

(446)

  Stock-based compensation in General and Administrative

(269)

(255)

  Acquisition related expenses

(2,655)

-

  Amortization of acquired intangible assets

(1,517)

-

Non-GAAP operating expenses

59,230

45,131

Non-GAAP operating income

21,932

19,035

GAAP operating margin as a percentage of revenues

8%

14%

Non-GAAP operating margin as a percentage of revenues

15%

16%

GAAP tax on income

(3,501)

(1,178)

  Deferred tax assets adjustments, net

5,046

1,626

Non-GAAP tax on income

1,545

448

GAAP net income

15,725

18,652

  Amortization of acquired intangible assets

5,023

-

  Stock-based compensation expenses

2,673

2,124

  Deferred tax assets adjustments, net

(5,046)

(1,626)

  Acquisition related expenses

2,655

-

Non-GAAP net income

21,030

19,150

GAAP basic earnings per share

0.58

0.68

Non-GAAP basic earnings per share

0.77

0.70

GAAP diluted earnings per share

0.57

0.67

Non-GAAP diluted earnings per share

0.76

0.69

Shares used for calculation of earnings per share:

  Basic

27,185

27,447

  Diluted

27,510

27,807

 

SOURCE Nova Measuring Instruments Ltd.



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