Nova Announces Record Quarterly Revenues and Profitability
Strong Business Momentum Leading to Significantly Improved Outlook, Company Expects 2010 Revenues to be Higher Than $78M With Net Profitability Above 21%
REHOVOT, Israel, August 3, 2010 /PRNewswire-FirstCall/ -- 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 2010 second quarter financial results.
Highlights for the Second Quarter of 2010
- Total revenues of $19.4 million, 22% increase over the first quarter of
2010
- Record level gross margins of 54%, up from 51% in the previous quarter
- GAAP net income of $4.7 million, or $0.18 per diluted share
- $6.3 million positive operating cash flow
- Accelerating standalone metrology customer penetrations
2010 Second Quarter Results
Total revenues for the second quarter of 2010 were $19.4 million, an increase of 179% relative to the second quarter of 2009, and an increase of 22% relative to the first quarter of 2010.
Gross margin for the second quarter of 2010 was 54%, compared with 41% in the second quarter of 2009, and 51% in the first quarter of 2010.
Operating expenses in the second quarter of 2010 were $5.8 million, compared with $3.0 million in the second quarter of 2009, and $5.4 million in the first quarter of 2010.
On a GAAP basis, the company reported net income of $4.7 million, or $0.18 per diluted share, in the second quarter of 2010. This compares to a net loss of $0.1 million in the second quarter of 2009, and a net income of $2.7 million, or $0.11 per diluted share, in the first quarter of 2010.
The company generated $6.3 million in cash from operating activities during the second quarter of 2010, and total cash reserves at the end of the second quarter of 2010 were $46.7 million.
Management Comments
"Q2 was an excellent quarter, with record levels of revenues, profitability and operating cash flow" commented Gabi Seligsohn, President and CEO of Nova. "These results demonstrate the success of our strategy which has focused on expanding our product offering, increasing our fab foot print and displacing traditional metrology techniques with our differentiated products".
"Semiconductor business fundamentals continue to be strong, as evidenced by 15 new fab announcements, some of which are moving much faster than was previously anticipated. The pace of technology transition continues to accelerate, and customers are adding our metrology solutions for a broader range of technology nodes and applications. In parallel, we have been able to increase the value we offer for existing products, through additional features and functionality, which have been very well received by our customers during the quarter".
"Recent customer design wins have generated very strong demand for our metrology solutions, and will result in significant revenue increase in the second half of the year, as fab expansion rates continue to rise. In parallel, our recently announced customer penetrations in the standalone metrology area lay solid foundation for further growth in the future. The fact that Nova now plays a much more significant role for the semiconductor manufacturing arena is clearly driving the company to an exceptional growth rate".
Guidance for year 2010
The company's revised revenue guidance for 2010 is $78-$85 million. Based on this revenue guidance, the company is also guiding to net profitability of 21%-24% for 2010.
The company's previous 2010 full year guidance was revenues of $61-$66 million, with net profitability of 13%-17%.
The Company will host a conference call today, August 3, 2010, 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 integrated process control 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; 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; 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, 2009 filed with the Securities and Exchange Commission on March 26, 2010. 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 As of December 31,
June 30,
2010 2009
CURRENT ASSETS
Cash and cash equivalents 6,838 9,861
Short-term interest-bearing bank
deposits 39,294 8,607
Trade accounts receivable 10,853 11,545
Inventories 7,997 3,949
Other current assets 2,307 1,728
67,289 35,690
LONG-TERM ASSETS
Long-term interest-bearing bank
deposits 570 561
Other Long-term assets 151 142
Severance pay funds 2,338 2,368
3,059 3,071
FIXED ASSETS, NET 2,302 2,163
Total assets 72,650 40,924
CURRENT LIABILITIES
Trade accounts payable 6,551 3,715
Deferred income 5,685 1,671
Other current liabilities 5,357 5,237
17,593 10,623
LONG-TERM LIABILITIES
Liability for employee severance pay 3,271 3,168
Deferred income 186 183
Other long-term liability 29 35
3,486 3,386
SHAREHOLDERS' EQUITY 51,571 26,915
Total liabilities and shareholders'
equity 72,650 40,924
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,
2010 2010 2009
REVENUES
Product sales 15,889 12,901 4,631
Services 3,551 3,080 2,333
19,440 15,981 6,964
COST OF REVENUES
Products 6,554 5,478 2,050
Services 2,452 2,389 2,091
9,006 7,867 4,141
GROSS PROFIT 10,434 8,114 2,823
OPERATING EXPENSES
Research & Development expenses, 1,183
net 2,828 2,554
Sales & Marketing expenses 2,242 2,196 1,293
General & Administration expenses 679 651 484
5,749 5,401 2,960
OPERATING PROFIT (LOSS) 4,685 2,713 (137)
Interest income (expenses), net 24 (14) 43
NET INCOME (LOSS) FOR THE PERIOD 4,709 2,699 (94)
Net income (loss) per share:
Basic 0.19 0.12 (0.00)
Diluted 0.18 0.11
Shares used for calculation of net
income (loss)
per share:
Basic 24,808 22,666 19,378
Diluted 26,406 24,236
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, June 30,
2010 2009
REVENUES
Product sales 28,790 8,276
Services 6,631 4,408
35,421 12,684
COST OF REVENUES
Product sales 12,032 3,632
Services 4,841 4,365
16,873 7,997
GROSS PROFIT 18,548 4,687
OPERATING EXPENSES
Research & Development expenses, net 5,382 2,966
Sales & Marketing expenses 4,438 2,466
General & Administration expenses 1,330 987
11,150 6,419
OPERATING PROFIT (LOSS) 7,398 (1,732)
INTEREST INCOME (EXPENSES), NET 10 (21)
NET INCOME (LOSS) FOR THE PERIOD 7,408 (1,753)
Net income (loss) per share:
Basic 0.31 (0.09)
Diluted 0.29
Shares used for calculation of net income
(loss) per share:
Basic 23,721 19,378
Diluted 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,
2010 2010 2009
CASH FLOW - OPERATING ACTIVITIES
Net income (loss) for the period 4,709 2,699 (94)
Adjustments to reconcile net loss to
net cash
used in operating activities:
Depreciation and amortization 323 324 276
Amortization of deferred stock-based 122 116 100
compensation
Increase in liability for employee
termination
benefits, net 105 48 144
Net recognized gains on investments -- -- (4)
Decrease (increase) in trade accounts 67 625 (2,441)
receivables
Decrease (increase) in inventories (1,855) (2,267) 636
Increase in other short and long term (388) (260) (608)
assets
Increase (decrease) in trade accounts 289 2,545 (102)
payables
Increase (decrease) in other current
and long-term
1,130 (1,105) (2)
liabilities
Increase (decrease) in short and long
term deferred
1,769 2,248 (44)
income
Net cash from (used in) operating 6,271 4,973 (2,139)
activities
CASH FLOW - INVESTMENT ACTIVITIES
Increase in short-term (10,701) (19,986) --
interest-bearing bank deposits
Proceeds from (investment in)
long-term interest-
-- (9) 141
bearing bank deposits
Additions to fixed assets (307) (405) (24)
Net cash from (used in) investment (11,008) (20,400) 117
activities
CASH FLOW - FINANCING ACTIVITIES
Shares issued under employee 51 122 --
share-based plans
Shares issued in public offering -- 16,968 --
Net cash from financing activities 51 17,090 --
Increase (decrease) in cash and cash (4,686) 1,663 (2,022)
equivalents
Cash and cash equivalents - beginning 11,524 9,861 11,039
of period
Cash and cash equivalents - end of
period 6,838 11,524 9,017
NOVA MEASURING INSTRUMENTS LTD.
YEAR TO DATE CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
Six months ended
June 30, June 30,
2010 2009
CASH FLOW - OPERATING ACTIVITIES
Net income (loss) for the period 7,408 (1,753)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 647 596
Amortization of deferred stock-based 238 206
compensation
Increase in liability for employee termination 153 30
benefits, net
Impairment loss on equipment -- --
Net recognized gains on investments -- (4)
Decrease (increase) in trade accounts 692 (2,197)
receivables
Decrease (increase) in inventories (4,122) 1,156
Decrease (increase) in other current and long (648) 89
term assets
Increase (decrease) in trade accounts payables
and other long
2,834 (1,302)
term liabilities
Increase (decrease) in current liabilities 25 (1,639)
Increase (decrease) in short and long term 4,017 (938)
deferred income
Net cash from (used in) operating activities 11,244 (5,756)
CASH FLOW - INVESTMENT ACTIVITIES
Decrease (increase) in short-term (30,687) 50
interest-bearing bank deposits
Increase in short-term investments -- (4,595)
Proceeds from (investment in) long-term (9) 21
deposits
Additions to fixed assets (712) (28)
Net cash used in investment activities (31,408) (4,552)
CASH FLOW - FINANCING ACTIVITIES
Shares issued under employee share-based plans 173 --
Shares issued in public offering 16,968 --
Net cash from financing activities 17,141 --
Decrease in cash and cash equivalents (3,023) (10,308)
Cash and cash equivalents - beginning of 9,861 19,325
period
Cash and cash equivalents - end of period 6,838 9,017
Company Contact:
Dror David, Chief Financial Officer
Nova Measuring Instruments Ltd.
Tel: +972-8-938-7505
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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