Nova Reports Fourth Quarter and Full Year 2020 Results

Rhea-AI Summary

Nova reported strong financial results for Q4 and full year 2020, achieving record revenues of $76.3 million and $269.4 million respectively, up 18% and 20% year-over-year. GAAP net income for Q4 was $13.7 million ($0.47/share), and $47.9 million for the year ($1.65/share), representing a 35% increase year-over-year. Non-GAAP net income for Q4 reached $15.9 million ($0.55/share). The company introduced its ELIPSON™ metrology solution, with a positive outlook for Q1 2021, projecting revenues between $76 million and $83 million.

Positive

• Record Q4 revenue of $76.3 million, up 18% year-over-year.
• Record full-year revenue of $269.4 million, up 20% year-over-year.
• GAAP net income of $47.9 million for 2020, a 35% increase from 2019.
• Introduction of new metrology solution ELIPSON™, generating initial revenues.

Negative

• Q4 gross margin decreased to 55.5% from 57.1% in Q3 2020.
• Operating expenses increased to $25.5 million in Q4 from $24.1 million in Q3.
• Q4 GAAP net income decreased slightly from $13.9 million in Q3 2020.

REHOVOT, Israel, Feb. 18, 2021 /PRNewswire/ -- Nova (Nasdaq: NVMI) today announced financial results for the fourth quarter and full year 2020.

Fourth Quarter 2020 Highlights:

• Quarterly record revenue of $76.3 million, up 18% year-over-year
• GAAP net income of $13.7 million, or $0.47 per diluted share, up 9% year-over-year on a per-share basis
• Non-GAAP net income of $15.9 million, or $0.55 per diluted share, up 8% year-over-year on a per-share basis
• Initial revenues recognized from multiple customers for Nova ELIPSON™, a newly launched materials metrology solution
• Record quarterly materials metrology revenue, driven by expansion into leading Logic and Foundry customers

Full Year 2020 Highlights:

• Record annual revenue of $269.4 million, up 20% year-over-year
• GAAP net income of $47.9 million, or $1.65 per diluted share, up 35% year-over-year on a per-share basis
• Non-GAAP net income of $59.6 million, or $2.06 per diluted share, up 30% year-over-year on a per-share basis

 

GAAP Results ($K)
	Q4 2020	Q3 2020	Q4 2019	FY 2020	FY 2019
Revenues	$76,303	$69,485	$64,625	$269,396	$224,909
Net Income	$13,657	$13,896	$12,385	$47,907	$35,171
Earnings per Diluted Share	$0.47	$0.48	$0.43	$1.65	$1.23
NON-GAAP Results ($K)
	Q4 2020	Q3 2020	Q4 2019	FY 2020	FY 2019
Net Income	$15,872	$16,511	$14,561	$59,638	$45,523
Earnings per Diluted Share	$0.55	$0.57	$0.51	$2.06	$1.59

 

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, stock-based compensation expenses, expense related to a transaction made by a financial institution without Company authorization, facilities transition costs, revaluation of operating lease liabilities, amortization of debt discount and issuance costs and tax effect of non-GAAP adjustment.

Management Comments

"Our robust fourth quarter financial results concluded a record year for Nova, demonstrating the company's growing agility and outstanding execution capabilities," commented Eitan Oppenhaim, President and Chief Executive Officer. "This was a firm conclusion to a well-performed year during which we continued to innovate and expand our differentiated portfolio to support our customers' new generation of devices. Our resilience amid the pandemic, led by our global teams, drove our strong performance throughout the year. With our new enhanced product offering and solid market position, we enter 2021 with substantial momentum to continue our growth across customers and territories."

2021 First Quarter Financial Outlook

Management provided an outlook for the first quarter, the period ending March 31, 2021. Based on current estimates, management expects:

• $76 million to $83 million in revenue
• $0.41 to $0.53 in diluted GAAP EPS
• $0.55 to $0.66 in diluted non-GAAP EPS

2020 Fourth Quarter Results

Total revenues for the fourth quarter of 2020 were $76.3 million, an increase of 9.8% compared with the third quarter of 2020 and an increase of 18.1% compared with the fourth quarter of 2019.

Gross margin for the fourth quarter of 2020 was 55.5%, compared with a gross margin of 57.1% in the third quarter of 2020, and compared with a gross margin of 53.6% in the fourth quarter of 2019.

Operating expenses in the fourth quarter of 2020 were $25.5 million, compared with $24.1 million in the third quarter of 2020 and compared with $20.1 million in the fourth quarter of 2019.

On a GAAP basis, the Company reported net income of $13.7 million, or $0.47 per diluted share, in the fourth quarter of 2020. This is compared with net income of $13.9 million, or $0.48 per diluted share, in the third quarter of 2020, and compared with net income of $12.4 million, or $0.43 per diluted share, in the fourth quarter of 2019.

On a non-GAAP basis, which excludes amortization of acquired intangible assets, stock-based compensation expenses, one-time expense related to a transaction made by a financial institution without Company authorization, facilities transition costs, revaluation of operating lease liabilities, amortization of debt discount and issuance costs and tax effect of non-GAAP adjustment, the Company reported net income of $15.9 million, or $0.55 per diluted share, in the fourth quarter of 2020. This is compared with net income of $16.5 million, or $0.57 per diluted share, in the third quarter of 2020, and compared with net income of $14.6 million, or $0.51 per diluted share, in the fourth quarter of 2019.

2020 Full Year Results

Total revenues for 2020 were $269.4 million, an increase of 19.8% compared to total revenues of $224.9 million for 2019.

Gross margin in 2020 was 56.8%, compared with gross margin of 54.2% in 2019.

Operating expenses in 2020 were $97.4 million, compared with operating expenses of $85.4 in 2019.

On a GAAP basis, the Company reported net income of $47.9 million, or $1.65 per diluted share, in 2020. This is compared with a net income of $35.2 million, or $1.23 per diluted share, in 2019.

On a non-GAAP basis, which excludes amortization of acquired intangible assets, stock-based compensation expenses, one-time expense related to a transaction made by a financial institution without Company authorization, facilities transition costs, revaluation of operating lease liabilities, amortization of debt discount and issuance costs and tax effect of non-GAAP adjustment, the Company reported net income of $59.6 million, or $2.06 per diluted share, in 2020. This is compared with net income of $45.5 million, or $1.59 per diluted share, in 2019.

Conference Call Information

Nova will host a conference call today, February 18, 2021, at 9 a.m. Eastern Time, to discuss the financial results and outlook. To attend the conference call, please dial one of the following teleconferencing numbers. Please begin by placing your calls five 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. TOLL-FREE Dial-in Number: 1-866-548-4713
ISRAEL TOLL-FREE Dial-in Number: 1-809-212-883
INTERNATIONAL Dial-in Number: 1-323-794-2093

At:
9 a.m. Eastern Time
6 a.m. Pacific Time
4 p.m. Israel Time
Please reference conference ID: 1340079

The conference call will also be webcast live from a link on Nova's website at https://www.novami.com/investors/events/.

A replay of the conference call will be available from February 18, 2021 at 12 p.m. Eastern Time to February 25, 2021 at 11:59 p.m. Eastern Time. To access the replay, please dial one of the following numbers:

Replay Dial-in TOLL-FREE: 1-844-512-2921
Replay Dial-in TOLL/INTERNATIONAL: 1-412-317-6671
Replay Pin Number: 1340079

A replay will also be available for 90 days on Nova's website at https://www.novami.com/investors/events/.

About Nova: Nova is a leading innovator and key provider of metrology solutions for advanced process control used in semiconductor manufacturing. Nova delivers continuous innovation by providing 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, provides its customers with deep insight into the development and production of the most advanced semiconductor devices. Nova's unique capability to deliver innovative x-ray and optical solutions enables its customers to improve performance, enhance product 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.novami.com.

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

This press release provides financial measures that exclude amortization of acquired intangible assets, stock-based compensation expenses, expense related to a transaction made by a financial institution without Company authorization, facilities transition costs, revaluation of operating lease liabilities, amortization of debt discount and issuance costs and tax effect of non-GAAP adjustment, as applicable, 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 enhance 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 allow 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 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 efforts to complete and integrate current and/or future acquisitions; risks related to worldwide financial and economic instabilities, including the implications of the ongoing novel coronavirus (COVID-19) pandemic; risks related to our intellectual property; new product offerings from our competitors; unanticipated manufacturing or supply problems; risks related to government programs we participate in; risks related to taxation; changes in customer demand for our products; risks related to currency fluctuations; risks related to technology security threats, including data breaches, cyberattacks and system disruptions, and changes in privacy laws; 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, 2019 filed with the Securities and Exchange Commission on March 12, 2020. 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.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands) - (Unaudited)
		As of December 31,
ASSETS		2020		2019
Current assets
Cash and cash equivalents		232,304		31,748
Short-term interest-bearing bank deposits		191,567		154,533
Trade accounts receivable, net		63,314		51,603
Inventories		61,734		48,362
Other current assets		9,782		16,685
Total current assets		558,701		302,931
Non-current assets
Interest-bearing bank deposits		2,547		2,813
Restricted interest-bearing bank deposits		1,476		2,000
Deferred tax assets		2,869		4,554
Other long-term assets		462		437
Severance pay funds		1,281		1,210
Operating lease right-of-use assets		29,109		28,256
Property and equipment, net		34,168		30,566
Intangible assets, net		5,059		7,562
Goodwill		20,114		20,114
Total non-current assets		97,085		97,512
Total assets		655,786		400,443
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable		24,096		20,706
Deferred revenues		4,717		2,256
Operating lease current liabilities		3,703		2,777
Other current liabilities		28,418		20,493
Total current liabilities		60,934		46,232
Non-current liabilities
Convertible senior notes, net		178,808		-
Accrued severance pay		3,719		3,294
Operating lease long-term liabilities		31,905		30,536
Other long-term liability		8,882		5,842
Total non-current liabilities		223,314		39,672
Shareholders' equity		371,538		314,539
Total liabilities and shareholders' equity		655,786		400,443

 

 

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,
	2020		2019		2020		2019
Revenues:
Products	61,741		47,015		209,320		167,200
Services	14,562		17,610		60,076		57,709
Total revenues	76,303		64,625		269,396		224,909
Cost of revenues:
Products	22,633		18,854		78,555		67,300
Services	11,347		11,138		37,918		35,789
Total cost of revenues	33,980		29,992		116,473		103,089
Gross profit	42,323		34,633		152,923		121,820
Operating expenses:
Research and development, net	15,753		9,722		53,015		44,508
Sales and marketing	8,089		7,270		29,321		28,213
General and administrative	1,009		2,502		12,514		10,066
Amortization of acquired intangible assets	626		656		2,503		2,625
Total operating expenses	25,477		20,150		97,353		85,412
Operating income	16,846		14,483		55,570		36,408
Financing income (expense), net	(1,335)		826		926		3,078
Income before tax on income	15,511		15,309		56,496		39,486
Income tax expenses	1,854		2,924		8,589		4,315
Net income for the period	13,657		12,385		47,907		35,171
Earnings per share:
Basic	0.49		0.44		1.71		1.26
Diluted	0.47		0.43		1.65		1.23
Shares used for calculation of earnings per share  (in thousands):
Basic	28,146		27,965		28,097		27,895
Diluted	28,999		28,689		28,950		28,574

 

 

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,
	2020		2019		2020		2019
Cash flows from operating activities:
Net income for the period	13,657		12,385		47,907		35,171
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,596		1,086		9,729		10,398
Share-based compensation	2,231		1,430		6,949		5,092
Net effect of exchange rate fluctuation	(1,187)		(106)		(1,584)		(510)
Amortization of debt discount and issuance costs	868		-		868		-
Change in deferred tax assets, net	535		73		(193)		(681)
Change in accrued severance pay, net	162		100		354		470
Change in trade accounts receivable	(22,217)		(4,549)		(11,711)		1,928
Change in inventories	(1,219)		1,669		(16,271)		(7,518)
Change in other current and long-term assets	1,655		(1,561)		6,878		(6,161)
Change in trade accounts payable	1,228		2,117		3,255		1,691
Change in other current and long-term liabilities	7,241		4,190		11,611		2,540
Change in short term deferred revenues	926		(1,459)		2,461		(1,728)
Net cash provided by operating activities	6,476		15,375		60,253		40,692
Cash flow from investment activities:
Change in short-term and long-term interest-bearing bank deposits	10,125		(4,392)		(36,016)		(4,181)
Purchase of property and equipment	(1,570)		(5,648)		(6,443)		(21,269)
Net cash provided by (used in) investment activities	8,555		(10,040)		(42,459)		(25,450)
Cash flows from financing activities:
Proceeds from the issuance of convertible senior notes, net of issuance costs	193,588		-		193,588		-
Purchases of treasury shares	(10,000)		-		(12,549)		(7,159)
Shares issued upon exercise of options	-		125		367		492
Net cash provided by (used in) financing activities	183,588		125		181,406		(6,667)
Effect of exchange rate fluctuations on cash and cash equivalents	972		68		1,356		296
Increase in cash and cash equivalents	199,591		5,528		200,556		8,871
Cash and cash equivalents – beginning of period	32,713		26,220		31,748		22,877
Cash and cash equivalents – end of period	232,304		31,748		232,304		31,748

 

 

NOVA MEASURING INSTRUMENTS LTD.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(U.S. dollars in thousands, except percentage and per share data) - (Unaudited)
	Three months ended
	December 31, 2020		September 30, 2020		December 31, 2019
GAAP gross profit	42,323		39,657		34,633
Stock-based compensation expenses *	415		414		269
Non-GAAP gross profit	42,738		40,071		34,902
GAAP gross margin as a percentage of revenues	55%		57%		54%
Non-GAAP gross margin as a percentage of revenues	56%		58%		54%
GAAP operating income	16,846		15,528		14,483
Stock-based compensation expenses *	2,231		1,946		1,430
Amortization of acquired intangible assets	626		625		656
One-time income related to a transaction made by a financial institution without Company authorization	(2,850)		-		-
Non-GAAP operating income	16,853		18,099		16,569
GAAP operating margin as a percentage of revenues	22%		22%		22%
Non-GAAP operating margin as a percentage of revenues	22%		26%		26%
GAAP net income	13,657		13,896		12,385
Stock-based compensation expenses *	2,231		1,946		1,430
Amortization of acquired intangible assets	626		625		656
Amortization of debt discount and issuance costs	868		-		-
One-time income related to a transaction made by a financial institution without Company authorization	(2,850)		-		-
Revaluation of operating lease liabilities	1,364		161		269
Tax effect of non-GAAP adjustments	(24)		(117)		(179)
Non-GAAP net income	15,872		16,511		14,561
GAAP basic earnings per share	0.49		0.49		0.44
Non-GAAP basic earnings per share	0.56		0.59		0.52
GAAP diluted earnings per share	0.47		0.48		0.43
Non-GAAP diluted earnings per share	0.55		0.57		0.51
Shares used for calculation of earnings per share (in thousands):
Basic	28,146		28,168		27,965
Diluted	28,999		29,020		28,689
* Stock-based compensation expenses for the three months ended December 31, 2020 included in – Cost of revenues products – 292; Cost of revenues services – 123; Research and development expenses, net – 904; Sales and marketing expenses – 449; General and administrative expenses – 463

 

 

NOVA MEASURING INSTRUMENTS LTD.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(U.S. dollars in thousands, except percentage and per share data) - (Unaudited)
	Year ended December 31,
	2020		2019
GAAP gross profit	152,923		121,820
Stock-based compensation expenses *	1,364		1,003
Facilities transition costs	-		703
Non-GAAP gross profit	154,287		123,526
GAAP gross margin as a percentage of revenues	57%		54%
Non-GAAP gross margin as a percentage of revenues	57%		55%
GAAP operating income	55,570		36,408
Stock-based compensation expenses *	6,949		5,092
Amortization of acquired intangible assets	2,503		2,625
One-time expense related to a transaction made by a financial institution without Company authorization, net	150		-
Facilities transition costs	-		2,329
Non-GAAP operating income	65,172		46,454
GAAP operating margin as a percentage of revenues	21%		16%
Non-GAAP operating margin as a percentage of revenues	24%		21%
GAAP net income	47,907		35,171
Stock-based compensation expenses *	6,949		5,092
Amortization of acquired intangible assets	2,503		2,625
Amortization of debt discount and issuance costs	868		-
One-time expense related to a transaction made by a financial institution without Company authorization, net	150		-
Facilities transition costs	-		2,329
Revaluation of operating lease liabilities	2,053		1,410
Tax effect of non-GAAP adjustments	(792)		(1,104)
Non-GAAP net income	59,638		45,523
GAAP basic earnings per share	1.71		1.26
Non-GAAP basic earnings per share	2.12		1.63
GAAP diluted earnings per share	1.65		1.23
Non-GAAP diluted earnings per share	2.06		1.59
Shares used for calculation of earnings per share (in thousands):
Basic	28,097		27,895
Diluted	28,950		28,574
* Stock-based compensation expenses for the year ended December 31, 2020 included in – Cost of revenues products – 927; Cost of revenues services – 437; Research and development expenses, net – 2,556; Sales and marketing expenses – 1,531; General and administrative expenses – 1,498

 

 

NOVA MEASURING INSTRUMENTS LTD.
SUPPLEMENTAL INFORMATION - RECONCILIATION OF FISRT QUARTER 2021
GAAP TO NON-GAAP GUIDANCE
(Unaudited)
	Low		High
Estimated GAAP net income per diluted share	0.41		0.53
Estimated non-GAAP items:
Stock-based compensation expenses	0.09		0.09
Amortization of acquired intangible assets	0.02		0.02
Amortization of debt discount and issuance costs	0.04		0.04
Tax effect of non-GAAP adjustments	(0.01)		(0.02)
Estimated non-GAAP net income per diluted share	0.55		0.66

 

 

 

Company Contact: Dror David, Chief Financial Officer Nova Measuring Instruments Ltd. Tel: +972-73-229-5760 E-mail: info@novami.com www.novami.com

Investor Relations Contact: Miri Segal MS-IR LLC Tel: +917-607-8654 E-mail: msegal@ms-ir.com

 

 

 

 

 

 

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SOURCE Nova