NOVA MEASURING INSTRUMENTS LTD. REHOVOT, Israel, Feb. 14, 2017 /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 financial results for the fourth quarter and full year 2016, the periods ended December 31, 2016.
Fourth Quarter 2016 Highlights:
-- Record quarterly revenue of $50.2 million, up 14% sequentially and 25%
year-over-year, significantly exceeding guidance of $42 to $46 million
and as preannounced on January 26, 2017
-- GAAP net income of $8.4 million, or $0.30 per diluted share, up 58%
year-over-year on a per-share basis, exceeding guidance of $0.23 to
$0.29 per share
-- Non-GAAP net income of $11.7 million, or $0.42 per diluted share, up 24%
sequentially and 121% year-over-year on a per-share basis, exceeding
guidance of $0.31 to $0.40 per share
-- Received over $10 million in XPS orders from multiple foundry customers
-- Received multiple orders from leading 3D-NAND manufacturers
Full Year 2016 Highlights:
-- Record full-year revenue of $163.9 million, up 10% year-over-year
-- GAAP net income of $9.6 million, or $0.35 per diluted share, including
non-recurring expense of $12.9 million related to royalty payment to the
Israeli Office of the Chief Scientist
-- Record non-GAAP net income of $30.3 million, or $1.10 per diluted share,
up 44% year-over-year on a per-share basis
-- Diversified customer mix yielded four customers contributing more than
10% each to the annual product revenues
GAAP Results ($K)
----------------
Q4 2016 Q3 2016 Q4 2015 FY 2016 FY 2015
------- ------- ------- ------- -------
Revenues $50,212 $44,060 $40,022 $163,903 $148,514
-------- ------- ------- ------- -------- --------
Net Income (Loss) $8,364 $(4,778) $5,161 $9,644 $15,725
---------------- ------ ------- ------ ------ -------
Earnings (Loss) per Diluted Share $0.30 $(0.18) $0.19 $0.35 $0.57
--------------------------------- ----- ------ ----- ----- -----
NON-GAAP Results ($K)
--------------------
Q4 2016 Q3 2016 Q4 2015 FY 2016 FY 2015
------- ------- ------- ------- -------
Net Income $11,719 $9,449 $5,278 $30,321 $21,030
---------- ------- ------ ------ ------- -------
Earnings per Diluted Share $0.42 $0.34 $0.19 $1.10 $0.76
-------------------------- ----- ----- ----- ----- -----
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, net adjustments of deferred tax assets, stock-based compensation expenses, acquisition related expenses, expense related to royalty buyout agreement with the Office of the Chief Scientist and inventory write-off.
Management Comments
"The fourth quarter was an outstanding conclusion to another record year, demonstrating our ability to execute our growth plans effectively while improving our customer diversification and operational model," commented Eitan Oppenhaim, President and Chief Executive Officer of Nova. "We believe that the strong end to 2016 sets us on course for another growth year in 2017, bolstered by growing demand for our entire product portfolio, combining dimensions and materials metrology solutions. The strength of our business, as evidenced by our strong guidance for the first quarter, will continue into 2017 as we continue to secure wins from multiple customers in various industry segments."
Mr. Oppenhaim continued, "Nova's broad offering, which is embraced by our diversified customer base, allows us today to address a wider range of challenges that generate more opportunities for us to grow in 2017. During our continued growth, we have leveraged our proven business model to drive record profits, as evidenced by the significant increase in full-year non-GAAP net income. We expect to continue to benefit from our efficient business model in the coming years, leading to continued profitable growth."
2017 First Quarter Financial Outlook
Management provided an outlook for the first quarter, the period ending March 31, 2017. Based on current estimates, management expects:
-- $50 million to $54 million in revenue
-- $0.31 to $0.39 in diluted GAAP EPS
-- $0.37 to $0.45 in diluted non-GAAP EPS
2016 Fourth Quarter Results
Total revenues for the fourth quarter of 2016 were $50.2 million, in line with the results announced on January 26, 2017. Sequentially, this represented an increase of 14% compared to the third quarter of 2016, and an increase of 25% relative to the fourth quarter of 2015.
Gross margin for the fourth quarter of 2016 was 56%, compared sequentially with gross margin of 22% in the third quarter of 2016 (which included a non-recurring expense related to royalty buyout agreement) and compared with gross margin of 52% in the fourth quarter of 2015.
Operating expenses in the fourth quarter of 2016 were $17.4 million. This is compared with $16.6 million in the third quarter of 2016 and compared with $17.3 million in the fourth quarter of 2015.
On a GAAP basis, the company reported net income of $8.4 million, or $0.30 per diluted share, in the fourth quarter of 2016. This is compared with a net loss of $4.8 million, or $0.18 per diluted share, in the third quarter of 2016. The company reported net income of $5.2 million, or $0.19 per diluted share, in the fourth quarter of 2015.
On a non-GAAP basis, which excludes amortization of acquired intangible assets, net adjustments of deferred tax assets and stock-based compensation expenses, the company reported net income of $11.7 million, or $0.42 per diluted share, in the fourth quarter of 2016. This is compared with net income of $9.4 million, or $0.34 per diluted share, in the third quarter of 2016, and compared with net income of $5.3 million, or $0.19 per diluted share, in the fourth quarter of 2015.
Cash utilization in the fourth quarter was higher than normal mainly due to the timing of shipments during the quarter, and management expects the first quarter of 2017 to include higher than normal cash generation.
2016 Full Year Results
Total revenues for 2016 were $163.9 million, an increase of 10% compared to total revenues of $148.5 million for 2015.
Gross margin in 2016 was 46%, and included $12.9 million of non-recurring expense related to royalty buyout agreement. This is compared with gross margin of 52% in 2015.
Operating expenses in 2016 were $65.1 million, compared with operating expenses of $65.5 million in 2015.
On a GAAP basis, which included $12.9 million of expense related to a royalty buyout agreement with the Office of the Chief Scientist, the company reported net income of $9.6 million, or $0.35 per diluted share, in 2016. This is compared with a net income of $15.7 million, or $0.57 per diluted share, in 2015.
On a non-GAAP basis, which excludes amortization of acquired intangible assets, net adjustments of deferred tax assets, stock-based compensation expenses, expense related to a royalty buyout agreement with the Office of the Chief Scientist and inventory write-off, the company reported net income of $30.3 million, or $1.10 per diluted share, in 2016. This is compared with net income of $21.0 million, or $0.76 per diluted share, in 2015.
Total cash reserves at the end of 2016 were $91.7 million, compared to $97.8 million at the end of 2015.
Conference Call Information
Nova will host a conference call today, February 14, 2017, at 9 a.m. Eastern Time, to discuss the financial results and future 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. Dial-in Number: 1-888-244-2417
ISRAEL Dial-in Number: 1 80 925 8350
INTERNATIONAL Dial-in Number: 1-913-312-0966
At:
9 a.m. Eastern Time
6 a.m. Pacific Time
4 p.m. Israeli Time
Please reference conference ID 3628025
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 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 charges for amortization of acquired intangible assets, net adjustment of deferred tax assets, stock-based compensation expenses, acquisition related expenses, expense related to royalty buyout agreement with the Office of the Chief Scientist and inventory write-off 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; 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 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, 2015 filed with the Securities and Exchange Commission on February 29, 2016. 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.
-------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(U.S. dollars in thousands) -(Unaudited)
As of December 31,
-------------------
ASSETS 2016 2015
---- ----
Current
assets
Cash and
cash
equivalents 20,406 27,733
Short-term
interest-
bearing
bank
deposits 70,546 69,298
Trade
accounts
receivable 42,626 19,046
Inventories 29,260 27,683
Deferred tax
assets - 3,540
Other
current
assets 5,068 2,888
----- -----
Total
current
assets 167,906 150,188
------- -------
Long-term
assets
Long-term
interest-
bearing
bank
deposits 750 750
Deferred tax
assets 3,020 5,735
Severance
pay funds 1,425 1,514
Property and
equipment,
net 10,017 11,062
Identifiable
intangible
assets, net 15,361 17,906
Goodwill 20,114 20,114
------ ------
Total long-
term assets 50,687 57,081
------ ------
Total assets 218,593 207,269
======= =======
LIABILITIES
AND
SHAREHOLDERS'
EQUITY
Current
liabilities
Trade
accounts
payable 16,501 14,378
Deferred
revenues 4,072 5,828
Deferred tax
liabilities - 956
Other
current
liabilities 18,461 15,996
------ ------
Total
current
liabilities 39,034 37,158
------ ------
Long-term
liabilities
Deferred tax
liabilities 1,094 5,760
Liability
for
employee
severance
pay 2,418 2,469
Other long-
term
liabilities 1,330 822
----- ---
Total long-
term
liabilities 4,842 9,051
----- -----
Shareholders'
equity 174,717 161,060
------- -------
Total
liabilities
and
shareholders'
equity 218,593 207,269
======= =======
NOVA MEASURING INSTRUMENTS LTD.
-------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
(U.S. dollars in thousands, except per share data) - (Unaudited)
Three months ended Year ended
December 31, December 31,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
Revenues:
Products 39,806 30,581 122,439 111,178
Services 10,406 9,441 41,464 37,336
------ ----- ------ ------
Total revenues 50,212 40,022 163,903 148,514
------ ------ ------- -------
Cost of revenues:
Products 15,497 12,593 48,577 47,185
Services 6,557 5,524 25,282 20,743
Expense related to
royalty buyout
agreement - - 12,875 -
with the Office of the
Chief Scientist
Inventory write-off - - 1,889 -
Amortization of
acquired intangible
assets in - 1,051 - 3,506
--- ----- --- -----
cost of products
Total cost of revenues 22,054 19,168 88,623 71,434
------ ------ ------ ------
Gross profit 28,158 20,854 75,280 77,080
Operating expenses:
Research and
development expenses,
net 9,225 10,826 34,998 39,703
Sales and marketing
expenses 5,814 4,474 20,736 15,768
General and
administration
expenses 1,702 1,606 6,835 5,856
Acquisition related
expenses - - - 2,655
Amortization of
acquired intangible
assets 636 378 2,545 1,517
--- --- ----- -----
Total operating
expenses 17,377 17,284 65,114 65,499
------ ------ ------ ------
Operating income 10,781 3,570 10,166 11,581
Financing income, net 190 184 1,216 643
--- --- ----- ---
Income before tax on
income 10,971 3,754 11,382 12,224
Income tax expenses
(benefit) 2,607 (1,407) 1,738 (3,501)
----- ------ ----- ------
Net income for the
period 8,364 5,161 9,644 15,725
===== ===== ===== ======
Earnings per share:
Basic 0.31 0.19 0.35 0.58
==== ==== ==== ====
Diluted 0.30 0.19 0.35 0.57
==== ==== ==== ====
Shares used for calculation of earnings per
share:
Basic 27,292 27,073 27,175 27,185
====== ====== ====== ======
Diluted 27,704 27,334 27,503 27,510
====== ====== ====== ======
NOVA MEASURING INSTRUMENTS LTD.
-------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(U.S. dollars in thousands) - (Unaudited)
Three months ended Year ended
December 31, December 31,
2016 2015 2016 2015
---- ---- ---- ----
Cash flows from operating activities:
Net income for the period 8,364 5,161 9,644 15,725
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation 731 1,288 4,271 4,597
Amortization of acquired intangible assets 636 1,429 2,545 5,023
Amortization of deferred stock-based compensation 691 765 2,735 2,673
Increase (decrease) in liability for employee (57) 35 38 70
termination benefits, net
Deferred tax assets, net 2,028 (2,077) 633 (5,046)
Loss on securities - (23) - (10)
Decrease (increase) in trade accounts receivable (19,068) 4,297 (23,580) (1,959)
Decrease (increase) in inventories (335) 745 (1,670) (1,949)
Decrease (increase) in other current and long term (1,885) 872 (2,180) 370
assets
Increase in trade accounts payable 4,127 1,469 2,123 1,604
Increase in other current liabilities and 3,601 683 3,037 3,329
other long-term liabilities
Increase (decrease) in short and long term deferred (351) (1,928) (1,756) 1,361
revenues
Net cash provided by (used in) operating activities (1,518) 12,716 (4,160) 25,788
------ ------ ------ ------
Cash flow from investment activities:
Decrease (increase) in short-term interest-bearing (998) (10,045) (1,248) 37,991
bank deposits
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 (1,518) (2,205) (3,133) (4,373)
------ ------ ------ ------
Net cash used in investment activities (2,516) (10,245) (4,381) (9,721)
------ ------- ------ ------
Cash flows from financing activities:
Purchases of treasury shares - - (937) (4,302)
Shares issued under employee stock-based plans 786 232 2,151 2,319
--- --- ----- -----
Net cash provided by (used in) financing activities 786 232 1,214 (1,983)
--- --- ----- ------
Increase (decrease) in cash and cash equivalents (3,248) 2,703 (7,327) 14,084
Cash and cash equivalents - beginning of period 23,654 25,030 27,733 13,649
------ ------ ------ ------
Cash and cash equivalents - end of period 20,406 27,733 20,406 27,733
====== ====== ====== ======
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, September 30, December 31,
2016 2016 2015
---- ---- ----
GAAP cost of
revenues 22,054 34,367 19,168
Amortization of
acquired
intangible assets
in cost of
products - - (1,051)
Expense related to
royalty buyout
agreement with the
Office of the
Chief Scientist - (12,875) -
Inventory write-
off - (1,889) -
Stock-based
compensation in
cost of products (88) (79) (94)
Stock-based
compensation in
cost of services (54) (52) (63)
--- --- ---
Non-GAAP cost of
revenues 21,912 19,472 17,960
====== ====== ======
GAAP gross profit 28,158 9,693 20,854
Gross profit
adjustments 142 14,895 1,208
--- ------ -----
Non-GAAP gross
profit 28,300 24,588 22,062
====== ====== ======
GAAP gross margin as
a percentage of
revenues 56% 22% 52%
Non-GAAP gross
margin as a
percentage of
revenues 56% 56% 55%
GAAP operating
expenses 17,377 16,640 17,284
Stock-based
compensation in
research and
development (247) (200) (322)
Stock-based
compensation in
sales and
marketing (211) (226) (213)
Stock-based
compensation in
general and
administrative (91) (82) (73)
Amortization of
acquired
intangible assets (636) (637) (378)
---- ---- ----
Non-GAAP operating
expenses 16,192 15,495 16,298
------ ------ ------
Non-GAAP operating
income 12,108 9,093 5,764
====== ===== =====
GAAP operating
margin as a
percentage of
revenues 21% (16%) 9%
Non-GAAP operating
margin as a
percentage of
revenues 24% 21% 14%
GAAP tax on income 2,607 (1,868) (1,407)
Deferred tax assets
adjustments, net (2,028) 1,813 2,077
------ ----- -----
Non-GAAP tax on
income 579 (55) 670
=== === ===
GAAP net income
(loss) 8,364 (4,778) 5,161
Amortization of
acquired
intangible assets 636 637 1,429
Expense related to
royalty buyout
agreement with the
Office of the
Chief Scientist - 12,875 -
Stock-based
compensation
expenses 691 639 765
Deferred tax assets
adjustments, net 2,028 (1,813) (2,077)
Inventory write-
off - 1,889 -
Non-GAAP net income 11,719 9,449 5,278
====== ===== =====
GAAP basic earnings
(loss) per share 0.31 (0.18) 0.19
==== ===== ====
Non-GAAP basic
earnings per share 0.43 0.35 0.19
==== ==== ====
GAAP diluted
earnings (loss)
per share 0.30 (0.18) 0.19
==== ===== ====
Non-GAAP diluted
earnings per share 0.42 0.34 0.19
==== ==== ====
Shares used for calculation of earnings (loss) per
share:
Basic 27,292 27,169 27,073
====== ====== ======
Diluted 27,704 27,536 27,334
====== ====== ======
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,
-----------------------
2016 2015
---- ----
GAAP cost of
revenues 88,623 71,434
Amortization of
acquired
intangible
assets in cost
of products - (3,506)
Expense related
to royalty
buyout
agreement with
the Office of
the Chief
Scientist (12,875) -
Inventory
write-off (1,889) -
Stock-based
compensation
in cost of
products (342) (373)
Stock-based
compensation
in cost of
services (218) (203)
---- ----
Non-GAAP cost
of revenues 73,299 67,352
====== ======
GAAP gross
profit 75,280 77,080
Gross profit
adjustments 15,324 4,082
------ -----
Non-GAAP gross
profit 90,604 81,162
====== ======
GAAP gross
margin as a
percentage of
revenues 46% 52%
Non-GAAP gross
margin as a
percentage of
revenues 55% 55%
GAAP operating
expenses 65,114 65,499
Stock-based
compensation
in research
and
development (983) (1,084)
Stock-based
compensation
in sales and
marketing (884) (744)
Stock-based
compensation
in general and
administrative (308) (269)
Acquisition
related
expenses - (2,655)
Amortization of
acquired
intangible
assets (2,545) (1,517)
------ ------
Non-GAAP
operating
expenses 60,394 59,230
------ ------
Non-GAAP
operating
income 30,210 21,932
====== ======
GAAP operating
margin as a
percentage of
revenues 6% 8%
Non-GAAP
operating
margin as a
percentage of
revenues 18% 15%
GAAP tax on
income 1,738 (3,501)
Deferred tax
assets
adjustments,
net (633) 5,046
---- -----
Non-GAAP tax
on income 1,105 1,545
===== =====
GAAP net income 9,644 15,725
Amortization of
acquired
intangible
assets 2,545 5,023
Expense related
to royalty
buyout
agreement with
the Office of
the Chief
Scientist 12,875 -
Stock-based
compensation
expenses 2,735 2,673
Deferred tax
assets
adjustments,
net 633 (5,046)
Inventory
write-off 1,889 -
Acquisition
related
expenses - 2,655
Non-GAAP net
income 30,321 21,030
====== ======
GAAP basic
earnings per
share 0.35 0.58
==== ====
Non-GAAP basic
earnings per
share 1.12 0.77
==== ====
GAAP diluted
earnings per
share 0.35 0.57
==== ====
Non-GAAP
diluted
earnings per
share 1.10 0.76
==== ====
Shares used for calculation of earnings
per share:
Basic 27,175 27,185
====== ======
Diluted 27,503 27,510
====== ======
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
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SOURCE Nova Measuring Instruments Ltd
