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Nova Announces Record 2013 Fourth Quarter And Full Year Results

Record Quarterly Revenues of $30.2 million And Record Yearly Revenues of $111.5 million

REHOVOT, Israel, Feb. 18, 2014 /PRNewswire/ -- Nova Measuring Instruments Ltd. (Nasdaq: NVMI), provider of leading edge standalone metrology and the market leader of integrated metrology solutions to the semiconductor process control market, today reported record 2013 fourth quarter and full year results.

Business Highlights:

  • Stand Alone driving market share gains in major foundries for Front End and Back End Etch process steps in 2X and 1X technology nodes; represented 50% of bookings in 4Q13
  • Growing deliveries of Integrated and Stand Alone tools to support 16/14nm with sequential increase from 3Q13 to 4Q13
  • Shipped first systems for 10nm R&D line to a large pure-play foundry
  • Crossed delivery mark of 250 Metrology tools for 2Xnm and below technology nodes  for all industry segments
  • Ongoing evaluations at 3 memory customers for advanced V-NAND and TSV applications
  • Received first orders for Fleet Management SW solution

Fourth Quarter and Full Year 2013 Financial Highlights:

  • Quarterly revenues of $30.2 million, up 37% from $22.1 million a year ago
  • Quarterly gross margin of 53%, up from 50% a year ago
  • Full year 2013 revenues of $111.5 million, up 16% from $96.2 million in 2012
  • Full year gross margin of 53%, similar to 2012
  • Total cash reserves of $99.7 million as of December 31, 2013, and no debt

 

GAAP Results ($K)


Q4 2013

Q3 2013

Q4 2012

FY2013

FY2012

Revenues

$30,198

$25,771

$22,098

$111,509

$96,168

Net Income

$3,077

$2,240

$2,472

$10,515

$11,828

Earnings per Diluted Share

$0.11

$0.08

$0.09

$0.38

$0.43


NON-GAAP Results ($K)


Q4 2013

Q3 2013

Q4 2012

FY2013

FY2012

Net Income

$4,055

$2,724

$1,037

$14,147

$14,211

Earnings per Diluted Share

$0.15

$0.10

$0.04

$0.52

$0.52







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 adjustments of deferred taxes, stock based compensation expenses, income from insurance claim and loss related to equipment and inventory damage.

Management Comments

"We posted record revenues for the fourth quarter and for the whole year, exceeding the high end of our quarterly revenue guidance, due to strong demand for our Optical Metrology solutions during the quarter," commented Eitan Oppenhaim, President and CEO of Nova. "Our continuous investment in R&D to strengthen our leadership position in Optical Metrology for process control is clearly paying off and leading to increased market share in this high growth market.

"We continue to outpace the industry as we grow our placement in the Foundry segment, with a presence in multiple process steps in all advanced technology nodes. Our recent market share wins, combined with a diversified and enhanced product portfolio, position us very well for a solid start in 2014. The growth of the semiconductor equipment industry is fueled by growing investments in transitioning to advanced technology nodes and complex device structures. These challenging technology transitions require additional optical metrology measurements for better process control. Nova is well positioned to benefit from these trends and to continue its growth trajectory."

2013 Fourth Quarter Results

Total revenues for the fourth quarter of 2013 were $30.2 million, an increase of 37% relative to the fourth quarter of 2012, and an increase of 17% relative to the third quarter of 2013.

Gross margin for the fourth quarter of 2013 was 53%, compared with 50% in the fourth quarter of 2012 and 51% in the third quarter of 2013.

Operating expenses in the fourth quarter of 2013 were $12.0 million, compared with $11.4 million in the fourth quarter of 2012 and $10.9 million in the third quarter of 2013.

On a GAAP basis, the company reported net income of $3.1 million, or $0.11 per diluted share, in the fourth quarter of 2013. This compares to a net income of $2.5 million, or $0.09 per diluted share, in the fourth quarter of 2012, and a net income of $2.2 million, or $0.08 per diluted share, in the third quarter of 2013.

On a Non-GAAP basis, which excludes adjustments of deferred taxes, stock based compensation expenses and loss related to equipment and inventory damage, the company reported net income of $4.1 million, or $0.15 per diluted share, in the fourth quarter of 2013. This compares to a net income of $1.0 million, or $0.04 per diluted share, in the fourth quarter of 2012, and a net income of $2.7 million, or $0.10 per diluted share, in the third quarter of 2013.

2013 Full Year Results

Total revenues for 2013 were $111.5 million, compared to total revenues of $96.1 million for 2012.

Gross margin in 2013 was 53%, compared to 53% in 2012.

Operating expenses in 2013 were $46.7 million, compared to $40.6 million in 2012.

On a GAAP basis, the company reported net income of $10.5 million in 2013, or $0.38 per diluted share. This compares to a net income of $11.8 million, or $0.43 per diluted share, in 2012.

On a Non-GAAP basis, which excludes adjustments of deferred taxes, stock based compensation expenses, income from insurance claim and loss related to equipment and inventory damage, the company reported net income $14.1 million in 2013, or $0.52 per diluted share. This compares to a net income of $14.2 million, or $0.52 per diluted share, in 2012.

During 2013, the company generated $11.0 million in cash flow from operating activities, as compared to $7.7 million cash flow generated from operating activities in 2012.

Total cash reserves at the end of 2013 were $99.7 million, compared to $91.4 million at the end of 2012.

Conference Call Information

Nova will host a conference call on Tuesday, February 18, 2014 at 8:30 a.m. Eastern Time, to discuss the fourth quarter results and future outlook, along with its guidance for the first quarter of 2014.

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: 1-877-941-1427
ISRAEL Dial-in Number: 1809-21-4368          
INTERNATIONAL Dial-in Number: 1-480-629-9664
At:
8:30 a.m. Eastern Time
5:30 a.m. Pacific Time
3:30 p.m. Israeli Time

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 the same link.

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 www.novameasuring.com.

This press release provides financial measures that exclude non-cash charges for stock-based compensation, loss related to equipment and inventory damage, income from insurance claim as well as deferred income taxes adjustments 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 PEM; 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 a single manufacturing facility; risks related to the extremely competitive market we are operation in; our dependency on a small number of large customers and small number of suppliers; 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; 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 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, 2012 filed with the Securities and Exchange Commission on March 11, 2013. 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:

Dror David, Chief Financial Officer

Nova Measuring Instruments Ltd.

Tel: +972-73-229-5833

E-mail: info@novameasuring.com

www.novameasuring.com

Investor Relations Contacts:

Hayden/ MS-IR LLC

Miri Segal

Tel: +917-607-8654

E-mail: msegal@ms-ir.com

Or

David Fore

Tel: +206-395-2711

E-mail: dave@haydenir.com

 

(Tables to Follow)

 


NOVA MEASURING INSTRUMENTS LTD.

CONSOLIDATED BALANCE SHEET

(U.S. dollars in thousands)






As of
December 31,


As of
December 31,



2013


2012






CURRENT ASSETS





    Cash and cash equivalents


17,542


15,963

Short-term interest-bearing bank deposits


79,552


75,039

Available for sale securities


1,845


--

Trade accounts receivable


27,947


17,362

Inventories


18,118


17,827

Deferred income tax assets


137


1,850

Other current assets


3,922


2,549



149,063


130,590

LONG-TERM ASSETS





Long-term interest-bearing bank deposits


750


405

Other long-term assets


230


516

Severance pay funds


1,852


1,873



2,832


2,794






FIXED ASSETS, NET


10,382


8,660






TOTAL ASSETS


162,277


142,044






CURRENT LIABILITIES





Trade accounts payable


15,599


10,819

Deferred income


3,420


4,775

Other current liabilities


11,448


8,444



30,467


24,038






LONG-TERM LIABILITIES





Liability for employee severance pay


2,798


2,806

Deferred income


341


159

Other long-term liability


7


270



3,146


3,235






SHAREHOLDERS' EQUITY


128,664


114,771






TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


162,277


142,044

 

 


NOVA MEASURING INSTRUMENTS LTD.


QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS


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










Three months ended



December 31,
2013


September 30,
2013


December 31,
2012
















REVENUES







Products

24,739


19,911


17,016


Services

5,450


5,860


5,082



30,189


25,771


22,098









COST OF REVENUES







Products

10,299


9,045


7,390


Services

4,018


3,626


3,644



14,317


12,671


11,034









GROSS PROFIT

15,872


13,100


11,064









OPERATING EXPENSES







Research and Development expenses, net

7,491


7,021


7,117


Sales and Marketing expenses

3,128


2,643


3,102


General and Administration expenses

1,350


1,256


1,191



11,969


10,920


11,410









OPERATING PROFIT (LOSS)

3,903


2,180


(346)









INTEREST INCOME, NET

60


257


337









INCOME (LOSS) BEFORE INCOME TAXES

3,963


2,437


(9)









    INCOME TAX  BENEFIT (EXPENSES)

(886)


(197)


2,481









NET INCOME FOR THE PERIOD

3,077


2,240


2,472























Earnings per share:







       Basic

0.11


0.08


0.09


       Diluted

0.11


0.08


0.09









Shares used for calculation of earnings per share:







       Basic

27,268


27,237


26,679


       Diluted

27,548


27,503


27,317









 

 


NOVA MEASURING INSTRUMENTS LTD.

ANNUAL CONSOLIDATED STATEMENTS OF OPERATIONS

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








Year ended



December 31, 2013


December 31, 2012






REVENUES





Products


89,410


77,212

Services


22,099


18,956



111,509


96,168






COST OF REVENUES





Products


37,765


31,734

Services


14,673


13,280



52,438


45,014






GROSS PROFIT


59,071


51,154






OPERATING EXPENSES





Research & Development expenses, net


29,578


24,594

Sales & Marketing expenses


11,963


11,998

General & Administration expenses


5,197


3,978



46,738


40,570






OPERATING PROFIT


12,333


10,584






INTEREST INCOME, NET


693


1,368






INCOME BEFORE INCOME TAXES


13,026


11,952






    INCOME TAX EXPENSES


2,511


124






NET INCOME FOR THE YEAR


10,515


11,828











Net income per share:





       Basic


0.39


0.44

       Diluted


0.38


0.43











Shares used for calculation of net income per share:





       Basic   


27,091


26,619

       Diluted 


27,373


27,277

 

 


NOVA MEASURING INSTRUMENTS LTD.

QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)










Three months ended



December 31,

2013


September 30,

2013


December 31,

2012








CASH FLOW – OPERATING ACTIVITIES














Net income for the period


3,077


2,240


2,472

 

Adjustments to reconcile net income to net cash

   provided by operating activities:













       Depreciation and amortization


945


907


858

       Loss related to equipment and inventory damage


-


-


509

       Amortization of deferred stock-based compensation


518


368


609

       Increase (decrease) in liability for employee

           termination benefits, net


 

(37)


 

(1)


 

104

       Deferred income taxes


460


116


(1,806)

       Increase in trade accounts receivables


(7,118)


(1,112)


(2,461)

       Decrease (increase) in inventories


(1,950)


144


143

       Decrease (increase) in other current

          and long term Assets


(291)


 

(1,064)


250

       Increase (decrease) in trade accounts  payables

          and other long-term liabilities


 

4,489


 

250


 

(2,392)

       Increase in other current liabilities


1,600


614


414

       Increase (decrease) in short and long term

          deferred income


(234)


793


207

Net cash provided by (used in) operating activities


1,459


3,255


(1,093)








CASH FLOW – INVESTMENT ACTIVITIES














Decrease (increase) in short-term interest-bearing

     bank deposits


 

4,367


 

(4,548)


 

(18,110)

Decrease (increase) in long-term interest-bearing

     bank deposits


 

(345)


 

-


 

140

Investment in short-term available for sale securities


(1,845)


-


-

Proceeds from short-term held to maturity securities


-


-


1,554

Additions to fixed assets


(1,974)


(761)


(1,512)

Net cash provided by (used in) investment activities


203


(5,309)


(17,928)








CASH FLOW – FINANCING ACTIVITIES














Shares issued under employee share-based plans


123


12


12

Net cash provided by financing activities


123


12


12








Increase (decrease) in cash and cash equivalents


1,785


(2,042)


(19,009)

Cash and cash equivalents – beginning of period


15,757


17,799


34,972

Cash and cash equivalents – end of period


17,542


15,757


15,963

 

 


NOVA MEASURING INSTRUMENTS LTD.

ANNUAL CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)








Year ended



December 31, 2013


December 31, 2012

CASH FLOW – OPERATING ACTIVITIES










Net income for the year


10,515


11,828

 

Adjustments to reconcile net income to net cash

    provided by operating activities:










         Depreciation and amortization


3,522


2,783

         Loss related to equipment and inventory damage


148


509

         Amortization of deferred stock-based compensation


2,095


1,927

         Increase (decrease) in liability for employee

            termination benefits, net


 

17


 

(27)

         Deferred income taxes


1,898


694

         Increase in trade accounts receivables


(10,585)


(3,960)

         Increase in inventories


(1,783)


(10,513)

         Increase in other current and long term assets


(1,234)


(467)

         Increase in trade accounts payables and other

            long term liabilities


 

4,517


 

2,510

         Increase in other current liabilities


3,054


283

         Increase (decrease) in short and long term deferred income


(1,173)


2,151

Net cash provided by operating activities


10,991


7,718






CASH FLOW – INVESTMENT ACTIVITIES










Increase in short-term interest-bearing bank deposits


(4,513)


(8,792)

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


(345)


140

Investment in short-term available for sale securities


(1,845)


-

Proceeds from short-term held to maturity securities


-


1,582

Reimbursement from insurance claim


219


-

Additions to fixed assets


(4,119)


(3,660)

Net cash used in investment activities


(10,603)


(10,730)






CASH FLOW – FINANCING ACTIVITIES










Shares issued under employee share-based plans


1,191


259

Net cash provided by financing activities


1,191


259






Increase (decrease) in cash and cash equivalents


1,579


(2,753)

Cash and cash equivalents – beginning of period


15,963


18,716

Cash and cash equivalents – end of period


17,542


15,963

 

 

DISCLOSURE OF NON-GAAP NET INCOME

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










Three months ended



December 31,


September 30,


December 31,



2013


2013


2012








GAAP Net income for the period


3,077


2,240


2,472








Non-GAAP Adjustments:







Stock based compensation expenses


518


368


609

Deferred income tax expenses (benefit)


460


116


(2,553)

Loss related to equipment and inventory damage


-


-


509








Non-GAAP Net income for the period


4,055


2,724


1,037








Non-GAAP Net income per share:







Basic


0.15


0.10


0.04

Diluted


0.15


0.10


0.04








Shares used for calculation of Non-GAAP net income per share:







Basic


27,268


27,237


26,679

Diluted


27,548


27,503


27,317



















Year ended





December 31,


December 31,





2013


2012








GAAP Net income for the year




10,515


11,828








Non-GAAP Adjustments:







Stock based compensation expenses




2,095


1,927

Deferred income taxes expenses (income)




1,898


(53)

Income from insurance claim




(509)


-

Loss related to equipment and inventory damage




148


509








Non-GAAP Net income for the year




14,147


14,211








Non-GAAP Net income per share:







Basic




0.52


0.53

Diluted




0.52


0.52








Shares used for calculation of Non-GAAP net income per share:







Basic




27,091


26,619

Diluted




27,373


27,277

 

SOURCE Nova Measuring Instruments Ltd.

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