Record Bookings Reflect Strong Business Momentum Across all Product Lines; Accelerating Standalone Customer Penetration Further Strengthens Market Position and OutlookREHOVOT, Israel, November 2, 2010 — (PRNewswire) — 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 third quarter financial results.
Highlights for the Third Quarter of 2010 - Record revenues of $24.2 million - Record gross margins of 56% - Record net income of $7.3 million, or $0.27 per diluted share; net margin of 30% - $7.9 million positive operating cash flow; strong balance sheet with cash reserves of $54.8 million
"Q3 was another excellent quarter, with record performance achieved in all aspects of our business", said Gabi Seligsohn, President and CEO of Nova. "During the quarter we also continued to execute on our strategy of expanding our customer base with the stand alone metrology product line, adding two new foundry customers and one new memory customer. We expect to recognize most of the related revenues at the beginning of 2011."
"On the integrated metrology front, we continued to enjoy record business volumes with many fabs ordering and installing dozens of tools per fab. Given the significant challenges experienced in design rule shrink in all our served markets, the extent by which integrated metrology is being deployed is the highest it has ever been. Meanwhile, we successfully started the proliferation of our latest integrated metrology product, the Nova i500, and continued the delivery of the Nova T500 stand alone tool. We believe that the combination of new products and the recent customer design wins will support further growth in the future."
2010 Fourth Quarter and Annual Guidance
For the fourth quarter of 2010, management expects revenues of $24.5-$26 million, with net profitability of 26%-29%.
In terms of the company's existing 2010 annual guidance, of revenues of $78-$85 million and net profitability of 21%-24%, management expects to reach or slightly exceed the top-end of this guidance.
2010 Third Quarter Results
Total revenues for the third quarter of 2010 were $24.2 million, an increase of 112% relative to the third quarter of 2009, and an increase of 25% relative to the second quarter of 2010.
Gross margin for the third quarter of 2010 was 56%, compared with 48% in the third quarter of 2009, and 54% in the second quarter of 2010.
Operating expenses in the third quarter of 2010 were $6.4 million, compared with $4.0 million in the third quarter of 2009, and $5.8 million in the second quarter of 2010.
The company reported net income of $7.3 million, or $0.27 per diluted share, in the third quarter of 2010. This compares to a net income of $1.7 million, or $0.08 per share, in the third quarter of 2009, and a net income of $4.7 million, or $0.18 per diluted share, in the second quarter of 2010.
The company generated $7.9 million in cash from operating activities during the third quarter of 2010, and total cash reserves at the end of the third quarter of 2010 were $54.8 million.
The Company will host a conference call today, November 2, 2010, at 10:00am ET. To participate, please dial in the US: 1 866 850 2201; in Israel: 03 721 9510 or internationally: +1 212 444 0482. 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.
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.
NOVA MEASURING INSTRUMENTS LTD. CONSOLIDATED BALANCE SHEET (U.S. dollars in thousands) As of As of September 30, December 31, 2010 2009 CURRENT ASSETS Cash and cash equivalents 10,977 9,861 Short-term interest-bearing bank deposits 43,228 8,607 Trade accounts receivable 12,523 11,545 Inventories 10,041 3,949 Other current assets 3,088 1,728 79,857 35,690 LONG-TERM ASSETS Long-term interest-bearing bank deposits 570 561 Other Long-term assets 167 142 Severance pay funds 2,525 2,368 3,262 3,071 FIXED ASSETS, NET 2,422 2,163 Total assets 85,541 40,924 CURRENT LIABILITIES Trade accounts payable 8,644 3,715 Deferred income 5,115 1,671 Other current liabilities 6,801 5,237 20,560 10,623 LONG-TERM LIABILITIES Liability for employee severance pay 3,478 3,168 Deferred income 1,502 183 Other long-term liability 26 35 5,006 3,386 SHAREHOLDERS' EQUITY 59,975 26,915 Total liabilities and shareholders' equity 85,541 40,924 NOVA MEASURING INSTRUMENTS LTD. QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. dollars in thousands, except per share data) Three months ended September 30, June 30, September 30, 2010 2010 2009 REVENUES Product sales 20,350 15,889 8,717 Services 3,860 3,551 2,677 24,210 19,440 11,394 COST OF REVENUES Products 8,182 6,554 3,699 Services 2,542 2,452 2,191 10,724 9,006 5,890 GROSS PROFIT 13,486 10,434 5,504 OPERATING EXPENSES Research & Development expenses, net 2,783 2,828 1,850 Sales & Marketing expenses 2,810 2,242 1,523 General & Administration expenses 795 679 594 6,388 5,749 3,967 OPERATING PROFIT 7,098 4,685 1,537 Interest income, net 176 24 153 NET INCOME FOR THE PERIOD 7,274 4,709 1,690 Net income per share: Basic 0.29 0.19 0.09 Diluted 0.27 0.18 0.08 Shares used for calculation of net income per share: Basic 25,008 24,808 19,417 Diluted 26,478 26,406 19,942 NOVA MEASURING INSTRUMENTS LTD. YEAR TO DATE CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. dollars in thousands, except per share data) Nine-months ended September 30, September 30, 2010 2009 REVENUES Product sales 49,140 16,993 Services 10,491 7,085 59,631 24,078 COST OF REVENUES Product sales 20,214 7,333 Services 7,383 6,554 27,597 13,887 GROSS PROFIT 32,034 10,191 OPERATING EXPENSES Research & Development expenses, net 8,165 4,816 Sales & Marketing expenses 7,248 3,989 General & Administration expenses 2,125 1,581 17,538 10,386 OPERATING PROFIT (LOSS) 14,496 (195) INTEREST INCOME, NET 186 132 NET INCOME (LOSS) FOR THE PERIOD 14,682 (63) Net income (loss) per share: Basic 0.61 (0.00) Diluted 0.57 Shares used for calculation of net income (loss) per share: Basic 24,182 19,391 Diluted 25,540 NOVA MEASURING INSTRUMENTS LTD. QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars in thousands) Three months ended September 30, June 30, September 30, 2010 2010 2009 CASH FLOW - OPERATING ACTIVITIES Net income for the period 7,274 4,709 1,690 Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 354 323 311 Amortization of deferred stock-based compensation 215 122 130 Increase (decrease) in liability for employee termination benefits, net (10) 105 (2) Net recognized gains on investments -- -- 4 Decrease (increase) in trade (1,670) 67 (622) accounts receivables Decrease (increase) in inventories (2,065) (1,855) 790 Decrease (Increase) in other short and long term assets (776) (388) 45 Increase (decrease) in trade accounts payables 2,095 289 (662) Increase in other current and long-term liabilities 1,738 1,130 1,039 Increase (decrease) in short and long term deferred income 746 1,769 (857) Net cash from operating activities 7,901 6,271 1,866 CASH FLOW - INVESTMENT ACTIVITIES Increase in short-term interest-bearing bank deposits (3,934) (10,701) -- Proceeds from long-term interest-bearing bank deposits -- -- 4,595 Investments in long-term deposits -- -- (2) Additions to fixed assets (453) (307) (72) Net cash from (used in) investment Activities (4,387) (11,008) 4,521 CASH FLOW - FINANCING ACTIVITIES Shares issued under employee share-based plans 625 51 -- Shares issued in public offering -- -- 142 Net cash from financing activities 625 51 142 Increase (decrease) in cash and cash Equivalents 4,139 (4,686) 6,529 Cash and cash equivalents - beginning of period 6,838 11,524 9,017 Cash and cash equivalents - end of period 10,977 6,838 15,546 NOVA MEASURING INSTRUMENTS LTD. YEAR TO DATE CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars in thousands) Nine months ended September September 30, 2010 30, 2009 CASH FLOW - OPERATING ACTIVITIES Net income (loss) for the period 14,682 (63) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,001 907 Amortization of deferred stock-based 453 336 compensation Increase in liability for employee termination benefits, net 143 28 Increase in trade accounts receivables (978) (2,819) Decrease (increase) in inventories (6,187) 1,946 Decrease (increase) in other current and long term assets (1,423) 134 Increase (decrease) in trade accounts payables and other long term liabilities 4,929 (1,964) Increase (decrease) in current liabilities 1,762 (600) Increase (decrease) in short and long term deferred income 4,763 (1,795) Net cash from (used in) operating activities 19,145 (3,890) CASH FLOW - INVESTMENT ACTIVITIES Decrease (increase) in short-term interest-bearing bank deposits (34,621) 50 Proceeds from (investment in) long-term Deposits (9) 19 Additions to fixed assets (1,165) (100) Net cash used in investment activities (35,795) (31) CASH FLOW - FINANCING ACTIVITIES Shares issued under employee share-based Plans 798 142 Shares issued in public offering 16,968 -- Net cash from financing activities 17,766 142 Increase (decrease) in cash and cash Equivalents 1,116 (3,779) Cash and cash equivalents - beginning of Period 9,861 19,325 Cash and cash equivalents - end of period 10,977 15,546 Company Contact: Dror David, Chief Financial Officer Nova Measuring Instruments Ltd. Tel: +972-8-938-7505 E-mail: email@example.com http://www.nova.co.il Investor relations Contacts: Ehud Helft / Kenny Green CCG Investor Relations Tel: +1-646-201-9246 E-mail: firstname.lastname@example.org