Profitability swings from $5.4 million net loss in 2008 to $2.6 million net income in 2009
Company expects significant increase in revenues and profitability in 2010
Rehovot, Israel - February 17, 2010 - 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 2009 fourth quarter and full year financial results.
Highlights for the Fourth Quarter of 2009
• Revenues of $15.2 million, up 34% sequentially and 145% from the fourth quarter of 2008
• Gross margin of 49%, up from 48% in the third quarter of 2009 and 22% in the fourth quarter of 2008
• Record quarterly GAAP net income of $2.7 million or $0.13 per diluted share
• $2.1 million positive operating cash flow
• Record quarterly bookings
Highlights for full year 2009 results
• Revenues of $39.3 million
• Gross margin of 45%, up from 33% in 2008
• Reduced operating expenses by 24% versus 2008
• GAAP net income of $2.6 million, or $0.13 per diluted share
• Significantly increased market share in all served markets
2009 Fourth Quarter Results
Total revenues for the fourth quarter of 2009 were $15.2 million, an increase of 145% relative to the fourth quarter of 2008, and an increase of 34% relative to the third quarter of 2009.
Gross margin for the fourth quarter of 2009 was 49%, compared with 22% in the fourth quarter of 2008 and 48% in the third quarter of 2009.
Operating expenses in the fourth quarter of 2009 were $4.7 million, compared with $4.4 million in the fourth quarter of 2008 and $4.0 million in the third quarter of 2009.
On a GAAP basis, the Company reported quarterly net income of $2.7 million in the fourth quarter of 2009, or $0.13 per diluted share. This compares to a GAAP net loss of $1.6 million, or $0.08 per share, for the fourth quarter of 2008, and a net income of $1.7 million, or $0.08 per diluted share, for the third quarter of 2009.
On a non-GAAP basis, which excludes stock-based compensation and other charges, the Company reported quarterly net income of $2.8 million in the fourth quarter of 2009, or $0.13 per diluted share. This compares with a non-GAAP net loss of $2.3 million, or $0.12 per share, in the fourth quarter of 2008, and non-GAAP net income of $1.8 million, or $0.09 per diluted share, in the third quarter of 2009.
The company generated $2.1 million in cash from operating activities during the fourth quarter of 2009.
2009 Full Year Results
Total revenues for 2009 were $39.3 million, as compared with total revenues of $39.0 million for 2008.
Gross margin in 2009 was 45%, as compared to 33% in 2008.
Operating expenses in 2009 were $15.1 million, as compared with $20.0 million in 2008.
On a GAAP basis, the Company reported $2.6 million net income in 2009, or $0.13 per diluted share, as compared to a net loss of $5.4 million, or $0.28 per share, in 2008.
On a non-GAAP basis, which excludes stock-based compensation and other charges, the company reported net income of $3.1 million, or $0.15 per diluted share, for 2009. This compares with a non-GAAP net loss of $4.2 million, or $0.22 per share, in 2008.
During 2009, the company used $1.8 million in cash flow for operating activities, as compared to $3.3 million cash flow used for operating activities in 2008.
Total cash reserves at the end of 2009 were $19.0 million, a decrease of $0.9 million compared to the end of 2008. On February 9, 2010, the company completed a follow-on offering of approximately 4.4 million shares. Including approximately $17 million net proceeds from the offering, the Company’s cash reserves increased to about $36 million.
Management Comments
“Fourth quarter results showed a significant sequential improvement and a very strong finish for the year as a whole”, commented Gabi Seligsohn, President and CEO of Nova. "As a result of our market share gains and improved business model, we were able to increase our annual revenues while the overall industry shrank by approximately 50% year over year. In parallel, we improved our products gross margins while reducing our operating expenses by 24% versus 2008, achieving a 7% net profit margin for the year”.
“Looking forward, we expect further growth to be driven by the improving industry fundamentals as well as the disruptive nature of our technology which is expanding our fab footprint and displacing traditional metrology techniques. While the pace of growth will require some increase in operating expenses in 2010, we expect to be able to grow profits faster than revenues, leading to an expansion of our net profit margin compared to 2009.”
Guidance for year 2010
The company’s guidance for 2010 is revenues of $58-$63 million and net profitability of 10%-14%.
The Company will host a conference call today, February 17, 2010, at 10:00am ET. To participate, please dial in the US: 1-800-994-4498; or internationally: +972-3-918-0650. A recording of the call will be available on Nova’s website, within 24 hours following the end of the call.
In addition, the conference call will also be webcast live from a link on Nova’s website at http://www.nova.co.il/.
This press release provides financial measures that exclude non-cash charges for stock-based compensation, inventory write-off and impairment charges 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 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.
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: unanticipated consequences of the global economic crisis, our dependency on a single integrated process control product line; 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; 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 31,2008 filed with the Securities and Exchange Commission on March 30, 2009. 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.