Continued business momentum and operational excellence lead to sustained profitability
Rehovot, Israel - May 4, 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 2010 first quarter financial results.
Highlights for the first quarter of 2010
• Total revenues of $16.0 million
• Record level gross margins of 51%
• GAAP net income of $2.7 million, or $0.11 per diluted share
• $5.0 million positive operating cash flow
• New stand alone products gaining market traction
2010 First Quarter Results
Total revenues for the first quarter of 2010 were $16.0 million, an increase of 179% from the first quarter of 2009, and an increase of 5% from the fourth quarter of 2009.
Gross margin for the first quarter of 2010 was 51%, compared with 33% in the first quarter of 2009, and 49% in the fourth quarter of 2009.
Operating expenses in the first quarter of 2010 were $5.4 million, compared with $3.5 million in the first quarter of 2009, and $4.7 million in the fourth quarter of 2009.
On a GAAP basis, the company reported net income of $2.7 million, or $0.11 per diluted share, in the first quarter of 2010. This compares to a net loss of $1.7 million, or $0.09 per share, in the first quarter of 2009, and net income of $2.7 million, or $0.13 per diluted share, in the fourth quarter of 2009.
On a non-GAAP basis, which excludes stock-based compensation expenses, the company reported net income of $2.8 million, or $0.12 per diluted share, in the first quarter of 2010. This compares to a non-GAAP net loss of $1.6 million, or $0.08 per share, in the first quarter of 2009, and a non-GAAP net income of $2.8 million, or $0.13 per diluted share, in the fourth quarter of 2009.
The company generated $5.0 million in cash from operating activities during the first quarter of 2010, and total cash reserves as of March 31, 2010 were $40.7 million.
Management Comments
“During the first quarter, we reached record quarterly shipment levels and again achieved solid financial performance, through our strong position in new industry expansion projects and through our ability to provide additional functionality and value to our existing products”, commented Gabi Seligsohn, President and CEO of Nova. “In addition, our service business regained momentum, and presented 19% increase in revenues and improved gross margins”.
“Semiconductor business fundamentals continue to be strong at the high end of technology and our leading edge customers have indicated that demand is expected to continue to be robust throughout the year. Given the pace of technology transition, several customers are actively evaluating our new stand alone products, and we believe these evaluations lay the foundation for additional business growth in the future and for further improvement of our competitive position in our core markets”.
“The memory side of the business is performing better than it did three months ago. In addition, we currently have better visibility on new fab build-outs and expansions, and we believe we are very well positioned to address these opportunities. Based on these developments, we think it is appropriate to raise our guidance for the year”.
Revised Guidance for 2010
The company’s revised revenue guidance for 2010 is $61-$66 million. Based on this revenue guidance, the company is also guiding to net profitability of 13%-17% for 2010.
The Company will host a conference call today, May 4, 2010, at 9:00am ET. To participate, please dial in the US: 1 866 850 2201; or internationally: +972 3 721 9510. 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/.
This press release provides financial measures that exclude non-cash charges for stock-based compensation 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: 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; unanticipated consequences of the global economic crisis 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.