NVMI Nova Ltd

REHOVOTH, Israel, April 11 /PRNewswire-FirstCall/ -- Nova Measuring Instruments, Ltd. (NASDAQ:NVMI), the market leader in integrated measurement and process control for the semiconductor industry, today announced results for the fourth quarter and full year 2005 (the comparable figures below are 2004 restated figures). Total revenues for the fourth quarter of 2005 were $8.8 million, an 11% decrease relative to revenues of $10.0 million of the fourth quarter of 2004 and a 1% sequential decrease relative to revenues of $8.9 million for the third quarter of 2005. Total revenues for 2005 were $30.1 million, an 18% decrease relative to revenues of $36.8 million in 2004. Net loss for the fourth quarter of 2005 was $1.5 million, or $0.10 per share, compared with a net loss of $0.3 million, or $0.02 per share, for the fourth quarter of 2004 and net loss of $1.0 million, or $0.06 per share, for the third quarter of 2005. Net loss in 2005 was $8.4 million, or $0.55 per share, compared to net loss of $1.4 million, or $0.09 per share, in 2004. Cash reserves at the end of 2005 were $22.8 million, a decrease of $1.2 million compared to the third quarter of 2005. "During 2005 we focused on building our product portfolio, strengthening our customer relations with leading process equipment and semiconductor manufacturers, and on expanding our global infrastructure. During the first quarter of 2006 we began to see positive changes in market conditions. The bookings stream has increased relative to the previous quarters, including orders for delivery in the following quarters, and we expect moderate growth in the following quarters." said Dr. Giora Dishon, President and CEO. "In addition, during the first quarter of 2006, we have continued successfully the proliferation of our new NovaScan 3090 product series, as stand-alone and integrated metrology for CMP and Optical CD applications. We have received positive demand through our process equipment manufacturers and from major end-users for this new product series and we expect increases in deliveries of the NovaScan 3090 in the following quarters," continued Dr. Dishon. Restated financial results for year 2004 The company also announced that it has completed the restatement of the financial results for the fiscal year ended December 31, 2004, which was announced during February 2006. The restatement relates to recognition of revenues, in transactions that included an upgrade or trade-in option, which did not comply with generally accepted accounting principles. The restated revenues for year 2004 are $36.8 million, compared to previously reported revenues of $40.9 million. The restated net loss for year 2004 is $1.4 million, or ($0.09) per share, compared to previously reported net profit of $1.5 million, or $0.10 per share. The majority of the $4.1 million in revenues improperly recognized in 2004 is expected to be recognized during 2006 (some already in Q1/06), as the upgrades and trade-in options are fulfilled or expire. In addition to restating its financial statements for 2004, the company also corrected its previously published results for the first three quarters of 2005, which resulted in a $0.2 million reduction of revenues for the nine months ended September 30, 2005. These corrections related mainly to year 2004 restatement issues, as well as a correction to the method of apportioning revenues from extended warranty contracts relating to the first quarter of 2005. Commenting on the restated results and corrections, Mr. Dror David, CFO, noted, "In the last two months we have been working intensively to conclude the review of prior years, and our auditors have completed their audit on the restatement of year 2004 and their review on the quarterly corrections of 2005. We appreciate the dedication of our financial team and the Audit Committee of the Board of Directors in resolving the restatement issues as promptly as possible. We are confident we improved our control measures, and are pleased that we are now able to focus our full attention on realizing our business objectives and continuing our growth." The full financial statements for 2004, as restated, are attached as an Exhibit to the Current Report on Form 6-K furnished by the Company to the Securities and Exchange Commission, and are also available on Nova's website at nova_restated_year_2004. The restated quarterly results of 2004 and the corrected quarterly results of 2005 are available on the company's website at nova_quarterly_adjustments. The company intends to file an Amended Annual Report on Form 20-F for the year ended December 31, 2004 as soon as practicable, and Annual Report on Form 20-F for the year ended December 31, 2005 in June 2006. The Company will host a conference call on April 11, 2006, at 12:00 EST. To participate please dial in the US: +1-866-500-4964 or internationally: +972-3-925-5910 at least 5 minutes before the start of the call. About Nova Nova Measuring Instruments Ltd. Develops, designs and produces integrated process control systems in the semiconductor manufacturing industry. Nova provides a broad range of integrated process control solutions that link between different semiconductor processes and process equipment. The Company's website is http://www.nova.co.il/. This press release contains forward-looking statements relating to future events or our future performance and 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 ability to successfully complete our review of our financial statements and results, the discovery of additional accounting irregularities, the outcome of our investigation into accounting irregularities, our ability to implement improvements to our internal controls and procedures to prevent similar accounting irregularities in the future, 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 and changes in customer demand for our products. 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, 2004 filed with the Securities and Exchange Commission on June 28, 2005. 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. Quarterly Consolidated Statements of Operations (US dollars in thousands, except per share data) Q4-2005 Q4-2004 Q3-2005 (As restated) (Corrected) REVENUES Product sales 6,601 8,503 6,658 Services 2,236 1,452 2,244 8,837 9,955 8,902 COST OF REVENUES Product sales 2,939 3,733 3,313 Services 2,152 1,782 2,156 5,091 5,515 5,469 GROSS PROFIT 3,746 4,440 3,433 OPERATING EXPENSES Research & Development expenses, net 2,280 2,370 1,990 Sales & Marketing expenses 2,007 1,898 1,510 General & Administration expenses 1,089 642 1,068 5,376 4,910 4,568 OPERATING LOSS 1,630 470 1,135 INTEREST INCOME, NET 105 180 133 NET LOSS 1,525 290 1,002 Loss per share 0.10 0.02 0.06 Shares used for calculation of loss per share 15,457 15,309 15,453 Nova Measuring Instruments Ltd. Consolidated Statements of Operations (U.S. dollars in thousands, except per share data) Year ended December 31, 2005 2004 2003 (As restated) REVENUES Product sales 21,985 29,274 21,152 Services 8,157 7,532 5,536 30,142 36,806 26,688 COST OF REVENUES Product sales 11,413 14,396 10,270 Services 7,893 6,715 6,265 19,306 21,111 16,535 GROSS PROFIT 10,836 15,695 10,153 OPERATING EXPENSES Research and development expenses, net 9,301 8,665 8,561 Sales and marketing expenses 6,950 6,647 6,534 General and administrative expenses 3,626 2,331 1,898 Other operating income - - (2,203) 19,877 17,643 14,790 OPERATING LOSS 9,041 1,948 4,637 INTEREST INCOME, NET 627 528 425 NET LOSS FOR THE YEAR 8,414 1,420 4,212 Loss per share 0.55 0.09 0.28 Shares used in calculation of loss per share 15,437 15,259 14,994 Nova Measuring Instruments Ltd. Consolidated Balance Sheet (U.S. dollars in thousands) As of December 31, 2005 2004 (As restated) CURRENT ASSETS Cash and cash equivalents 5,776 12,171 Short-term interest-bearing bank deposits 1,206 1,916 Short-term investments 3,500 - Held to maturity securities 4,388 8,583 Trade accounts receivable, net 6,841 6,850 Inventories 6,606 6,354 Other current assets 1,141 1,169 29,458 37,043 LONG-TERM ASSETS Long-term interest-bearing bank deposits 2,974 2,145 Held to maturity securities 4,952 5,989 Other Long-term assets 262 382 Severance pay funds 2,186 2,288 10,374 10,804 FIXED ASSETS, NET 2,507 2,119 Total assets 42,339 49,966 CURRENT LIABILITIES Trade accounts payable 5,744 4,795 Other current liabilities 8,880 6,539 14,624 11,334 LONG-TERM LIABILITIES Liability for employee termination benefits 2,907 3,075 Deferred income 1,264 3,831 Other long-term liability 100 145 4,271 7,051 SHAREHOLDERS' EQUITY Ordinary shares 46 46 Additional paid-in capital 73,636 73,333 Accumulated other comprehensive income (18) 8 Accumulated deficit (50,220) (41,806) Total shareholders' equity 23,444 31,581 Total liabilities and shareholders' equity 42,339 49,966 Company Contact: Dror David, Chief Financial Officer Nova Measuring Instruments Ltd. Tel: +972-8-938-7505 E-mail: http://www.nova.co.il/ Investor relations Contacts: Ehud Helft / Kenny Green GK Investor Relations Tel: +1-866-704-6710 E-mail: DATASOURCE: Nova Measuring Instruments, Ltd CONTACT: Company Contact: Dror David, Chief Financial Officer, Nova Measuring Instruments Ltd., Tel: +972-8-938-7505, E-mail: . Investor relations Contacts: Ehud Helft / Kenny Green, GK Investor Relations, Tel: +1-866-704-6710, E-mail: ,

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