NVMI Nova Ltd

22% Sequential Revenue Increase and Improvement in all Other Metrics; Significant Increase in Bookings Leading to Stronger Financial Results in Second Half of 2009 REHOVOT, Israel, August 4 /PRNewswire-FirstCall/ -- 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 second quarter financial results. Highlights for the Second Quarter of 2009 - Total revenues of $7 million, up 22% sequentially - Gross margins of 41%, up from 33% in the first quarter of 2009, resulting from improved services gross margins - Breakeven Non-GAAP net results; GAAP net loss of $0.1 million - Significant market share gains and all time record bookings for the Stand Alone Optical CD product line 2009 Second Quarter Results Total revenues for the second quarter of 2009 were $7.0 million, a decrease of 37% relative to the second quarter of 2008, and an increase of 22% relative to the first quarter of 2009. Gross margin for the second quarter of 2009 was 41%, compared with 39% in the second quarter of 2008 and 33% in the first quarter of 2009. Operating expenses in the second quarter of 2009 were $3.0 million, compared with $5.7 million in the second quarter of 2008, and $3.5 million in the first quarter of 2009. On a GAAP basis, the company reported a net loss of $0.1 million in the second quarter of 2009. This compares to a net loss of $1.3 million, or $0.07 per share, for the second quarter of 2008, and a net loss of $1.7 million, or $0.09 per share, for the first quarter of 2009. On a non-GAAP basis, which excludes stock-based compensation and impairment charges, the company reported breakeven results for the second quarter of 2009. This compares with a non-GAAP net loss of $0.5 million, or $0.02 per share, in the second quarter of 2008, and a non-GAAP net loss of $1.6 million, or $0.08 per share, in the first quarter of 2009. The company used $2.1 million for operating activities during the second quarter of 2009, mostly related to an increase in accounts receivables due to the increase in revenues. Total cash reserves at the end of the second quarter of 2009 were $14.2 million. Management Comments "By all measures, second quarter results showed excellent improvement," said Gabi Seligsohn, President and CEO of Nova. "In addition, recent increase in business volumes and improved order patterns will enable us to show significant improvement in our financial performance in the second half of the year". "Continued market share gains in both the Stand Alone Optical CD and the IM Copper CMP segments, combined with our effective cost control measures, enabled us to increase revenues and reach breakeven results for the quarter. Looking forward, sales of both our Integrated and Stand Alone solutions are well-positioned for further growth, because they enable cost-effective migration to lower technology nodes, while still using existing process equipment". The Company will host a conference call today, August 4, 2009, at 9:00am ET. To participate, please dial in the US: 1-888-668-9141; or internationally: +972-3-918-0610. 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, amortization of intangibles 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. NOVA MEASURING INSTRUMENTS LTD. CONSOLIDATED BALANCE SHEET (U.S. dollars in thousands) As of June 30 As of December 31, 2009 2008 CURRENT ASSETS Cash and cash equivalents 9,017 19,325 Short-term interest-bearing bank deposits 46 97 Short-term investments 4,599 -- Trade accounts receivable 4,980 2,783 Inventories 5,505 6,862 Other current assets 1,301 1,086 25,448 30,153 LONG-TERM ASSETS Long-term interest-bearing bank deposits 524 544 Other Long-term assets 126 157 Severance pay funds 2,140 2,141 2,790 2,842 FIXED ASSETS, NET 2,429 2,796 Total assets 30,667 35,791 CURRENT LIABILITIES Trade accounts payable 2,178 3,480 Deferred income 1,611 2,385 Other current liabilities 2,494 4,042 6,283 9,907 LONG-TERM LIABILITIES Liability for employee severance pay 3,114 3,152 Deferred income 187 351 Other long-term liability 40 40 3,341 3,543 SHAREHOLDERS' EQUITY 21,043 22,341 Total liabilities and shareholders' equity 30,667 35,791 NOVA MEASURING INSTRUMENTS LTD. QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. dollars in thousands, except per share data) Three months ended June 30, March 31, June 30, 2009 2009 2008 REVENUES Product sales 4,631 3,645 7,496 Services 2,333 2,075 3,594 6,964 5,720 11,090 COST OF REVENUES Product sales 2,050 1,582 3,524 Services 2,091 2,274 3,250 4,141 3,856 6,774 GROSS PROFIT 2,823 1,864 4,316 OPERATING EXPENSES Research & Development 1,183 1,783 2,177 expenses, net Sales & Marketing expenses 1,293 1,173 2,042 General & Administration 484 503 797 expenses Impairment loss on equipment related to Hypernex assets and liabilities acquisition -- -- 633 2,960 3,459 5,649 OPERATING LOSS (137) (1,595) (1,333) INTEREST INCOME (EXPENSES), NET 43 (64) 66 NET LOSS FOR THE PERIOD (94) (1,659) (1,267) Basic net loss per share (0.00) (0.09) (0.07) Shares used for calculation of basic net loss per share 19,378 19,378 19,378 NOVA MEASURING INSTRUMENTS LTD. YEAR TO DATE CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. dollars in thousands, except per share data) Six-months ended June 30, 2009 June 30, 2008 REVENUES Product sales 8,276 17,110 Services 4,408 6,791 12,684 23,901 COST OF REVENUES Product sales 3,632 8,012 Services 4,365 6,407 7,997 14,419 GROSS PROFIT 4,687 9,482 OPERATING EXPENSES Research & Development expenses, net 2,966 4,082 Sales & Marketing expenses 2,466 4,482 General & Administration expenses 987 1,701 Impairment loss on equipment related to Hypernex assets and liabilities acquisition -- 633 6,419 10,898 OPERATING LOSS (1,732) (1,416) INTEREST INCOME (EXPENSES), NET (21) 190 NET LOSS FOR THE PERIOD (1,753) (1,226) Basic net loss per share (0.09) (0.06) Shares used for calculation of basic net loss per share 19,378 19,356 NOVA MEASURING INSTRUMENTS LTD. QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars in thousands) Three months ended June 30, March 31, June 30, 2009 2009 2008 CASH FLOW - OPERATING ACTIVITIES Net loss for the period (94) (1,659) (1,267) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 276 320 315 Amortization of deferred stock-based compensation 100 106 155 Increase (decrease) in liability for Employee termination benefits, net 144 (114) 68 Impairment loss on equipment -- -- 633 Net recognized losses (gains) on investments (4) -- 2 Decrease (increase) in trade accounts receivables (2,441) 244 3,331 Decrease in inventories 636 520 228 Decrease (increase) in other current and long term assets (608) 697 758 Decrease in trade accounts payables (102) (1,200) (2,415) Decrease in current liabilities (2) (1,637) (974) Increase (decrease) in short and long term deferred income (44) (894) 722 Net cash from (used in) operating Activities (2,139) (3,617) 1,557 CASH FLOW - INVESTMENT ACTIVITIES Decrease (increase) in short-term interest-bearing bank deposits -- 50 (72) Increase in short-term investments -- (4,595) -- Proceeds from held to maturity securities -- -- 11,068 Proceeds (investments) in long-term Deposits 141 (120) 696 Investment in held to maturity securities -- -- (9,654) Additions to fixed assets (24) (4) (183) Net cash from (used in) investment activities 117 (4,669) 1,855 CASH FLOW - FINANCING ACTIVITIES -- -- -- Increase (decrease) in cash and cash equivalents (2,022) (8,286) 3,412 Cash and cash equivalents - beginning of period 11,039 19,325 10,332 Cash and cash equivalents - end of period 9,017 11,039 13,744 NOVA MEASURING INSTRUMENTS LTD. YEAR TO DATE CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars in thousands) Six months ended June 30, 2009 June 30, 2008 CASH FLOW - OPERATING ACTIVITIES Net loss for the period Adjustments to reconcile net loss to net cash used in operating activities: (1,753) (1,226) Depreciation and amortization 596 682 Amortization of deferred stock-based Compensation 206 319 Increase in liability for employee termination benefits, net 30 127 Impairment loss on equipment -- 633 Net recognized losses (gains) on investments (4) 13 Decrease (increase) in trade accounts Receivables (2,197) 4,106 Decrease (increase) in inventories 1,156 (1,131) Decrease (increase) in other current and long term assets 89 (107) Decrease in trade accounts payables and other long term liabilities (1,302) (3,067) Decrease in current liabilities (1,639) (1,199) Increase (decrease) in short and long term deferred income (938) 553 Net cash used in operating activities (5,756) (297) CASH FLOW - INVESTMENT ACTIVITIES Decrease (increase) in short-term interest-bearing bank deposits 50 (72) Increase in short-term investments (4,595) -- Proceeds from held to maturity securities -- 13,273 Proceeds from long-term deposits 21 1,634 Investment in held to maturity securities -- (15,390) Additions to fixed assets (28) (740) Net cash used in investment activities (4,552) (1,295) CASH FLOW - FINANCING ACTIVITIES Shares issued in private placement -- -- Shares issued under employee share-based plans -- 12 Net cash from financing activities -- 12 Decrease in cash and cash equivalents (10,308) (1,580) Cash and cash equivalents - beginning of period 19,325 15,324 Cash and cash equivalents - end of period 9,017 13,744 NOVA MEASURING INSTRUMENTS LTD. DISCLOSURE OF NON-GAAP NET INCOME (LOSS) (U.S. dollars in thousands, except per share data) Three months ended June 30, March 31, June 30, 2009 2009 2008 GAAP Net income loss for the period (94) (1,659) (1,267) Non-GAAP Adjustments: Stock based compensation expenses 100 106 155 Impairment loss on equipment related to Hypernex assets and liabilities acquisition -- -- 633 Non-GAAP Net income (loss) for the period 6 (1,553) (479) Non-GAAP net income (loss) per share: Basic 0.00 (0.08) (0.02) Diluted 0.00 Shares used for calculation of non-GAAP net income (loss) per share: Basic 19,378 19,378 19,378 Diluted 19,715 Six months ended June 30, June 30, 2009 2008 GAAP Net loss for the period (1,753) (1,226) Non-GAAP Adjustments: Stock based compensation expenses 206 319 Impairment loss on equipment related to Hypernex assets and liabilities acquisition -- 633 Non-GAAP Net loss for the period (1,547) (274) Non-GAAP basic net loss per share: (0.08) (0.01) Shares used for calculation of non-GAAP basic net loss per share 19,378 19,356 http://www.nova.co.il/ Company Contact: Dror David, Chief Financial Officer Tel: 972-8-938-7505 E-mail: Investor relations Contacts: Ehud Helft / Kenny Green Nova Measuring Instruments Ltd. GK Investor Relations Tel: +1-646-201-9246 E-mail: DATASOURCE: Nova Measuring Instruments Ltd CONTACT: Company Contact: Dror David, Chief Financial Officer, Tel: +972-8-938-7505, E-mail: ; Investor relations Contacts: Ehud Helft / Kenny Green, Nova Measuring Instruments Ltd. GK Investor Relations, Tel: +1-646-201-9246, E-mail:

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