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 /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
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. NOVA
MEASURING INSTRUMENTS LTD. CONSOLIDATED BALANCE SHEET (U.S. dollars
in thousands) As of December 31, 2009 2008 CURRENT ASSETS Cash and
cash equivalents 9,861 19,325 Short-term interest-bearing bank
deposits 8,607 97 Trade accounts receivable 11,545 2,783
Inventories 3,949 6,862 Other current assets 1,728 1,086 35,690
30,153 LONG-TERM ASSETS Long-term interest-bearing bank deposits
561 544 Other Long-term assets 142 157 Severance pay funds 2,368
2,141 3,071 2,842 FIXED ASSETS, NET 2,163 2,796 Total assets 40,924
35,791 CURRENT LIABILITIES Trade accounts payable 3,715 3,480
Deferred income 1,671 2,385 Other current liabilities 5,237 4,042
10,623 9,907 LONG-TERM LIABILITIES Liability for employee severance
pay 3,168 3,152 Deferred income 183 351 Other long-term liability
35 40 3,386 3,543 SHAREHOLDERS' EQUITY 26,915 22,341 Total
liabilities and shareholders' equity 40,924 35,791 NOVA MEASURING
INSTRUMENTS LTD. QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except per share data) Three months
ended December 31, September 30, December 31, 2009 2009 2008
REVENUES Product sales 12,646 8,717 3,028 Services 2,594 2,677
3,200 15,240 11,394 6,228 COST OF REVENUES Product sales 5,399
3,699 1,643 Inventory write-off and inventory purchase commitments
losses -- -- 550 Services 2,445 2,191 2,696 7,844 5,890 4,889 GROSS
PROFIT 7,396 5,504 1,339 OPERATING EXPENSES Research &
Development expenses, net 2,049 1,850 2,223 Sales & Marketing
expenses 2,025 1,523 1,390 General & Administration expenses
659 594 738 4,733 3,967 4,351 OPERATING PROFIT (LOSS) 2,663 1,537
(3,012) Interest income, net 31 153 75 Gain on short-term
investments -- -- 1,366 NET INCOME (LOSS) FOR THE PERIOD 2,694
1,690 (1,571) Net income (loss) per share: Basic 0.14 0.09 (0.08)
Diluted 0.13 0.08 (0.08) Shares used for calculation of net income
(loss) per share: Basic 19,717 19,417 19,378 Diluted 21,173 19,942
19,378 NOVA MEASURING INSTRUMENTS LTD. YEAR TO DATE CONSOLIDATED
STATEMENTS OF OPERATIONS (U.S. dollars in thousands, except per
share data) Year ended December 31, 2009 2008 REVENUES Product
sales 29,639 25,673 Services 9,679 13,296 39,318 38,969 COST OF
REVENUES Product sales 12,732 12,527 Inventory write-off and
inventory purchase commitments losses -- 1,400 Services 8,999
12,059 21,731 25,986 GROSS PROFIT 17,587 12,983 OPERATING EXPENSES
Research & Development expenses, net 6,865 8,606 Sales &
Marketing expenses 6,014 7,503 General & Administration
expenses 2,240 3,199 Impairment loss on equipment related to
Hypernex assets and liabilities acquisition -- 633 15,119 19,941
OPERATING PROFIT (LOSS) 2,468 (6,958) Interest income, net 163 171
Gain on short-term investments -- 1,366 NET INCOME (LOSS) FOR THE
YEAR 2,631 (5,421) Net income (loss) per share: Basic 0.14 (0.28)
Diluted 0.13 (0.28) Shares used for calculation of net income
(loss) per share: Basic 19,473 19,369 Diluted 20,089 19,369 NOVA
MEASURING INSTRUMENTS LTD. QUARTERLY CONSOLIDATED STATEMENTS OF
CASH FLOWS (U.S. dollars in thousands) Three months ended December
31, September 30, December 31, 2009 2009 2008 CASH FLOW - OPERATING
ACTIVITIES Net income (loss) for the period 2,694 1,690 (1,571)
Adjustments to reconcile net loss to net cash used in operating
activities: Depreciation and amortization 347 311 315 Impairment
loss on equipment -- -- 10 Amortization of deferred stock-based
compensation 118 130 114 Decrease in liability for employee
termination benefits, net (187) (2) (61) Gain on short-term
investments -- -- (1,366) Net recognized losses on investments -- 4
49 Decrease (increase) in trade accounts receivables (5,943) (622)
2,465 Decrease in inventories 749 790 759 Decrease (increase) in
other current and long term assets (555) 45 40 Increase (decrease)
in trade accounts payables and other long-term liabilities 2,198
(662) (452) Increase (decrease) in other current liabilities 1,769
1,039 (253) Increase (decrease) in short and long term deferred
income 913 (857) (740) Net cash from (used in) operating activities
2,103 1,866 (691) CASH FLOW - INVESTMENT ACTIVITIES Decrease
(increase) in short-term interest-bearing bank deposits (8,560) --
21 Decrease in short-term investments -- 4,595 8,586 Proceeds
(investments) in long-term interest-bearing bank deposits (36) (2)
2,928 Additions to fixed assets (303) (72) (40) Net cash from (used
in) investment activities (8,899) 4,521 11,495 CASH FLOW -
FINANCING ACTIVITIES Shares issued under employee share-based plans
1,111 142 -- Net cash from investment activities 1,111 142 --
Increase (decrease) in cash and cash equivalents (5,685) 6,529
10,804 Cash and cash equivalents - beginning of period 15,546 9,017
8,521 Cash and cash equivalents - end of period 9,861 15,546 19,325
NOVA MEASURING INSTRUMENTS LTD. YEAR TO DATE CONSOLIDATED
STATEMENTS OF CASH FLOWS (U.S. dollars in thousands) Year ended
December 31, 2009 2008 CASH FLOW - OPERATING ACTIVITIES Net income
(loss) for the year 2,631 (5,421) Adjustments to reconcile net
income (loss) to net cash used in operating activities:
Depreciation and amortization 1,254 1,320 Impairment loss on
equipment -- 643 Amortization of deferred stock-based compensation
454 556 Increase (decrease) in liability for employee termination
benefits, net (159) 33 Gain on short-term investments -- (1,366)
Net recognized losses on investments -- 66 Decrease (increase) in
trade accounts receivables (8,762) 6,363 Decrease in inventories
2,695 1,330 Decrease (increase) in other current and long term
assets (421) 247 Decrease (increase) in trade accounts payables and
other long term liabilities 234 (4,013) Increase (decrease) in
other current liabilities 1,169 (3,371) Increase (decrease) in
short and long term deferred income (882) 339 Net cash used in
operating activities (1,787) (3,274) CASH FLOW - INVESTMENT
ACTIVITIES Increase in short-term interest-bearing bank (8,510)
(97) deposits Increase in short-term and long-term investments --
32 Proceeds from held to maturity securities -- 3,701 Proceeds from
(investments in) long-term interest-bearing bank deposits and
long-term investments (17) 4,571 Additions to fixed assets (403)
(944) Net cash from (used in) investment activities (8,930) 7,263
CASH FLOW - FINANCING ACTIVITIES Shares issued under employee
share-based plans 1,253 12 Net cash from financing activities 1,253
12 Increase (decrease) in cash and cash equivalents (9,464) 4,001
Cash and cash equivalents - beginning of year 19,325 15,324 Cash
and cash equivalents - end of year 9,861 19,325 NOVA MEASURING
INSTRUMENTS LTD. DISCLOSURE OF NON-GAAP NET INCOME (LOSS) (U.S.
dollars in thousands, except per share data) Three months ended
December 31, September 30, December 31, 2009 2009 2008 GAAP Net
income (loss) for the period 2,694 1,690 (1,571) Non-GAAP
Adjustments: Stock based compensation expenses 118 130 114
Inventory write-off and inventory purchase commitments losses -- --
550 Gain on short term investments -- -- (1,366) Non-GAAP Net
income (loss) for the period 2,812 1,820 (2,273) Non-GAAP net
income (loss) per share: Basic 0.14 0.09 (0.12) Diluted 0.13 0.09
(0.12) Shares used for calculation of non-GAAP net income (loss)
per share: Basic 19,717 19,417 19,378 Diluted 21,173 19,942 19,378
Year ended December 31, 2009 2008 GAAP Net (income) loss for the
year 2,631 (5,421) Non-GAAP Adjustments: Stock based compensation
expenses 454 556 Inventory write-off and inventory purchase
commitments losses -- 1,400 Impairment loss on equipment related to
Hypernex assets and liabilities acquisition -- 633 Gain on short
term investments -- (1,366) Non-GAAP Net income (loss) for the year
3,085 (4,198) Non-GAAP net income (loss) per share: Basic 0.16
(0.22) Diluted 0.15 (0.22) Shares used for calculation of non-GAAP
net income (loss) per share Basic 19,473 19,369 Diluted 20,089
19,369 Company Contact: Investor relations Contacts: Dror David,
Chief Financial Officer Ehud Helft / Kenny Green Nova Measuring
Instruments Ltd. CCG Investor Relations Tel: +972-8-938-7505 Tel:
+1-646-201-9246 E-mail: E-mail: http://www.nova.co.il/ 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, CCG Investor Relations, Tel: +1-646-201-9246,
E-mail:
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