Nova Reports Results for Second Quarter of 2022
08/04/2022 - 07:30 AM
REHOVOT, Israel , Aug. 4, 2022 /PRNewswire/ -- Nova (Nasdaq: NVMI) today announced financial results for the second quarter, the three-month period ended June 30, 2022 .
Second Quarter 2022 Highlights:
Record quarterly revenue of $141.6 million . Up 45% year over year GAAP net income of $34.9 million , or $1.09 per diluted share. Up 42% year over year on a per-share basis Non-GAAP net income of $39.5 million , or $1.24 per diluted share. Up 38% year over year on a per-share basis Record Optical CD Standalone revenue driven by multiple customer selections Diversified geographic mix, including four major territories contributing over 15% of revenue each Continued proliferation of Nova METRION®. Selected by Advanced Logic Manufacturer GAAP Results ($K)
Q2 2022
Q1 2022
Q2 2021
Revenues
$141,628
$133,957
$97,746
Net Income
$34,878
$34,162
$22,924
Earnings per Diluted Share
$1.09
$1.07
$0.77
Non-GAAP Results ($K)
Q2 2022
Q1 2022
Q2 2021
Net Income
$39,546
$41,487
$26,886
Earnings per Diluted Share
$1.24
$1.30
$0.90
A reconciliation between GAAP operating results and non-GAAP operating results is provided following the financial statements included in this release. See also "Use of Non-GAAP Adjusted Financial Measures" section.
Management Comments
"Nova delivered sound results for the second quarter, demonstrating strength in all product lines across our dimensional, materials, and chemical metrology portfolio. Our business performance yielded another quarterly revenue record with both revenue and profitability reaching the high end of the guidance," commented Eitan Oppenhaim, President and Chief Executive Officer. "Our solid backlog and the demand for our products across the various semiconductor technology nodes solidify our goal to continue our profitable growth this year as well. With the company revenues exceeding $500 million in the last four quarters, we mark the realization of our Nova 500 strategic plan, which cemented the fundamentals to support our future organic and inorganic growth in the long term."
2022 Third Quarter Financial Outlook
Management provided an outlook for the third quarter, the period ending September 30, 2022 . Based on current estimates, management expects:
$137 million to $147 million in revenue$0.89 to $1.08 in diluted GAAP EPS$1.06 to $1.25 in diluted non-GAAP EPS2022 Second Quarter Results
Total revenues for the second quarter of 2022 were $141.6 million , an increase of 6% compared with the first quarter of 2022 and an increase of 45% compared with the second quarter of 2021.
Gross margin in the second quarter of 2022 was 57% , same as the first quarter of 2022 and the second quarter of 2021.
Operating expenses in the second quarter of 2022 were $43.4 million , compared with $39.0 million in the first quarter of 2022 and $28.7 million in the second quarter of 2021.
On a GAAP basis, the Company reported net income of $34.9 million , or $1.09 per diluted share, in the second quarter of 2022. This is compared with net income of $34.2 million , or $1.07 per diluted share, in the first quarter of 2022, and net income of $22.9 million , or $0.77 per diluted share, in the second quarter of 2021.
On a non-GAAP basis, the Company reported net income of $39.5 million , or $1.24 per diluted share, in the second quarter of 2022. This is compared with net income of $41.5 million , or $1.30 per diluted share, in the first quarter of 2022, and net income of $26.9 million , or $0.90 per diluted share, in the second quarter of 2021.
Conference Call Information
Nova will host a conference call today, August 4, 2022 , at 8:30 a.m. Eastern Time , to discuss the financial results and outlook. To attend the conference call, please dial one of the following teleconferencing numbers. Please begin by placing your calls five minutes before the conference call commences. If you are unable to connect using the toll-free numbers, please try the international dial-in number.
U.S. TOLL-FREE Dial-in Number: 1-800-239-9838ISRAEL TOLL-FREE Dial-in Number: 1-809-407-724 INTERNATIONAL Dial-in Number: 1-323-794-2551
At:8:30 a.m. Eastern Time 5:30 a.m. Pacific Time 3:30 p.m. Israel Time
The conference call will also be webcast live from a Link on Nova's website at https://www.novami.com/investors/events/ .
A replay of the conference call will be available from August 4, 2022 , at 11:30 a.m. Eastern Time to August 11, 2022 , at 11:59 p.m. Eastern Time . To access the replay, please dial one of the following numbers:
Replay Dial-in TOLL-FREE: 1-844-512-2921 Replay Dial-in TOLL/INTERNATIONAL: 1-412-317-6671 Replay Pin Number: 2902650
A replay will also be available for 90 days on Nova's website at https://www.novami.com/investors/events/ .
About Nova
Nova is a leading innovator and key provider of material, optical and chemical metrology solutions for advanced process control in semiconductor manufacturing. Nova delivers continuous innovation by providing state-of-the-art high-performance metrology solutions for effective process control throughout the semiconductor fabrication lifecycle. Nova's product portfolio, which combines high-precision hardware and cutting-edge software, provides its customers with deep insight into developing and producing the most advanced semiconductor devices. Nova's unique capability to deliver innovative solutions enables its customers to improve performance, enhance product yields and accelerate time to market. Nova acts as a partner to semiconductor manufacturers from its offices worldwide. Additional information may be found on Nova's website link - https://www.novami.com/ .
Nova is traded on the Nasdaq and TASE, Nasdaq ticker symbol NVMI.
Use of Non-GAAP Adjusted Financial Measures
This press release provides financial measures that exclude amortization of acquired intangible assets, acquisition related expenses, inventory step-up and contingent consideration revaluation, stock-based compensation expenses, revaluation of operating lease liabilities, amortization of debt discount and issuance costs and tax effect of non-GAAP adjustment, as applicable, 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 enhance management's and investors' ability to evaluate Nova's performance before charges or benefits 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 allow 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.
Forward-Looking Statements
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, but not limited to, anticipated growth opportunities and projections about our business and its future revenues, expenses 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 differ materially from any future results, levels of activity, performance or achievements expressed or implied in those forward-looking statements. Factors that may affect our results, performance, circumstances or achievements include, but are not limited to, the following: catastrophic events such as the outbreak of COVID-19; increased information technology security threats and sophisticated computer crime; foreign political and economic risks; changes in U.S. trade policies; inability to protect our intellectual property; open source technology exposure; failure to compete effectively or to respond to the rapid technological changes; consolidation in our industry; difficulty in predicting the length and strength of any downturn or expansion period of the market we target; factors that adversely affect the pricing and demand for our product lines; dependency on a small number of large customers; dependency on a single manufacturing facility per product line; dependency on a limited number of suppliers; difficulty in integrating current or future acquisitions; lengthy sales cycle and customer delays in orders; political, economic, and military instability in Israel ; risks related to our convertible notes; currency fluctuations; and quarterly fluctuations in our operating results. 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, 2021 filed with the Securities and Exchange Commission on March 1, 2022 . These factors are updated from time to time through the filing of reports and registration statements with the Securities and Exchange Commission. Nova Ltd. does not assume any obligation to update the forward-looking information contained in this press release.
(Tables to Follow)
NOVA LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands) - (Unaudited)
As of
ASSETS
June 30,
2022
December 31,
2021
Current assets
Cash and cash equivalents
170,297
126,698
Short-term interest-bearing bank deposits
105,393
221,897
Marketable securities
88,622
61,568
Trade accounts receivable, net
94,559
68,446
Inventories
101,633
78,665
Other current assets
17,326
9,242
Total current assets
577,830
566,516
Non-current assets
Marketable securities
120,937
137,415
Interest-bearing bank deposits
3,263
3,672
Restricted interest-bearing bank deposits
1,600
1,600
Deferred tax assets
11,306
6,161
Severance pay funds
1,198
1,327
Operating lease right-of-use assets
44,873
30,627
Property and equipment, net
45,781
34,460
Intangible assets, net
45,456
2,601
Goodwill
48,534
20,114
Other long-term assets
723
661
Total non-current assets
323,671
238,638
Total assets
901,501
805,154
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Convertible senior notes, net
-
183,037
Trade accounts payable
36,819
36,218
Deferred revenues
19,829
15,338
Operating lease current liabilities
5,727
4,452
Other current liabilities
53,713
48,885
Total current liabilities
116,088
287,930
Non-current liabilities
Convertible senior notes, net
195,750
-
Accrued severance pay
3,628
3,686
Operating lease long-term liabilities
43,301
33,450
Long-term deferred tax liability
12,593
-
Other long-term liabilities
7,627
6,334
Total non-current liabilities
262,899
43,470
Shareholders' equity
522,514
473,754
Total liabilities and shareholders' equity
901,501
805,154
NOVA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except per share data) - (Unaudited)
Three months ended June 30,
Six months ended June 30,
2022
2021
2022
2021
Revenues:
Products
114,120
78,293
224,032
144,576
Services
27,508
19,453
51,553
37,303
Total revenues
141,628
97,746
275,585
181,879
Total cost of revenues
61,240
41,802
119,047
78,005
Gross profit
80,388
55,944
156,538
103,874
Operating expenses:
Research and development, net
22,115
15,341
41,244
29,859
Sales and marketing
12,342
9,432
24,588
18,972
General and administrative
7,455
3,388
13,511
6,927
Amortization of intangible assets
1,513
574
3,126
1,149
Total operating expenses
43,425
28,735
82,469
56,907
Operating income
36,963
27,209
74,069
46,967
Financing income (expense), net
3,568
(1,150)
4,786
(726)
Income before taxes on income
40,531
26,059
78,855
46,241
Income tax expenses
5,653
3,135
9,815
5,701
Net income for the period
34,878
22,924
69,040
40,540
Earnings per share:
Basic
1.22
0.81
2.41
1.43
Diluted
1.09
0.77
2.16
1.37
Shares used in calculation of earnings per share (in thousands):
Basic
28,688
28,304
28,662
28,259
Diluted
31,902
29,815
31,963
29,561
NOVA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands) - (Unaudited)
Three months ended June 30,
Six months ended June 30,
2022
2021
2022
2021
Cash flows from operating activities:
Net income
34,878
22,924
69,040
40,540
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment
2,001
1,596
4,036
3,175
Amortization of intangible assets
1,513
574
3,126
1,149
Amortization of premium and accretion of discount on marketable securities, net
715
283
1,544
283
Amortization of debt discount and issuance costs
318
1,051
638
2,085
Share-based compensation
4,072
2,128
7,932
4,350
Net effect of exchange rate fluctuation
2,178
(350)
2,971
12
Changes in assets and liabilities:
Trade accounts receivables, net
(17,264)
1,613
(16,794)
5,107
Inventories
(5,637)
(5,831)
(12,535)
(10,248)
Other current and long-term assets
7,925
554
(8,071)
(608)
Deferred tax assets, net
(2,331)
(1,116)
(4,940)
(1,714)
Operating lease right-of-use assets
1,123
411
2,035
817
Trade accounts payables
881
1,932
(1,060)
2,371
Deferred revenues
5,266
(147)
4,522
8,874
Operating lease liabilities
(4,332)
81
(5,138)
(1,185)
Other current and long-term liabilities
(6,234)
587
(9,385)
4,305
Accrued severance pay, net
10
93
71
55
Net cash provided by operating activities
25,082
26,383
37,992
59,368
Cash flows from investment activities:
Acquisition of subsidiary, net of acquired cash
-
-
(78,469)
-
Change in short-term and long-term interest-bearing bank deposits
66,872
2,461
116,504
(53,344)
Investment in marketable securities
(34,691)
(101,466)
(51,527)
(101,466)
Proceeds from maturities of marketable securities
18,428
1,200
34,198
1,200
Purchase of property and equipment
(4,239)
(1,318)
(7,957)
(1,806)
Net cash provided by (used in) investing activities
46,370
(99,123)
12,749
(155,416)
Cash flows from investment activities:
Purchases of treasury shares
(4,270)
-
(4,270)
-
Proceeds from exercise of options
82
-
82
-
Net cash used in financing activities
(4,188)
-
(4,188)
-
Effect of exchange rate fluctuations on cash and cash equivalents
(2,160)
272
(2,954)
34
Changes in cash and cash equivalents
65,104
(72,468)
43,599
(96,014)
Cash and cash equivalents - beginning of period
105,193
208,758
126,698
232,304
Cash and cash equivalents - end of period
170,297
136,290
170,297
136,290
NOVA LTD.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(U.S. dollars in thousands, except percentage and per share data) - (Unaudited)
Three months ended
June 30, 2022
March 31, 2022
June 30, 2021
GAAP gross profit
80,388
76,150
55,944
Stock-based compensation*
1,021
883
382
Acquisition-related inventory step-up
366
2,606
-
Non-GAAP gross profit
81,775
79,639
56,326
GAAP gross margin as a percentage of revenues
57 %
57 %
57 %
Non-GAAP gross margin as a percentage of revenues
58 %
59 %
58 %
GAAP operating income
36,963
37,106
27,209
Stock-based compensation*
4,072
3,860
2,128
Acquisition-related inventory step-up
366
2,606
-
Acquisition-related expenses and contingent
consideration revaluation
2,392
1,355
-
Amortization of acquired intangible assets
1,513
1,613
574
Non-GAAP operating income
45,306
46,540
29,911
GAAP operating margin as a percentage of revenues
26 %
28 %
28 %
Non-GAAP operating margin as a percentage of revenues
32 %
35 %
31 %
GAAP net income
34,878
34,162
22,924
Stock-based compensation*
4,072
3,860
2,128
Acquisition-related inventory step-up
366
2,606
-
Acquisition-related expenses and contingent
consideration revaluation
2,392
1,355
-
Amortization of acquired intangible assets
1,513
1,613
574
Amortization of debt discount and issuance costs
318
320
1,051
Revaluation of operating lease liabilities
(3,350)
(546)
554
Tax effect of non-GAAP adjustments
(643)
(1,883)
(345)
Non-GAAP net income
39,546
41,487
26,886
GAAP basic earnings per share
1.22
1.20
0.81
Non-GAAP basic earnings per share
1.38
1.45
0.95
GAAP diluted earnings per share
1.09
1.07
0.77
Non-GAAP diluted earnings per share
1.24
1.30
0.90
Shares used for calculation of earnings per share (in thousands):
Basic
28,688
28,579
28,304
Diluted
31,902
31,968
29,815
* Stock-based compensation for the three months ended June 30, 2022 included in: Cost of revenues - 1,021; Research and development, net - 1,694; Sales and marketing - 756; General and administrative - 601.
NOVA LTD.
SUPPLEMENTAL INFORMATION - RECONCILIATION OF THIRD QUARTER 2022
GAAP TO NON-GAAP GUIDANCE
(Unaudited)
Low
High
Estimated GAAP net income per diluted share
0.89
1.08
Estimated non-GAAP items:
Stock-based compensation
0.15
0.15
Amortization of acquired intangible assets
0.05
0.05
Amortization of issuance costs
0.01
0.01
Tax effect of non-GAAP adjustments
(0.04)
(0.04)
Estimated non-GAAP net income per diluted share
1.06
1.25
Company Contact: Dror David , Chief Financial Officer Tel: +972-73-229-5760 E-mail - investors@novami.com Nova website link - https://www.novami.com/
Investor Relations Contact: Miri Segal MS-IR LLC Tel: +917-607-8654 E-mail - msegal@ms-ir.com
View original content:https://www.prnewswire.com/news-releases/nova-reports-results-for-second-quarter-of-2022-301599884.html
SOURCE Nova