REHOVOT, Israel, Aug. 3, 2023
/PRNewswire/ -- Nova (NASDAQ: NVMI) today announced
financial results for the second quarter, the three-month period
ended June 30, 2023.
Second Quarter 2023 Highlights:
- Quarterly revenue of $122.7
million, above the midpoint of guidance range of
$117 to $125
million and down 13% year over year.
- GAAP net income of $29.9 million,
or $0.94 per diluted share, higher
than the company guidance of $0.75 to
$0.89 and down 14% year over year on
a per-share basis.
- Non-GAAP net income of $33.8
million, or $1.06 per diluted
share, reaching the top of the company's guidance range of
$0.92 to $1.06 and down 15% year over year on a per-share
basis.
- Continued adoption of advanced dimensional and materials
product portfolio, including the Elipson and multiple
procurements of Nova's newest Veraflex model by a leading Memory
customer.
- Heightened interest in Nova's unique technology offerings,
including advanced packaging solutions, manifested by multiple
evaluation processes at leading customers.
|
GAAP Results
(K)
|
|
Q2 2023
|
Q1 2023
|
Q2 2022
|
|
Revenues
|
$122,702
|
$132,193
|
$141,628
|
|
Net Income
|
$29,926
|
$34,627
|
$34,878
|
|
Earnings per Diluted
Share
|
$0.94
|
$1.09
|
$1.09
|
|
Non-GAAP Results
(K)
|
|
Q2 2023
|
Q1 2023
|
Q2 2022
|
|
Net Income
|
$33,814
|
$39,075
|
$39,546
|
|
Earnings per Diluted
Share
|
$1.06
|
$1.23
|
$1.24
|
|
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's results for the quarter met our expectations,
highlighting the resilience of our portfolio, our wide exposure to
new advanced applications, a well-maintained operational model, an
effective combination of customers' focus and our roadmap of
continuous investment in every division," said Gaby Waisman, President and CEO. "The value of
our broad Materials and Dimensional portfolio propels increased
traction with several notable achievements this quarter, including
new penetrations and additional orders following successful
evaluations of our new portfolio products. These opportunities will
allow us to broaden our position and capitalize on larger
opportunities once the industry fully recovers."
2023 Third Quarter Financial Outlook
Management provided an outlook for the third quarter, the period
ending September 30, 2023. Based on
current estimates, management expects:
- $119 million to $126 million in revenue
- $0.83 to $0.94 in diluted GAAP EPS
- $1.02 to $1.13 in diluted non-GAAP EPS
2023 Second Quarter Results
Total revenues for the second quarter of
2023 were $122.7 million, a decrease
of 7% compared with the first quarter of 2023
and a decrease of 13% compared with the second quarter of 2022.
Gross margin in the second quarter of 2023 was 57%,
compared with 58% in the first quarter of 2023 and
56% in the second quarter of 2022.
Operating expenses in the second quarter of 2023 were
$40.9 million, compared with
$41.5 million in the first quarter of
2023 and $42.1 million in the second
quarter of 2022.
On a GAAP basis, the Company reported net income of $29.9 million, or $0.94 per diluted share, in the second quarter of
2023. This is compared with net income of $34.6 million, or $1.09 per diluted share, in the first quarter of
2023, and net income of $34.9
million, or $1.09 per diluted
share, in the second quarter of 2022.
On a non-GAAP basis, the Company reported net income of
$33.8 million, or $1.06 per diluted share, in the second quarter of
2023. This is compared with net income of $39.1 million, or $1.23 per diluted share, in the first quarter of
2023, and net income of $39.5
million, or $1.24 per diluted
share, in the second quarter of 2022.
Conference Call Information
Nova will host a conference call today, August 03, 2023, at 8:30
a.m. Eastern Time, to discuss the Company's second quarter
2023 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: 1-877-300-8521
ISRAEL TOLL-FREE Dial-in Number:
1809-213-284
INTERNATIONAL Dial-in Number: 1-412-317-6026
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 3, 2023, at 11:30 a.m. Eastern Time until August 10, 2023, at 11:59
p.m. Eastern Time. To access the replay, please dial one of
the following numbers:
Replay Dial-in U.S. TOLL-FREE: 1-844-512-2921
Replay Dial-in INTERNATIONAL : 1-412-317-6671
Replay Pin Number: 10180161
A replay will also be available for 90 days on Nova's website
link 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 rapid technological change; 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,
2022, filed with the Securities and Exchange Commission on
February 28, 2023. 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
|
|
June
30,
|
December
31,
|
|
ASSETS
|
2023
|
2022
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
129,190
|
111,121
|
|
Short-term
interest-bearing bank deposits
|
99,036
|
95,305
|
|
Marketable
securities
|
188,163
|
167,073
|
|
Trade accounts
receivable, net
|
82,904
|
109,320
|
|
Inventories
|
149,001
|
116,600
|
|
Other current
assets
|
16,220
|
13,527
|
|
Total current
assets
|
664,514
|
612,946
|
|
Non-current
assets
|
|
|
|
Marketable
securities
|
148,379
|
153,462
|
|
Interest-bearing bank
deposits and restricted cash
|
5,971
|
2,083
|
|
Deferred tax
assets
|
23,756
|
20,097
|
|
Operating lease
right-of-use assets
|
43,134
|
44,885
|
|
Property plant and
equipment, net
|
60,471
|
55,886
|
|
Intangible assets,
net
|
41,434
|
43,586
|
|
Goodwill
|
49,539
|
49,009
|
|
Other long-term
assets
|
1,906
|
2,151
|
|
Total non-current
assets
|
374,590
|
371,159
|
|
Total
assets
|
1,039,104
|
984,105
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Convertible senior notes, net
|
197,030
|
-
|
|
Trade accounts
payable
|
35,951
|
42,732
|
|
Deferred
revenues
|
27,181
|
30,543
|
|
Operating lease
current liabilities
|
5,728
|
5,968
|
|
Other current
liabilities
|
47,323
|
54,825
|
|
Total current
liabilities
|
313,213
|
134,068
|
|
Non-current
liabilities
|
|
|
|
Convertible senior
notes, net
|
-
|
196,394
|
|
Operating lease
long-term liabilities
|
40,564
|
43,697
|
|
Long-term deferred tax
liability
|
11,675
|
12,190
|
|
Other long-term
liabilities
|
11,324
|
10,793
|
|
Total non-current
liabilities
|
63,563
|
263,074
|
|
Shareholders'
equity
|
662,328
|
586,963
|
|
Total liabilities
and shareholders' equity
|
1,039,104
|
984,105
|
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,
|
|
2023
|
2022
|
2023
|
2022
|
|
Revenues:
|
|
|
|
|
|
Products
|
95,627
|
114,120
|
200,958
|
224,032
|
|
Services
|
27,075
|
27,508
|
53,937
|
51,553
|
|
Total
revenues
|
122,702
|
141,628
|
254,895
|
275,585
|
|
Total cost of
revenues
|
53,044
|
62,595
|
107,971
|
121,877
|
|
Gross
profit
|
69,658
|
79,033
|
146,924
|
153,708
|
|
Operating
expenses:
|
|
|
|
|
|
Research and
development, net
|
22,413
|
22,115
|
45,381
|
41,244
|
|
Sales and
marketing
|
12,927
|
12,500
|
26,449
|
24,884
|
|
General and
administrative
|
5,602
|
7,455
|
10,641
|
13,511
|
|
Total operating
expenses
|
40,942
|
42,070
|
82,471
|
79,639
|
|
Operating
income
|
28,716
|
36,963
|
64,453
|
74,069
|
|
Financing income,
net
|
5,628
|
3,568
|
10,356
|
4,786
|
|
Income before taxes
on income
|
34,344
|
40,531
|
74,809
|
78,855
|
|
Income tax
expenses
|
4,418
|
5,653
|
10,256
|
9,815
|
|
Net income for the
period
|
29,926
|
34,878
|
64,553
|
69,040
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
Basic
|
1.04
|
1.22
|
2.25
|
2.41
|
|
Diluted
|
0.94
|
1.09
|
2.02
|
2.16
|
|
|
|
|
|
|
Shares used in
calculation of earnings per share
(in thousands):
|
|
|
|
|
|
Basic
|
28,766
|
28,688
|
28,706
|
28,662
|
|
Diluted
|
31,928
|
31,902
|
31,927
|
31,963
|
NOVA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in
thousands) - (Unaudited)
|
|
|
|
|
Three months
ended
June
30,
|
Six months
ended
June
30,
|
|
2023
|
2022
|
2023
|
2022
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net
income
|
29,926
|
34,878
|
64,553
|
69,040
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation of property and
equipment
|
2,476
|
2,001
|
4,816
|
4,036
|
|
Amortization of intangible
assets
|
1,475
|
1,513
|
2,919
|
3,126
|
|
Amortization of premium and
accretion of discount on marketable securities, net
|
(621)
|
715
|
(1,049)
|
1,544
|
|
Amortization of debt
discount and issuance costs
|
320
|
318
|
636
|
638
|
|
Share-based
compensation
|
3,667
|
4,072
|
8,061
|
7,932
|
|
Net effect of exchange rate
fluctuation
|
407
|
2,178
|
1,756
|
2,971
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
Trade accounts receivable,
net
|
18,064
|
(17,264)
|
26,681
|
(16,794)
|
|
Inventories
|
(14,689)
|
(5,637)
|
(35,024)
|
(12,535)
|
|
Other current and long-term
assets
|
5,513
|
7,925
|
(2,718)
|
(8,071)
|
|
Deferred tax assets,
net
|
(2,406)
|
(2,331)
|
(4,343)
|
(4,940)
|
|
Operating lease right-of-use
assets
|
839
|
1,123
|
1,641
|
2,035
|
|
Trade accounts
payable
|
(7,773)
|
881
|
(7,273)
|
(1,060)
|
|
Deferred revenues
|
(3,055)
|
5,266
|
(3,368)
|
4,522
|
|
Operating lease
liabilities
|
(1,617)
|
(4,332)
|
(3,262)
|
(5,138)
|
|
Other current and long-term
liabilities
|
(8,288)
|
(6,234)
|
(6,618)
|
(9,385)
|
|
Accrued severance pay,
net
|
(71)
|
10
|
(169)
|
71
|
|
Net cash provided by
operating activities
|
24,167
|
25,082
|
47,239
|
37,992
|
|
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
|
14,452
|
66,872
|
(8,610)
|
116,504
|
|
Investment in
marketable securities
|
(44,458)
|
(34,691)
|
(98,140)
|
(51,527)
|
|
Proceeds from maturity
of marketable securities
|
42,423
|
18,428
|
84,315
|
34,198
|
|
Purchase of property
and equipment
|
(3,274)
|
(4,239)
|
(6,032)
|
(7,957)
|
|
Net cash provided by
(used in) investing activities
|
9,143
|
46,370
|
(28,467)
|
12,749
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Purchases of treasury
shares
|
-
|
(4,270)
|
(112)
|
(4,270)
|
|
Proceeds from exercise
of options
|
115
|
82
|
115
|
82
|
|
Net cash provided by
(used in) financing activities
|
115
|
(4,188)
|
3
|
(4,188)
|
|
Effect of exchange rate
fluctuations on cash and cash equivalents
|
(310)
|
(2,160)
|
(1,306)
|
(2,954)
|
|
Changes in cash and
cash equivalents and restricted cash
|
33,115
|
65,104
|
17,469
|
43,599
|
|
Cash and cash
equivalents and restricted cash -beginning of
period
|
96,075
|
105,193
|
111,721
|
126,698
|
|
Cash and cash
equivalents - end of period
|
129,190
|
170,297
|
129,190
|
170,297
|
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,
2023
|
March
31,
2023
|
June 30,
2022
|
|
|
|
GAAP gross
profit
|
69,658
|
77,266
|
79,033
|
|
|
|
Stock-based
compensation*
|
1,071
|
1,165
|
1,021
|
|
|
|
Amortization of
acquired intangible assets
|
1,368
|
1,338
|
1,355
|
|
|
|
Acquisition related
inventory step-up
|
-
|
-
|
366
|
|
|
|
Non-GAAP gross
profit
|
72,097
|
79,769
|
81,775
|
|
|
|
GAAP gross margin as
a percentage of revenues
|
57 %
|
58 %
|
56 %
|
|
|
|
Non-GAAP gross
margin as a percentage of revenues
|
59 %
|
60 %
|
58 %
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
28,716
|
35,737
|
36,963
|
|
|
|
Stock-based
compensation*
|
3,667
|
4,394
|
4,072
|
|
|
|
Acquisition-related
inventory step-up
|
-
|
-
|
366
|
|
|
|
Acquisition-related
expenses and contingent
consideration
revaluation
|
-
|
-
|
2,392
|
|
|
|
Amortization of
acquired intangible assets
|
1,475
|
1,444
|
1,513
|
|
|
|
Non-GAAP operating
income
|
33,858
|
41,575
|
45,306
|
|
|
|
GAAP operating
margin as a percentage of revenues
|
23 %
|
27 %
|
26 %
|
|
|
|
Non-GAAP operating
margin as a percentage of revenues
|
28 %
|
31 %
|
32 %
|
|
|
|
|
|
|
|
|
|
GAAP net
income
|
29,926
|
34,627
|
34,878
|
|
|
|
Stock-based
compensation*
|
3,667
|
4,394
|
4,072
|
|
|
|
Acquisition-related
inventory step-up
|
-
|
-
|
366
|
|
|
|
Acquisition-related
expenses and contingent
consideration
revaluation
|
-
|
-
|
2,392
|
|
|
|
Amortization of
acquired intangible assets
|
1,475
|
1,444
|
1,513
|
|
|
|
Amortization of debt
discount and issuance costs
|
320
|
316
|
318
|
|
|
|
Revaluation of
operating lease liabilities
|
(768)
|
(822)
|
(3,350)
|
|
|
|
Tax effect of non-GAAP
adjustments
|
(806)
|
(884)
|
(643)
|
|
|
|
Non-GAAP net
income
|
33,814
|
39,075
|
39,546
|
|
|
|
|
|
|
|
|
|
GAAP basic earnings per
share
|
1.04
|
1.21
|
1.22
|
|
|
|
Non-GAAP basic earnings
per share
|
1.18
|
1.36
|
1.38
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings
per share
|
0.94
|
1.09
|
1.09
|
|
|
|
Non-GAAP diluted
earnings per share
|
1.06
|
1.23
|
1.24
|
|
|
|
|
|
|
|
|
|
Shares used for
calculation of earnings per share
(in thousands):
|
|
|
|
|
|
|
Basic
|
28,766
|
28,678
|
28,688
|
|
|
|
Diluted
|
31,928
|
31,824
|
31,902
|
|
|
|
|
|
|
* Stock-based
compensation for the three months ended June 30, 2023, included in
– Cost of revenues - 1,071;
Research and development, net – 1,403; Sales and marketing – 688;
General and administrative – 505.
|
|
|
NOVA LTD.
SUPPLEMENTAL INFORMATION - RECONCILIATION OF SECOND QUARTER
2023
GAAP TO NON-GAAP GUIDANCE
(U.S. dollars)
(Unaudited)
|
|
|
Low
|
High
|
|
Estimated GAAP net
income per diluted share
|
0.83
|
0.94
|
|
Estimated non-GAAP
items:
|
|
|
|
Stock-based
compensation
|
0.18
|
0.18
|
|
Amortization of
acquired intangible assets
|
0.04
|
0.04
|
|
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
|
1.02
|
1.13
|
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
Logo -
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content:https://www.prnewswire.com/news-releases/nova-reports-second-quarter-2023-financial-results-301892566.html
SOURCE Nova