Nova Reports First Quarter 2023 Results

About this update from Nova Ltd.

REHOVOT, Israel , May 11, 2023 /PRNewswire/ -- Nova (Nasdaq: NVMI) today announced financial results for the first quarter ended March 31, 2023 . First Quarter 2023 Highlights: Quarterly revenue of $132.2 million , down 1% year over year GAAP net income of $34.6 million , or $1.09 per diluted share, up 2% year over year on a per-share basis, exceeding management guidance of $0.77 to $0.98 Non-GAAP net income of $39.1 million , or $1.23 per diluted share, down 5% year over year on a per-share basis, exceeding management guidance of $0.93 to $1.14 Significant improvement in blended gross margin, driven by record software revenues and a favorable product mix Record bookings for materials metrology, including VERAFLEX, METRION, and ELIPSON platforms GAAP Results (K) Q1 2023 Q4 2022 Q1 2022 Revenues $132,193 $151,238 $133,957 Net Income $34,627 $36,098 $34,162 Earnings per Diluted Share $1.09 $1.14 $1.07 Non-GAAP Results (K) Q1 2023 Q4 2022 Q1 2022 Net Income $39,075 $40,778 $41,487 Earnings per Diluted Share $1.23 $1.28 $1.30 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 performance in the first quarter displays resilience amidst a challenging industry environment. Our excellent profitability attests to the exceptional value our portfolio offers to customers and to the agility of our operational model," said Gaby Waisman , President and CEO. "We're encouraged by the record bookings for our materials metrology solutions and believe our positioning in this strategic domain is a growth engine for years to come. As our industry charts a path forward, navigating a host of global volatile conditions, we at Nova remain focused on our strategic plans and infrastructure investments that will enable our long-term growth." 2023 Second Quarter Financial Outlook Management provided an outlook for the second quarter, the period ending June 30, 2023 . Based on current estimates, management expects: $117 million to $125 million in revenue $0.75 to $0.89 in diluted GAAP EPS $0.92 to $1.06 in diluted non-GAAP EPS 2023 First Quarter Results Total revenues for the first quarter of 2023 were $132.2 million, a decrease of 13% compared with the fourth quarter of 2022 and a decrease of 1% compared with the first quarter of 2022. Gross margin in the first quarter of 2023 was 58%, compared with 55% in the fourth quarter of 2022 and 56% in the first quarter of 2022. Operating expenses in the first quarter of 2023 were $41.5 million , compared with $45.5 million in the fourth quarter of 2022 and $37 .6 million in the first quarter of 2022. On a GAAP basis, the Company reported net income of $34.6 million , or $1.09 per diluted share, in the first quarter of 2023. This is compared with net income of $36.1 million , or $1.14 per diluted share, in the fourth quarter of 2022, and net income of $34.2 million , or $1.07 per diluted share, in the first quarter of 2022. On a non-GAAP basis, the Company reported net income of $39.1 million , or $1.23 per diluted share, in the first quarter of 2023. This is compared with net income of $40.8 million, or $1.28 per diluted share, in the fourth quarter of 2022, and net income of $41.5 million , or $1.30 per diluted share, in the first quarter of 2022. Conference Call Information Nova will host a conference call today, May 11, 2023 , 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: 1-844-826-3035 ISRAEL TOLL-FREE Dial -in Number: 1-80-921-3284 INTERNATIONAL Dial-in Number: 1-412-317-5195 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 May 11, 2023 , at 11:30 a.m. Eastern Time until May 18, 2023 , 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: 10177465 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: increased information technology security threats and sophisticated computer crime; foreign political and economic risks including supply-chain difficulties; regulations that could restrict our operations such as economic sanctions and export restrictions; changes in U.S. trade policies; indirect effects of the Russia – Ukraine conflict; market instability including inflation and recessionary pressures; risks related to doing business with China ; catastrophic events such as the outbreak of COVID-19; inability to protect our intellectual property; open source technology exposure; failure to compete effectively or to respond to 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 including related to the potential changes to the judicial system; 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. NOVA LTD. CONDENSED CONSOLIDATED BALANCE SHEETS ( U.S. dollars in thousands) - (Unaudited) As of March 31 , December 31 , ASSETS 2023 2022 Current assets Cash and cash equivalents 96,075 111,121 Short-term interest-bearing bank deposits 113,562 95,305 Marketable securities 179,761 167,073 Trade accounts receivable, net 100,985 109,320 Inventories 137,096 116,600 Other current assets 21,639 13,527 Total current assets 649,118 612,946 Non-current assets Marketable securities 154,825 153,462 Interest-bearing bank deposits and restricted cash 5,998 2,083 Deferred tax assets 21,656 20,097 Operating lease right-of-use assets 43,968 44,885 Property plant and equipment, net 56,821 55,886 Intangible assets, net 42,969 43,586 Goodwill 49,585 49,009 Other long-term assets 1,997 2,151 Total non-current assets 377,819 371,159 Total assets 1,026,937 984,105 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Trade accounts payable 43,092 42,732 Deferred revenues 30,238 30,543 Operating lease current liabilities 5,974 5,968 Other current liabilities 56,426 54,825 Total current liabilities 135,730 134,068 Non-current liabilities Convertible senior notes, net 196,710 196,394 Operating lease long-term liabilities 41,932 43,697 Long-term deferred tax liability 12,065 12,190 Other long-term liabilities 11,206 10,793 Total non-current liabilities 261,913 263,074 Shareholders' equity 629,294 586,963 Total liabilities and shareholders' equity 1,026,937 984,105 NOVA LTD. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ( U.S. dollars in thousands, except per share data) - (Unaudited) Three months ended March 31 , 2023 2022 Revenues: Products 105,331 109,912 Services 26,862 24,045 Total revenues 132,193 133,957 Total cost of revenues 54,927 59,282 Gross profit 77,266 74,675 Operating expenses: Research and development, net 22,968 19,129 Sales and marketing 13,522 12,384 General and administrative 5,039 6,056 Total operating expenses 41,529 37,569 Operating income 35,737 37,106 Financing income, net 4,728 1,218 Income before taxes on income 40,465 38,324 Income tax expenses 5,838 4,162 Net income for the period 34,627 34,162 Earnings per share: Basic 1.21 1.20 Diluted 1.09 1.07 Shares used in calculation of earnings per share (in thousands): Basic 28,678 28,579 Diluted 31,824 31,968 NOVA LTD. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ( U.S. dollars in thousands) - (Unaudited) Three months ended March 31 , 2023 2022 Cash flows from operating activities: Net income 34,627 34,162 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of property and equipment 2,340 2,035 Amortization of intangible assets 1,444 1,613 Amortization of premium and accretion of discount on marketable securities, net (428) 829 Amortization of debt discount and issuance costs 316 320 Share-based compensation 4,394 3,860 Net effect of exchange rate fluctuation 1,349 793 Changes in assets and liabilities: Trade accounts receivables, net 8,617 470 Inventories (20,335) (6,898) Other current and long-term assets (8,231) (15,996) Deferred tax assets, net (1,937) (2,609) Operating lease right-of-use assets 802 912 Trade accounts payables 500 (1,941) Deferred revenues (313) (744) Operating lease liabilities (1,645) (806) Other current and long-term liabilities 1,670 (3,151) Accrued severance pay, net (98) 61 Net cash provided by operating activities 23,072 12,910 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 (23,062) 49,632 Investment in marketable securities (53,682) (16,836) Proceeds from maturity of marketable securities 41,892 15,770 Purchase of property and equipment (2,758) (3,718) Net cash used in investing activities (37,610) (33,621) Cash flows from financing activities: Purchases of treasury shares (112) - Net cash used in financing activities (112) - Effect of exchange rate fluctuations on cash and cash equivalents (996) (794) Changes in cash and cash equivalents and restricted cash (15,646) (21,505) Cash and cash equivalents and restricted cash - beginning of period 111,721 126,698 Cash and cash equivalents - end of period 96,075 105,193 NOVA LTD. RECONCILIATION OF GAAP TO NON-GAAP RESULTS ( U.S. dollars in thousands, except percentage and per share data) - (Unaudited) Three months ended March 31, 2023 December 31, 2022 March 31,2022 GAAP gross profit 77,266 82,421 74,675 Stock-based compensation* 1,165 1,148 883 Amortization of acquired intangible assets 1,338 1,307 1,475 Acquisition related inventory step-up - - 2,606 Non-GAAP gross profit 79,769 84,876 79,639 GAAP gross margin as a percentage of revenues 58 % 54 % 56 % Non-GAAP gross margin as a percentage of revenues 60 % 56 % 59 % GAAP operating income 35,737 36,924 37,106 Stock-based compensation* 4,394 4,381 3,860 Acquisition-related inventory step-up - - 2,606 Acquisition-related expenses and contingent consideration revaluation - (752) 1,355 Amortization of acquired intangible assets 1,444 1,463 1,613 Non-GAAP operating income 41,575 42,016 46,540 GAAP operating margin as a percentage of revenues 27 % 24 % 28 % Non-GAAP operating margin as a percentage of revenues 31 % 28 % 35 % GAAP net income 34,627 36,098 34,162 Stock-based compensation* 4,394 4,381 3,860 Acquisition-related inventory step-up - - 2,606 Acquisition-related expenses and contingent consideration revaluation - (752) 1,355 Amortization of acquired intangible assets 1,444 1,463 1,613 Amortization of debt discount and issuance costs 316 322 320 Revaluation of operating lease liabilities (822) 294 (546) Tax effect of non-GAAP adjustments (884) (1,028) (1,883) Non-GAAP net income 39,075 40,778 41,487 GAAP basic earnings per share 1.21 1.26 1.20 Non-GAAP basic earnings per share 1.36 1.42 1.45 GAAP diluted earnings per share 1.09 1.14 1.07 Non-GAAP diluted earnings per share 1.23 1.28 1.30 Shares used for calculation of earnings per share(in thousands): Basic 28,678 28,731 28,579 Diluted 31,824 31,737 31,968 * Stock-based compensation for the three months ended, March 31, 2023 included in – Cost of revenues - 1,165; Research and development, net – 1,784; Sales and marketing – 847; General and administrative – 598. NOVA LTD. SUPPLEMENTAL INFORMATION - RECONCILIATION OF SECOND QUARTER 2023 GAAP TO NON-GAAP GUIDANCE (Unaudited) Low High Estimated GAAP net income per diluted share 0.75 0.89 Estimated non-GAAP items: Stock-based compensation 0.15 0.15 Amortization of acquired intangible assets 0.04 0.04 Amortization of issuance costs 0.01 0.01 Tax effect of non-GAAP adjustments (0.03) (0.03) Estimated non-GAAP net income per diluted share 0.92 1.06 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 - https://mma.prnewswire.com/media/1446151/Nova_Logo.jpg View original content: https://www.prnewswire.com/news-releases/nova-reports-first-quarter-2023-results-301821909.html SOURCE Nova

View stock analysis, news, and events for Nova Ltd.