Enhanced Investments - Financial Portal

Published: 2023-11-09 07:30:08 ET

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6-K 1 zk2330511.htm 6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2023
Commission File No.: 000-30668

NOVA LTD.

(Translation of registrant’s name into English)

5 David Fikes Street, Rehovot, Israel

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____

Attached hereto and incorporated by way of reference herein is a press release issued by the Registrant and entitled: “Nova Reports Third Quarter 2023 Financial Results”.

The GAAP financial statements tables included in the press release attached hereto are hereby incorporated by reference into the Registrant’s registration statements on Form S-8, filed with the Securities and Exchange Commission on the following dates: November 5, 2007 (File No. 333-147140); October 25, 2012 (File No. 333-184585), March 6, 2015 (File No. 333-202550); and August 25, 2017 (File No. 333-220158).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 9, 2023

NOVA LTD.
(Registrant)

By: /s/ Dror David
—————————————

Dror David
Chief Financial Officer

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

Nova Reports Third Quarter 2023 Financial Results

REHOVOT, Israel - November 9, 2023 - Nova (Nasdaq: NVMI) today announced financial results for the third quarter, the three-month period ended September 30, 2023.

Third Quarter 2023 Highlights:

•

Quarterly revenue of $128.8 million, a 5% increase QoQ, exceeding the Company guidance.

•

GAAP net income of $33.7 million, or $1.05 per diluted share, a 12% increase QoQ, exceeding the Company guidance.

•

Non-GAAP net income of $39.4 million, or $1.23 per diluted share, a 16% increase QoQ, exceeding the Company guidance of $1.13.

•

Continued proliferation of materials metrology and chemical metrology solutions, driven by demand from memory customers looking to expand their DRAM and high bandwidth memory capacity.

•

New penetrations of optical metrology solutions, spearheaded by Nova PRISM and Nova FIT™.

•

Consistent growth of services business, reflecting an increased share of service contracts.

GAAP Results (K)

	Q3 2023	Q2 2023	Q3 2022
Revenues	$128,808	$122,702	$143,906
Net Income	$33,689	$29,926	$35,075
Earnings per Diluted Share	$1.05	$0.94	$1.10

Non-GAAP Results (K)

	Q3 2023	Q2 2023	Q3 2022
Net Income	$39,405	$33,814	$39,698
Earnings per Diluted Share	$1.23	$1.06	$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 performance this quarter exceeded the company’s revenue and profitability guidance and our goal is to maintain similar business levels in the next quarter as well, making the second half of 2023 stronger than the first,” said Gaby Waisman, President and CEO. “We were able to deliver beyond our earlier projections, by leveraging the growth in our materials metrology offering as well as the increasing adoption of our optical metrology solutions and the continuous strength of our service business. As we already look ahead toward 2024, we expect Nova to resume its growth and outperformance trajectory towards our $1B strategic plan.”

2023 Fourth Quarter Financial Outlook

Management provided an outlook for the fourth quarter, the period ending December 31, 2023. Based on current estimates, management expects:

•

$123 million to $132 million in revenue

•

$0.96 to $1.11 in diluted GAAP EPS

•

$1.16 to $1.31 in diluted non-GAAP EPS

2023 Third Quarter Results

Total revenues for the third quarter of 2023 were $128.8 million, an increase of 5% compared with the second quarter of 2023 and a decrease of 10% compared with the third quarter of 2022.

Gross margin in the third quarter of 2023 was 56%, compared with 57% in the second quarter of 2023 and 56% in the third quarter of 2022.

Operating expenses in the third quarter of 2023 were $38.1 million, compared with $40.9 million in the second quarter of 2023 and $41.9 million in the third quarter of 2022.

On a GAAP basis, the Company reported net income of $33.7 million, or $1.05 per diluted share, in the third quarter of 2023. This is compared with net income of $29.9 million, or $0.94 per diluted share, in the second quarter of 2023, and $35.1 million, or $1.10 per diluted share, in the third quarter of 2022.

On a non-GAAP basis, the Company reported net income of $39.4 million, or $1.23 per diluted share, in the third quarter of 2023. This is compared with net income of $33.8 million, or $1.06 per diluted share, in the second quarter of 2023, and $39.7 million, or $1.24 per diluted share, in the third quarter of 2022.

Conference Call Information

Nova will host a conference call today, November 09, 2023, at 8:30 a.m. Eastern Time, to discuss the Company’s third 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: 1-833-816-1427

ISRAEL TOLL-FREE Dial-in Number: 1809-213-284

INTERNATIONAL Dial-in Number: 1-412-317-0519

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 November 9, 2023, at 11:30 a.m. Eastern Time until November 16, 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: 10183091

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, stock-based compensation expenses, revaluation of operating lease liabilities and remeasurement of intercompany loans, 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: political, economic and military instability in Israel, including related to the recent attack by Hamas and other terrorist organizations from the Gaza Strip and Israel’s war against them; 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; 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
	September 30,		December 31,
	2023		2022
ASSETS
Current assets
Cash and cash equivalents		116,480		111,121
Short-term interest-bearing bank deposits		151,269		95,305
Marketable securities		206,160		167,073
Trade accounts receivable, net		91,861		109,320
Inventories		141,224		116,600
Other current assets		17,852		13,527
Total current assets		724,846		612,946
Non-current assets
Marketable securities		133,955		153,462
Interest-bearing bank deposits and restricted cash		5,901		2,083
Deferred tax assets		24,507		20,097
Operating lease right-of-use assets		42,095		44,885
Property plant and equipment, net		61,734		55,886
Intangible assets, net		39,014		43,586
Goodwill		48,830		49,009
Other long-term assets		3,277		2,151
Total non-current assets		359,313		371,159
Total assets		1,084,159		984,105
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Convertible senior notes, net		197,354		-
Trade accounts payable		26,268		42,732
Deferred revenues		42,222		30,543
Operating lease current liabilities		5,552		5,968
Other current liabilities		50,788		54,825
Total current liabilities		322,184		134,068
Non-current liabilities
Convertible senior notes, net		-		196,394
Operating lease long-term liabilities		38,802		43,697
Long-term deferred tax liability		10,432		12,190
Other long-term liabilities		11,961		10,793
Total non-current liabilities		61,195		263,074
Shareholders' equity		700,780		586,963
Total liabilities and shareholders' equity		1,084,159		984,105

NOVA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. dollars in thousands, except per share data) - (Unaudited)

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Revenues:
Products		99,971		116,634		300,929		340,666
Services		28,837		27,272		82,774		78,825
Total revenues		128,808		143,906		383,703		419,491
Total cost of revenues		56,567		63,065		164,538		184,942
Gross profit		72,241		80,841		219,165		234,549
Operating expenses:
Research and development, net		21,372		23,008		66,753		64,252
Sales and marketing		12,438		13,631		38,887		38,515
General and administrative		4,283		5,264		14,924		18,775
Total operating expenses		38,093		41,903		120,564		121,542
Operating income		34,148		38,938		98,601		113,007
Financing income, net		4,797		1,535		15,153		6,321
Income before taxes on income		38,945		40,473		113,754		119,328
Income tax expenses		5,256		5,398		15,512		15,213
Net income for the period		33,689		35,075		98,242		104,115

Earnings per share:
Basic		1.17		1.22		3.42		3.63
Diluted		1.05		1.10		3.07		3.26

Shares used in calculation of earnings per share (in thousands):
Basic		28,870		28,685		28,754		28,686
Diluted		31,983		31,892		32,033		31,956

NOVA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands) - (Unaudited)

	Three months ended September 30,						Nine months ended September 30,
	2023			2022			2023			2022
Cash flows from operating activities:
Net income		33,689			35,075			98,242			104,115
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment		2,772			2,094			7,588			6,130
Amortization of intangible assets		1,477			1,444			4,396			4,570
Amortization of premium and accretion of discount on marketable securities, net		(818	)		376			(1,867	)		1,920
Amortization of debt discount and issuance costs		324			322			960			960
Share-based compensation		4,571			4,334			12,632			12,266
Net effect of exchange rate fluctuation		2,589			1,140			4,345			4,111
Changes in assets and liabilities:
Trade accounts receivable, net		(9,258	)		(5,419	)		17,423			(22,213	)
Inventories		6,173			(14,608	)		(28,851	)		(27,143	)
Other current and long-term assets		(2,673	)		(2,078	)		(5,391	)		(10,149	)
Deferred tax assets, net		(1,713	)		(2,202	)		(6,056	)		(7,142	)
Operating lease right-of-use assets		1,150			997			2,791			3,032
Trade accounts payable		(9,452	)		6,281			(16,725	)		5,221
Deferred revenues		15,051			229			11,683			4,751
Operating lease liabilities		(2,050	)		(1,328	)		(5,312	)		(6,466	)
Other current and long-term liabilities		4,938			5,346			(1,680	)		(4,039	)
Accrued severance pay, net		(83	)		(52	)		(252	)		19
Net cash provided by operating activities		46,687			31,951			93,926			69,943
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		(52,415	)		39,957			(61,025	)		156,461
Investment in marketable securities		(68,737	)		(130,151	)		(166,877	)		(181,678	)
Proceeds from maturity of marketable securities		66,329			23,737			150,644			57,935
Purchase of property and equipment		(3,555	)		(4,928	)		(9,587	)		(12,885	)
Net cash provided by (used in) investing activities		(58,378	)		(71,385	)		(86,845	)		(58,636	)
Cash flows from financing activities:
Settlement of a contingent consideration liability		-			(8,480	)		-			(8,480	)
Purchases of treasury shares		-			(2,146	)		(112	)		(6,416	)
Proceeds from exercise of options		7			-			122			82
Net cash provided by (used in) financing activities		7			(10,626	)		10			(14,814	)
Effect of exchange rate fluctuations on cash and cash equivalents		(1,026	)		(1,423	)		(2,332	)		(4,377	)
Changes in cash and cash equivalents and restricted cash		(12,710	)		(51,483	)		4,759			(7,884	)
Cash and cash equivalents and restricted cash -beginning of period		129,190			170,297			111,721			126,698
Cash and cash equivalents - end of period		116,480			118,814			116,480			118,814

NOVA LTD.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(U.S. dollars in thousands, except percentage and per share data) - (Unaudited)

	Three months ended
	September 30, 2023			June 30, 2023			September 30, 2022
GAAP gross profit		72,241			69,658			80,841
Stock-based compensation*		1,173			1,071			1,114
Amortization of acquired intangible assets		1,369			1,368			1,289
Non-GAAP gross profit		74,783			72,097			83,244
GAAP gross margin as a percentage of revenues		56	%		57	%		56	%
Non-GAAP gross margin as a percentage of revenues		58	%		59	%		58	%

GAAP operating income		34,148			28,716			38,938
Stock-based compensation*		4,571			3,667			4,334
Amortization of acquired intangible assets		1,477			1,475			1,444
Non-GAAP operating income		40,196			33,858			44,716
GAAP operating margin as a percentage of revenues		27	%		23	%		27	%
Non-GAAP operating margin as a percentage of revenues		31	%		28	%		31	%

GAAP net income		33,689			29,926			35,075
Stock-based compensation*		4,571			3,667			4,334
Amortization of acquired intangible assets		1,477			1,475			1,444
Amortization of debt discount and issuance costs		324			320			322
Revaluation of operating lease and intercompany loans		423			(768	)		(572	)
Tax effect of non-GAAP adjustments		(1,079	)		(806	)		(905	)
Non-GAAP net income		39,405			33,814			39,698

GAAP basic earnings per share		1.17			1.04			1.22
Non-GAAP basic earnings per share		1.36			1.18			1.38

GAAP diluted earnings per share		1.05			0.94			1.10
Non-GAAP diluted earnings per share		1.23			1.06			1.24

Shares used for calculation of earnings per share (in thousands):
Basic		28,870			28,766			28,685
Diluted		31,983			31,928			31,892

* Stock-based compensation for the three months ended September 30, 2023, included in – Cost of revenues - 1,173; Research and development, net – 1,995; Sales and marketing – 863; General and administrative – 540.

NOVA LTD.
SUPPLEMENTAL INFORMATION - RECONCILIATION OF FOURTH QUARTER 2023
GAAP TO NON-GAAP GUIDANCE

(U.S. dollars) (Unaudited)

	Low			High
Estimated GAAP net income per diluted share		0.96			1.11
Estimated non-GAAP items:
Stock-based compensation		0.19			0.19
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		1.16			1.31

Enhanced Investments, Inc.
329 South Oyster Bay Road #2085
Plainview, NY 11803
team@eninvs.com

Important disclosures

Performance results were prepared by Enhanced Investments, and have not been compiled, reviewed or audited by an independent accountant. Performance estimates are subject to future adjustment and revision. Investors should be aware that a loss of investment is possible. Account holdings are for illustrative purposes only and are not investment recommendations. Additional information, including (i) the calculation methodology; and (ii) a list showing the contribution of each holding to the portfolio’s performance during the time period will be provided upon request.
All statements made via social media sites sponsored or maintained by Enhanced Investments and its affiliates are for informational purposes only and do not constitute a comprehensive description of Enhanced Investments' investment advisory services.
Certain investments are not suitable for all investors. Before investing, consider your investment objectives and applicable fees. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested. Information provided by Enhanced Investments is for informational and general educational purposes only and is not investment or financial advice.

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All statements made via social media sites sponsored or maintained by Enhanced Investments and its affiliates are for informational purposes only and do not constitute a comprehensive description of Enhanced Investments' investment advisory services.
Certain investments are not suitable for all investors. Before investing, consider your investment objectives and applicable fees. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested. Information provided by Enhanced Investments is for informational and general educational purposes only and is not investment or financial advice.