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Published: 2022-11-03 07:30:14 ET
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6-K 1 zk2228643.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 2022
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 Results for Third Quarter of 2022”.

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 3, 2022

 
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 Results for Third Quarter of 2022
 
Rehovot, Israel, November 3, 2022 - Nova (Nasdaq: NVMI) today announced financial results for the third quarter, the three-month period ended September 30, 2022.
 
Third Quarter 2022 Highlights:


 •
Record quarterly revenue of $143.9 million


•
GAAP net income of $35.1 million, or $1.10 per diluted share


•
Non-GAAP net income of $39.7 million, or $1.24 per diluted share


•
Record sales of Optical CD Integrated Metrology platforms


•
Diverse revenue mix, propelled by a growing customer base across industry sectors
 
GAAP Results ($K)

 
Q3 2022
Q2 2022
Q3 2021
Revenues
$143,906
$141,628
$112,713
Net Income
$35,075
$34,878
$30,335
Earnings per Diluted Share
$1.10
$1.09
$1.02
 
Non-GAAP Results ($K)

 
Q3 2022
Q2 2022
Q3 2021
Net Income
 $ 39,698
 $ 39,546
$34,546
Earnings per Diluted Share
 $1.24
 $1.24
$1.16
 
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 reported a strong third quarter, demonstrating the agility of our business model and the expanding diversification of our revenue mix across geographies and industry segments,” commented Eitan Oppenhaim, President and Chief Executive Officer. “Our solid performance in this dynamic environment was driven by the unique value we are consistently adding to our customers and our unwavering execution of Nova’s long-term strategic targets. Along with our compelling guidance for the fourth quarter, Nova stands to conclude 2022 as a record year, establishing the foundation for Nova’s recently introduced $1 billion long-term strategic plan."
 
2022 Fourth Quarter Financial Outlook
 
Management provided an outlook for the fourth quarter, the period ending December 31, 2022. Based on current estimates, management expects:
 

 •
$142 million to $152 million in revenue
 

 •
$0.99 to $1.16 in diluted GAAP EPS
 

 •
$1.15 to $1.32 in diluted non-GAAP EPS
 
2022 Third Quarter Results
 
Total revenues for the third quarter of 2022 were $143.9 million, an increase of 2% compared with the second quarter of 2022 and an increase of 28% compared with the third quarter of 2021.
 
Gross margin in the third quarter of 2022 was 57%, compared with 57% in the second quarter of 2022 and compared with 58% in the third quarter of 2021.
 
Operating expenses in the third quarter of 2022 were $43.2 million, compared with $43.4 million in the second quarter of 2022 and $29.7 million in the third quarter of 2021.
 
On a GAAP basis, the Company reported net income of $35.1 million, or $1.10 per diluted share, in the third quarter of 2022. This is compared with net income of $34.9 million, or $1.09 per diluted share, in the second quarter of 2022, and net income of $30.3 million, or $1.02 per diluted share, in the third quarter of 2021.
 
On a non-GAAP basis, the Company reported net income of $39.7 million, or $1.24 per diluted share, in the third quarter of 2022. This is compared with net income of $39.5 million, or $1.24 per diluted share, in the second quarter of 2022, and net income of $34.5 million, or $1.16 per diluted share, in the third quarter of 2021.
 
Conference Call Information
 
Nova will host a conference call today, November 3, 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: 1-844-826-3035
ISRAEL TOLL-FREE Dial-in Number: 1-809-213284
INTERNATIONAL Dial-in Number: 1-412-317-5159

At:
8:30 a.m. Eastern Time
5:30 a.m. Pacific Time
2:30 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 3, 2022, at 11:30 a.m. Eastern Time to November 10, 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: 10171951

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
  

 
September 30,
2022
    
December 31,
2021
  
ASSETS
            
Current assets
            
Cash and cash equivalents
    
118,814
      
126,698
  
Short-term interest-bearing bank deposits
    
65,436
      
221,897
  
Marketable securities
    
150,980
      
61,568
  
Trade accounts receivable, net
    
98,909
      
68,446
  
Inventories
    
115,608
      
78,665
  
Other current assets
    
19,388
      
9,242
  
                 
Total current assets
    
569,135
      
566,516
  
                 
Non-current assets
                
Marketable securities
    
161,824
      
137,415
  
Interest-bearing bank deposits
    
3,223
      
3,672
  
Restricted interest-bearing bank deposits
    
1,600
      
1,600
  
Deferred tax assets
    
13,160
      
6,161
  
Severance pay funds
    
1,192
      
1,327
  
Operating lease right-of-use assets
    
44,924
      
30,627
  
Property and equipment, net
    
48,734
      
34,460
  
Intangible assets, net
    
41,719
      
2,601
  
Goodwill
    
47,421
      
20,114
  
Other long-term assets
    
879
      
661
  
                 
Total non-current assets
    
364,676
      
238,638
  
Total assets
    
933,811
      
805,154
  
                 
 LIABILITIES AND SHAREHOLDERS’ EQUITY
                
Current liabilities
                
Convertible senior notes, net
    
-
      
183,037
  
Trade accounts payable
    
43,376
      
36,218
  
Deferred revenues
    
20,019
      
15,338
  
Operating lease current liabilities
    
6,020
      
4,452
  
Other current liabilities
    
49,247
      
48,885
  
                 
Total current liabilities
    
118,662
      
287,930
  
                 
Non-current liabilities
                
Convertible senior notes, net
    
196,072
      
-
  
Accrued severance pay
    
3,570
      
3,686
  
Operating lease long-term liabilities
    
42,728
      
33,450
  
Long-term deferred tax liability
    
11,585
      
-
  
Other long-term liabilities
    
8,146
      
6,334
  
                 
Total non-current liabilities
    
262,101
      
43,470
  
Shareholders' equity
    
553,048
      
473,754
  
Total liabilities and shareholders' equity
    
933,811
      
805,154
  

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,
  
   
2022
    
2021
    
2022
    
2021
  
Revenues:
                        
Products
    
116,634
      
92,552
      
340,666
      
237,128
  
Services
    
27,272
      
20,161
      
78,825
      
57,464
  
Total revenues
    
143,906
      
112,713
      
419,491
      
294,592
  
Total cost of revenues
    
61,776
      
47,475
      
180,823
      
125,480
  
                                 
Gross profit
    
82,130
      
65,238
      
238,668
      
169,112
  
                                 
Operating expenses:
                                
Research and development, net
    
23,008
      
15,858
      
64,252
      
45,717
  
Sales and marketing
    
13,476
      
9,145
      
38,064
      
28,117
  
General and administrative
    
5,264
      
4,135
      
18,775
      
11,062
  
Amortization of intangible assets
    
1,444
      
574
      
4,570
      
1,723
  
Total operating expenses
    
43,192
      
29,712
      
125,661
      
86,619
  
                                 
Operating income
    
38,938
      
35,526
      
113,007
      
82,493
  
Financing income (expense), net
    
1,535
      
(889
)
    
6,321
      
(1,615
)
                                 
Income before taxes on income
    
40,473
      
34,637
      
119,328
      
80,878
  
Income tax expenses
    
5,398
      
4,302
      
15,213
      
10,003
  
                                 
Net income for the period
    
35,075
      
30,335
      
104,115
      
70,875
  
                                 
Earnings per share:
                                
Basic
    
1.22
      
1.07
      
3.63
      
2.50
  
Diluted
    
1.10
      
1.02
      
3.26
      
2.39
  
                                 
Shares used in calculation of earnings per share
 (in thousands):
                                
Basic
    
28,685
      
28,429
      
28,686
      
28,316
  
Diluted
    
31,892
      
29,858
      
31,956
      
29,660
  

NOVA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands) - (Unaudited)

   
Three months ended
September 30,
    
Nine months ended
September 30,
  
   
2022
    
2021
    
2022
    
2021
  
Cash flows from operating activities:
                        
                                 
Net income
    
35,075
      
30,335
      
104,115
      
70,875
  
                                 
Adjustments to reconcile net income to net cash provided by operating activities:
                                
Depreciation of property and equipment
    
2,094
      
1,619
      
6,130
      
4,794
  
Amortization of intangible assets
    
1,444
      
574
      
4,570
      
1,723
  
Amortization of premium and accretion of discount on marketable securities, net
    
376
      
570
      
1,920
      
853
  
Amortization of debt discount and issuance costs
    
322
      
1,069
      
960
      
3,154
  
Share-based compensation
    
4,334
      
2,642
      
12,266
      
6,992
  
Net effect of exchange rate fluctuation
    
1,140
      
(63
)
    
4,111
      
(51
)
Changes in assets and liabilities:
                                
Trade accounts receivables, net
    
(5,419
)
    
(6,423
)
    
(22,213
)
    
(1,316
)
Inventories
    
(14,608
)
    
(2,245
)
    
(27,143
)
    
(12,493
)
Other current and long-term assets
    
(2,078
)
    
(276
)
    
(10,149
)
    
(884
)
Deferred tax assets, net
    
(2,202
)
    
(534
)
    
(7,142
)
    
(2,248
)
Operating lease right-of-use assets
    
997
      
374
      
3,032
      
1,191
  
Trade accounts payables
    
6,281
      
2,527
      
5,221
      
4,898
  
Deferred revenues
    
229
      
18,319
      
4,751
      
27,193
  
Operating lease liabilities
    
(1,328
)
    
117
      
(6,466
)
    
(1,068
)
Other current and long-term liabilities
    
5,346
      
4,027
      
(4,039
)
    
8,332
  
Accrued severance pay, net
    
(52
)
    
(1
)
    
19
      
54
  
                                 
Net cash provided by operating activities
    
31,951
      
52,631
      
69,943
      
111,999
  
                                 
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
    
39,957
      
(15,335
)
    
156,461
      
(68,679
)
Investment in marketable securities
    
(130,151
)
    
(107,261
)
    
(181,678
)
    
(208,727
)
Proceeds from maturities of marketable securities
    
23,737
      
6,521
      
57,935
      
7,721
  
Purchase of property and equipment
    
(4,928
)
    
(760
)
    
(12,885
)
    
(2,566
)
                                 
Net cash provided by (used in) investing activities
    
(71,385
)
    
(116,835
)
    
(58,636
)
    
(272,251
)
                                 
Cash flows from investment activities:
                                
Settlement of a contingent consideration liability
    
(8,480
)
    
-
      
(8,480
)
    
-
  
Purchases of treasury shares
    
(2,146
)
    
-
      
(6,416
)
    
-
  
Proceeds from exercise of options
    
-
      
11
      
82
      
11
  
                                 
Net cash used in financing activities
    
(10,626
)
    
11
      
(14,814
)
    
11
  
                                 
Effect of exchange rate fluctuations on cash and cash equivalents
    
(1,423
)
    
30
      
(4,377
)
    
64
  
                                 
Changes in cash and cash equivalents
    
(51,483
)
    
(64,163
)
    
(7,884
)
    
(160,177
)
Cash and cash equivalents - beginning of period
    
170,297
      
136,290
      
126,698
      
232,304
  
Cash and cash equivalents - end of period
    
118,814
      
72,127
      
118,814
      
72,127
  
 
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,
2022
    
June 30,
2022
    
September 30,
2021
  
GAAP gross profit
    
82,130
      
80,388
      
65,238
  
Stock-based compensation*
    
1,114
      
1,021
      
557
  
Acquisition-related inventory step-up
    
-
      
366
      
-
  
Non-GAAP gross profit
    
83,244
      
81,775
      
65,795
  
GAAP gross margin as a percentage of revenues
    
57
%
    
57
%
    
58
%
Non-GAAP gross margin as a percentage of revenues
    
58
%
    
58
%
    
58
%
                         
GAAP operating income
    
38,938
      
36,963
      
35,526
  
Stock-based compensation*
    
4,334
      
4,072
      
2,642
  
Acquisition-related inventory step-up
    
-
      
366
      
-
  
Acquisition-related expenses and contingent
     consideration revaluation
    
-
      
2,392
      
-
  
Amortization of acquired intangible assets
    
1,444
      
1,513
      
574
  
Non-GAAP operating income
    
44,716
      
45,306
      
38,742
  
GAAP operating margin as a percentage of revenues
    
27
%
    
26
%
    
32
%
Non-GAAP operating margin as a percentage of revenues
    
31
%
    
32
%
    
34
%
                         
GAAP net income
    
35,075
      
34,878
      
30,335
  
Stock-based compensation*
    
4,334
      
4,072
      
2,642
  
Acquisition-related inventory step-up
    
-
      
366
      
-
  
Acquisition-related expenses and contingent
     consideration revaluation
    
-
      
2,392
      
-
  
Amortization of acquired intangible assets
    
1,444
      
1,513
      
574
  
Amortization of debt discount and issuance costs
    
322
      
318
      
1,069
  
Revaluation of operating lease liabilities
    
(572
)
    
(3,350
)
    
217
  
Tax effect of non-GAAP adjustments
    
(905
)
    
(643
)
    
(291
)
Non-GAAP net income
    
39,698
      
39,546
      
34,546
  
                         
GAAP basic earnings per share
    
1.22
      
1.22
      
1.07
  
Non-GAAP basic earnings per share
    
1.38
      
1.38
      
1.22
  
                         
GAAP diluted earnings per share
    
1.10
      
1.09
      
1.02
  
Non-GAAP diluted earnings per share
    
1.24
      
1.24
      
1.16
  
                         
Shares used for calculation of earnings per share (in thousands):
                        
Basic
    
28,685
      
28,688
      
28,429
  
Diluted
    
31,892
      
31,902
      
29,858
  

* Stock-based compensation for the three months ended Sep 30, 2022 included in – Cost of revenues - 1,114; Research and development, net – 1,786; Sales and marketing – 827; General and administrative  – 607.

NOVA LTD.
SUPPLEMENTAL INFORMATION - RECONCILIATION OF FOURTH QUARTER 2022
GAAP TO NON-GAAP GUIDANCE
(Unaudited)

   
Low
    
High
  
Estimated GAAP net income per diluted share
    
0.99
      
1.16
  
Estimated non-GAAP items:
                
Stock-based compensation
    
0.13
      
0.13
  
Amortization of acquired intangible assets
    
0.05
      
0.05
  
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
    
1.15
      
1.32