"The fourth quarter and 2010 as a whole were excellent by any metric", said Nova Measuring Instruments Ltd. (Nasdaq:NVMI; TASE:NVMI) president and CEO Gabi Seligsohn, on the company's financial report for the fourth quarter and full-year of 2010. "Wherever you look, revenue, increased market share, cash flow, and of course, earnings per share. I admit that we were surprised, and we had to update our guidance."
Nova estimated that its 2010 revenue would be $58-63 million; actual revenue rose 120% to $86.6 million from $39.3 million in 2009. Non-GAAP net profit rose nine-fold to $22.2 million ($0.86 per share) from in $2.6 million 2009.
Nova manufactures integrated and stand-alone metrology systems for the semiconductor industry. It is more cautious about 2011. Its guidance for the first quarter predicts $27.5-29.5 million revenue and a net profit margin of 25-28%. Seligsohn told "Globes", "We currently have 4-6 months visibility with a degree of certainty, and there are good indications for the full year, but not at a level that allows us to provide an accurate range for the rest of the year."
Seligsohn attributed the company's growth in 2010 to increased capital investment by semiconductor companies. Investment peaked at $36 billion in 2009, fell for two years, before recovering to $28 billion last year. Industry analysts predict 10-15% capital expenditure growth in 2011.
Seligsohn said, "We feel confident enough to say that this will be the third consecutive year in which we will outperform industry growth, thanks to our rapid increase of sales of stand-alone metrology solutions to customers, and because the optical inspection equipment segment will continue to outperform the rest of the industry. Customers want to use this technology.
"We now sell to eight of the ten largest semiconductor companies, which account for 80% of investment by the industry. We're in the right place."
Nova's fourth quarter revenue rose 77% to $27 million from $12.6 million for the corresponding quarter. Net profit nearly tripled to $7.5 million ($0.28 per share) from $2.7 million for the corresponding quarter. Cash flow from operations totaled $6.7 million for the fourth quarter.
Although the company's fourth quarter revenue was $2.8 million more than in the preceding quarter, increased development expenses narrowed the increase in net profit to $219,000.
Seligsohn said, "We must create growth engines, and some of the investment goes to the sector in which the industry is headed - the installation of one chip on another, which cuts the area by 30% and actual energy consumption by even more. This could open a new $250 million market for us. We'll unveil the first systems in the second half of 2011, and we'll begin to see revenue in 2012. Together with our current sectors, this should bring us to $40 million in quarterly revenue in 2013."
Nova's share price rose 6.6% in early trading on Nasdaq today to $10.87, giving a market cap of $294 million, after rising 8.4% on the TASE to NIS 39.29.
Published by Globes [online], Israel business news - www.globes-online.com - on February 15, 2011
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