Camtek Announces Third Quarter 2010 Results
65% Year Over Year Growth in Revenue and Increasing Profitability
MIGDAL HAEMEK, Israel, November 4, 2010 /PRNewswire-FirstCall/ -- Camtek Ltd. (NASDAQ and TASE: CAMT), today announced its financial results for the quarter ended September 30, 2010.
Financial Highlights of the Third Quarter
- Revenues of $23.9 million representing a 65% year-over-year
increase and a 15% sequential increase;
- Non-GAAP operating income of $2.5 million compared with a
non-GAAP operating loss of $0.1 million in the third quarter of 2009.
GAAP operating income reached $2.3 million; and
- Non-GAAP net income of $2.5 million compared with a non-GAAP
net loss of $0.3 million in the third quarter of 2009. GAAP net income
reached $2.0 million;
Results for the three and nine months ended September 30, 2010 on a non-GAAP basis, exclude the following items: (i) expenses with respect to the acquisitions of SELA and Printar; (ii) share based compensation expenses; and (iii) restructuring expenses due to reorganization in the Company's subsidiaries in Europe and China. Reconciliation between the GAAP and non-GAAP results appears in the tables at the end of this press release.
Third Quarter 2010 Financial Results
Revenues for the third quarter of 2010 increased 65% to $23.9 million, compared to $14.5 million in the third quarter of 2009. Revenues grew 15% sequentially, representing the sixth quarter of continued sequential growth. This growth is a result of the continued increase in demand from customers, due to improving market conditions as well as penetration into new customers and sales of new products.
Gross profit on a GAAP basis for the quarter was $10.9 million (45.6% of revenues), compared to gross profit of $6.1 million (42% of revenues) in the third quarter of 2009. On a non-GAAP basis, gross profit for the third quarter of 2010 totaled $10.9 million (45.8% of revenues). The improvement in the gross margin resulted mainly from the increase in revenues.
Operating income on a GAAP basis in the third quarter of 2010 was $2.3 million (9.7% of revenues) compared with an operating loss of $179 thousand in the third quarter of 2009. Non-GAAP operating income was $2.5 million (10.5% of revenues) in the third quarter of 2010.
Net income on a GAAP basis for the third quarter of 2010 totaled $2.0 million, or $0.07 per diluted share, compared to a net loss of $0.3 million, or a loss of $0.01 per share in the third quarter of 2009. On a non-GAAP basis, net income in the third quarter of 2010 was $2.5 million, or $0.09 per diluted share.
Cash and cash equivalents including restricted cash as of September 30, 2010 was $13.1 million (of which $5.2 million is restricted), and the Company owed bank debt of $2 million, compared to $14.1 million of unrestricted cash and cash equivalents and no bank debt, at the end of the prior quarter. The decrease in the cash level in the quarter, resulted mainly from a negative operating cash flow of $0.9 million, due to an increase in accounts receivable and inventory, because of the increase in sales as well as the Company's expectations for increased future demand. The Company also repaid a loan of $1.7 million to a third party in the third quarter.
In August 2010, the Company signed an agreement with an Israeli bank for a credit line totaling $11.5 million. Out of that, $2.6 million is a bank loan out of which the Company has already utilized $2 million, and the remaining $8.9 million is a bank guarantee to support a bond deposited with the U.S. Federal District Court in Minnesota, in order to stay judgment during the appeal process in a patent infringement case filed against Camtek by a competitor. To secure the above credit line, the Company deposited $5.2 million of its cash as restricted cash.
Roy Porat, Camtek's Chief Executive Officer, commented, "We are very pleased with our third quarter results, which demonstrated very strong growth on both a sequential and year-over-year basis. The markets in which we traditionally operate continue to be in high utilization, with customers actively expanding their capacity by investing in capital equipment. In addition, our new product lines of Macro Inspection and Sample Preparation are gaining increasing traction in the market, and we achieved sales and important penetrations into new customers for both product lines. Our semiconductor revenues have become an important portion of our overall mix."
Concluded Mr. Porat, "In terms of our outlook for the fourth quarter, we anticipate maintaining our current high quarterly revenue level, coming in between $22-$25 million. We also expect our operating cash flow will improve in the fourth quarter and into next year. Finally, we believe that we will continue to grow into 2011, particularly as our new products and growth engines begin to more significantly contribute to our revenues."
Conference Call
Camtek will host a conference call today, November 4, 2010, at 11:00 am ET.
Roy Porat, Chief Executive Officer and Mira Rosenzweig, Chief Financial Officer, will host the call and will be available to answer questions after presenting the results.
To participate, please call one of the following telephone numbers a few minutes before the start of the call.
US: 1-866-860-9642 at 11:00 am Eastern Time
Israel: 03-918-0609 at 5:00 pm Israel Time
International: +972-3-918-0609
For those unable to participate, the teleconference will be available for replay on Camtek's website at http://www.camtek.co.il/ beginning 24 hours after the call.
ABOUT CAMTEK LTD.
Camtek Ltd provides automated solutions dedicated for enhancing production processes and yield, enabling our customers new technologies in two industries: Semiconductors, Printed Circuit Board (PCB) & IC Substrates.
Camtek addresses the specific needs of these industries with dedicated solutions based on a wide and advanced platform of technologies including intelligent imaging, image processing, ion milling and digital material deposition. Camtek's solutions range from micro-to-nano by applying its technologies to the industry-specific requirements.
This press release is available at http://www.camtek.co.il.
This press release may contain projections or other forward-looking statements regarding future events or the future performance of the Company. These statements are only predictions and may change as time passes. We do not assume any obligation to update that information. Actual events or results may differ materially from those projected, including as a result of changing industry and market trends, reduced demand for our products, the timely development of our new products and their adoption by the market, increased competition in the industry, intellectual property litigation, price reductions as well as due to risks identified in the documents filed by the Company with the SEC.
Use of non-GAAP Measures
This press release provides financial measures that exclude certain items 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 our performance. 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 uses both GAAP and non-GAAP measures when evaluating the business internally and therefore felt it is important to make these non-GAAP adjustments available to investors.
Camtek Ltd.
Balance Sheet
September December
30, 31,
2010 2009
U.S. Dollars
(In thousands)
Assets
Current assets
Cash and cash equivalents 7,977 15,802
Accounts receivable, net 30,812 18,712
Inventories 20,989 14,176
Due from affiliates - 344
Other current assets 2,894 1,691
Deferred tax asset 68 68
Total current assets 62,740 50,793
Fixed assets, net 15,002 15,394
Restricted deposits * 5,175 -
Long term inventory 2,600 4,661
Deferred tax asset 98 98
Other assets, net 460 460
Intangible assets ** 4,225 4,356
Goodwill 3,653 3,653
16,211 13,228
Total assets 93,953 79,415
Liabilities and shareholders' equity
Current liabilities
Short term bank loans 682 -
Due to affiliates 34 -
Accounts payable - trade 11,536 4,494
Long term bank loans - current portion 433 -
Convertible loan - current portion - 1,666
Other current liabilities 17,746 12,945
Total current liabilities 30,431 19,105
Long term liabilities
Long term bank loans 867 -
Liability for employee severance benefits 570 487
Other long term liabilities ** 9,438 8,802
10,875 9,289
Total liabilities 41,306 28,394
Commitments and contingencies
Shareholders' equity
Ordinary shares NIS 0.01 par value, authorized
100,000,000 shares,
issued 31,355,236 as of September 30, 2010 and
31,328,119 as of December 31, 2009, outstanding
29,262,860 as of September 30,
2010 and 29,235,743 as of December 31, 2009 132 132
Additional paid-in capital 60,420 60,297
Retained earnings (accumulated losses) (6,007) (7,510)
54,545 52,919
Treasury stock, at cost ( 2,092,376 as of September
30, 2010
and as of December 31, 2009) (1,898) (1,898)
Total shareholders' equity 52,647 51,021
Total liabilities and shareholders' equity 93,953 79,415
(*) Restricted cash pledged against bank guarantee related to the Rudolph Technologies appeal
(**) Relates to Printar and SELA acquisitions
Camtek Ltd.
Consolidated Statements of Operations
(In thousands, except share data)
Nine Months Three Months Year
ended ended ended
September 30, September 30,December 31,
2010 2009 2010 2009 2009
U.S. dollars U.S. dollars U.S.dollars
Revenues 62,348 36,299 23,915 14,500 53,521
Cost of revenues 35,616 22,550 13,019 8,404 36,039
Gross profit 26,732 13,749 10,896 6,096 17,482
Research and development 9,312 7,548 3,088 2,651 10,319
costs
Selling, general and
administrative
expenses 14,319 13,486 5,495 3,623 17,667
23,631 21,034 8,583 6,274 27,986
Operating income (loss) 3,101 (7,285) 2,313 (178) (10,504)
Financial expenses, net (1,244) (353) (233) (72) (952)
Income (loss) before income
taxes 1,857 (7,638) 2,080 (250) (11,456)
Income tax (354) (220) (90) (75) (386)
Net income (loss) 1,503 (7,858) 1,990 (325) (11,842)
Net income (loss) per
ordinary share:
Basic 0.05 (0.27) 0.07 (0.01) (0.40)
Diluted 0.05 (0.27) 0.07 (0.01) (0.40)
Weighted average number of
ordinary shares outstanding:
Basic 29,253 29,210 29,263 29,218 29,218
Diluted 30,002 29,210 30,031 29,218 29,218
Camtek Ltd.
Reconciliation of GAAP To Non-GAAP results
(In thousands, except share data)
Nine Months Three Months Year
ended ended ended
September 30, September 30,December 31,
2010 2009 2010 2009 2009
U.S. dollars U.S. dollars U.S.dollars
Reported net income (loss) 1,503 (7,858) 1990 (325) (11,842)
attributable to Camtek Ltd.
on GAAP basis
Acquisition of Sela and Printar
related expenses (1) 1,707 - 434 - 1,264
Inventory write -downs (2) - - - - 3,213
Share-based compensation 123 163 41 61 148
Write off of other assets - - - - 102
Restructuring expenses (3) 357 - 92 - -
Non-GAAP net income (loss) 3,688 (7,695) 2,556 (264) (7,117)
Non -GAAP net income (loss) per 0.12 (0.26) 0.09 (0.09) (0.24)
share , basic and diluted
Gross margin on GAAP basis
43.8% 37.9% 45.6% 42% 33%
Reported gross profit on GAAP
basis 26,732 13,749 10,896 6,096 17,482
Acquisition of Sela and Printar
related expenses ( 1) 571 - 54 - 396
Inventory write off (2) - - - - 3,213
Non GAAP gross margin 43.8% 37.9% 45.8% 42% 39%
Non-GAAP gross profit 27,301 13,749 10,949 6,096 21,093
Reported operating income (loss )
attributable to Camtek Ltd. on
GAAP basis
3,101 (7,285) 2,313 (178) (10,504)
Acquisition of Sela and Printar
related expenses (1)
571 - 54 - 678
Inventory write- downs (2)
- - - - 3,213
Share-based compensation
123 163 41 61 148
Write of other assets
- - - - 102
Restructuring expenses (3)
357 - 92 - -
Non-GAAP operating income (loss) 4,152 (7,122) 2,500 (117) (6,363)
(1) During the three and nine months ended September 30, 2010 and the twelve months ended December 31, 2009, the Company recorded acquisition expenses of $0.63 million, $1.7 million, and $1.3 million, respectively, consisting of: (1) inventory written-up to fair value in purchase accounting charges of $0 million, $0.4 million and $0.4 million, respectively. These amounts are recorded under cost of revenues line item. (2) Revaluation adjustments of $0.4 million, $1.1 million and $0.6 million, respectively, of contingent consideration and certain future liabilities recorded at fair value. These amounts are recorded under finance expenses line item and (3) $0.05 million, $0.15 million and $0.1 million with respect to amortization of intangible assets acquired recorded under cost of revenues line item.
The twelve months ended December 31, 2009 also include restructuring expenses of $0.2 million related to the integration of the acquired operations, mainly the abandonment of certain rented properties, recorded under general and administrative expenses line item.
(2) During the year ended December 31, 2009 the Company recorded inventory write downs in the amount of $2.6 million due to a strategic decision by the Company to discontinue certain old products and an additional amount of $0.6 million, from a write down of software purchased from a former single source supplier which has been replaced by internally developed software.
(3) The Company has entered into a Memorandum of Understanding with a Belgian company, according to which, commencing June 2010, this company will distribute the Company's products for the PCB industry in Europe, subject to and in accordance with terms and conditions referred to in the agreement. Therefore the Company implemented a restructuring plan in its Belgium subsidiary which includes mainly a reduction in workforce and recorded $0.3 million as restructuring expenses under selling, general and administrative expenses line item.
During the third quarter of 2010 the Company recorded $0.1 million of restructuring expense with respect to reorganization plan to be implemented in its subsidiaries in China.
CAMTEK LTD.
Mira Rosenzweig, CFO
Tel: +972-4-604-8308
Mobile: +972-54-9050703
[email protected]
INTERNATIONAL INVESTOR RELATIONS
CCG Investor Relations
Ehud Helft / Kenny Green
Tel: +1-646-201-9246
[email protected]
SOURCE Camtek Ltd
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