Cimatron Reports Net Profit of $0.4M on a Non-GAAP Basis in the Second Quarter of 2010
$3.9 Million Positive Cash Flow From Operating Activities in the First Half of 2010, a 19% Year-Over-Year Increase; Operating Results in the First Six Months of 2010 Improved by $1.1M Year-Over-Year
GIVAT SHMUEL, Israel, August 10, 2010 /PRNewswire-FirstCall/ -- Cimatron Limited (NASDAQ: CIMT) ("Cimatron" or the "Company"), a leading provider of integrated CAD/CAM solutions for the toolmaking and manufacturing industries, today announced financial results for the second quarter of 2010.
The following provides details on Cimatron's GAAP and non-GAAP results for the second quarter and first six months of 2010:
GAAP:
Revenues for the second quarter of 2010 were $8.4 million, compared to $8.1 million recorded in the second quarter of 2009. For the first six months of 2010, revenues were $16.3 million, compared to $16.0 million in the same period of 2009.
Gross Income for the second quarter of 2010 was $6.8 million as compared to $6.6 million in the same period in 2009. Gross margin in the second quarter of 2010 was 81% of revenues, same as in the second quarter of 2009. For the first six months of 2010, gross income was $13.5 million, compared to $12.9 million in the same period of 2009. Gross margin for the six months ended on June 30th, 2010 was 83% compared to a gross margin of 81% in the first six months of 2009.
Operating profit in the second quarter of 2010 was $350 thousand, compared to an operating loss of $(317) thousand in the second quarter of 2009. In the first six months of 2010, Cimatron recorded an operating profit of $247 thousand, compared to an operating loss of $(829) thousand in the first six months of 2009.
Net Profit for the second quarter of 2010 was $278 thousand, or $0.03 per diluted share, compared to a net loss of $(83) thousand, or $(0.01) per diluted share recorded in the same quarter of 2009. In the first six months of 2010 net profit was $178 thousand, or $0.02 per diluted share, compared to a net loss of $(646) thousand, or $(0.07) per diluted share, in the first six months of 2009.
Non-GAAP:
Revenues for the second quarter of 2010 were $8.4 million, compared to $8.1 million recorded in the second quarter of 2009. For the first six months of 2010, revenues were $16.3 million, compared to $16.0 million in the same period of 2009.
Gross Income for the second quarter of 2010 was $7.0 million as compared to $6.7 million in the same period in 2009. Gross margin in the second quarter of 2010 was 83% of revenues, same as in the second quarter of 2009. In the first six months of 2010, gross income was $13.8 million, compared to $13.2 million in the first six months of 2009. Gross margin for the six months ended on June 30th, 2010 was 84%, compared to 83% in the first six months of 2009.
Operating Profit in the second quarter of 2010 was $596 thousand, compared to an operating loss of $(70) thousand in the second quarter of 2009. In the first six months of 2010, Cimatron reports an operating profit of $739 thousand, compared to operating loss of $(335) thousand in the first six months of 2009.
Net profit for the second quarter of 2010 was $433 thousand, or $0.05 per diluted share, compared to a net profit of $73 thousand, or $0.01 per diluted share recorded in the same quarter of 2009. In the first six months of 2010, net profit was $488 thousand, or $0.05 per diluted share, compared to a net loss of $(332) thousand, or $(0.04) per diluted share, in the first six months of 2009.
Commenting on the results, Danny Haran, President and Chief Executive Officer of Cimatron, said "We are very pleased with the second quarter results. The market trends from the first quarter continue and even intensify to some extent. We see improvement over last year and over the first quarter of 2010, in spite of less favorable currency exchange rates. Market conditions in most key territories seem to be improving, although the short-term economic outlook is still unclear. The budget control measures that we took during 2009 now translate directly to our bottom line, as we expected. We remain committed to investing and promoting our two product lines, CimatronE and GibbsCAM, and keep looking for additional M&A opportunities", concluded Mr. Haran.
Conference Call
Cimatron's management will host a conference call tomorrow, August 11th, 2010 at 9:00 EST, 16:00 Israel time. On the call, management will review and discuss the results, and will answer questions by investors.
To participate, please call one of the following teleconferencing numbers. Please begin placing your call at least 5 minutes before the conference call commences.
USA: +1-888-668-9141
International: +972-3-9180610
Israel: 03-9180610
For those unable to listen to the live call, a replay of the call will be available from the day after the call at the investor relations section of Cimatron's website, at: http://www.cimatron.com
Reconciliation between results on a GAAP and Non-GAAP basis is provided in a table immediately following the Consolidated Statements of Income included herein. Non-GAAP financial measures consist of GAAP financial measures adjusted to include recognition of deferred revenues of acquired companies and to exclude amortization of acquired intangible assets and deferred income tax, as well as certain business combination accounting entries. The purpose of such adjustments is to give an indication of our performance exclusive of non-cash charges and other items that are considered by management to be outside of our core operating results. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP.
Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. We believe that these non-GAAP measures help investors to understand our current and future operating performance, especially as our two most recent acquisitions have resulted in amortization and non-cash items that have had a material impact on our GAAP results. These non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies.
About Cimatron
With over 25 years of experience and more than 40,000 installations worldwide, Cimatron is a leading provider of integrated, CAD/CAM solutions for mold, tool and die makers, as well as manufacturers of discrete parts. Cimatron is committed to providing comprehensive, cost-effective solutions that streamline manufacturing cycles, enable collaboration with outside vendors, and ultimately shorten product delivery time.
The Cimatron product line includes the CimatronE and GibbsCAM brands with solutions for mold design, die design, electrodes design, 2.5 to 5 axes milling, wire EDM, turn, Mill-turn, rotary milling, multi-task machining, and tombstone machining. Cimatron's subsidiaries and extensive distribution network serve and support customers in the automotive, aerospace, medical, consumer plastics, electronics, and other industries in over 40 countries worldwide.
Cimatron is publicly traded on the NASDAQ exchange under the symbol CIMT. For more information, please visit the company web site at: http://www.cimatron.com.
Safe Harbor Statement
This press release includes forward looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. Such statements may relate to the Company's plans, objectives and expected financial and operating results. The words "may," "could," "would," "will," "believe," "anticipate," "estimate," "expect," "intend," "plan," and similar expressions or variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the Company's ability to control. The risks and uncertainties that may affect forward looking statements include, but are not limited to: currency fluctuations, global economic and political conditions, marketing demand for Cimatron products and services, long sales cycle, new product development, assimilating future acquisitions, maintaining relationships with customers and partners, and increased competition. For more details about the risks and uncertainties that relate to the Company's business, refer to the Company's filings with the Securities and Exchange Commission. The Company cannot assess the impact of or the extent to which any single factor or risk, or combination of them, may cause. Cimatron undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.
CIMATRON LIMITED
CONSOLIDATED STATEMENTS OF INCOME
(US Dollars in thousands, except for per share data)
Three months ended Six months ended
June 30, June 30,
2010 2009 2010 2009
Total revenue 8,399 8,123 16,316 15,966
Total cost of revenue 1,572 1,539 2,823 3,047
Gross profit 6,827 6,584 13,493 12,919
Research and development
expenses, net 1,344 1,477 2,829 2,892
Selling, general and
administrative expenses 5,133 5,424 10,417 10,856
Operating income (loss) 350 (317) 247 (829)
Financial income
(expenses), net (130) 132 (182) (9)
Taxes on income 63 85 120 166
Other (9) - (8) 3
Net income (loss) 274 (100) 177 (669)
Less: Net loss
attributable to the
noncontrolling interest 4 17 1 23
Net income (loss)
attributable to
Cimatron's shareholders $ 278 $ (83) $ 178 $ (646)
Net income (loss)
per share - basic and
diluted $ 0.03 $ (0.01) $ 0.02 $ (0.07)
Weighted average number
of shares outstanding
Basic EPS (in thousands) 9,048 9,181 9,041 9,202
Diluted EPS (in
thousands) 9,048 9,181 9,041 9,202
CIMATRON LIMITED
RECONCILIATION BETWEEN GAAP AND NON-GAAP INFORMATION
(US Dollars in thousands, except for per share data)
Three months ended June 30,
2010 2009
GAAP Adj. NON-GAAP GAAP Adj. NON-GAAP
Total revenue 8,399 - 8,399 8,123 - 8,123
Total cost of
revenue (1) 1,572 (147) 1,425 1,539 (147) 1,392
Gross profit 6,827 147 6,974 6,584 147 6,731
Research and
development
expenses, net 1,344 - 1,344 1,477 - 1,477
Selling,
general and
administrative
expenses (1) 5,133 (99) 5,034 5,424 (100) 5,324
Operating income
(loss) 350 246 596 (317) 247 (70)
Financial income
(expenses), net (130) - (130) 132 - 132
Taxes on income (2) 63 (91) (28) 85 (91) (6)
Other (9) - (9) - - -
Net income (loss) 274 155 429 (100) 156 56
Less: Net loss
attributable to the
noncontrolling
interest 4 - 4 17 - 17
Net income (loss)
attributable to
Cimatron's
shareholders $ 278 $ 155 $ 433 $ (83) $ 156 $ 73
Net income
(loss) per share
- basic and
diluted $ 0.03 $ 0.05 $ (0.01) $ 0.01
Weighted average number of shares outstanding
Basic EPS
(in thousands) 9,048 9,048 9,181 9,181
Diluted EPS
(in thousands) 9,048 9,048 9,181 9,181
(Table Continued)
Six months ended June 30,
2010 2009
GAAP Adj. NON-GAAP GAAP Adj. NON-GAAP
Total revenue 16,316 - 16,316 15,966 - 15,966
Total cost of
revenue (1) 2,823 (294) 2,529 3,047 (294) 2,753
Gross profit 13,493 294 13,787 12,919 294 13,213
Research and
development
expenses, net 2,829 - 2,829 2,892 - 2,892
Selling,
general and
administrative
expenses (1) 10,417 (198) 10,219 10,856 (200) 10,656
Operating income
(loss) 247 492 739 (829) 494 (335)
Financial income
(expenses), net (182) - (182) (9) - (9)
Taxes on income (2) 120 (182) (62) 166 (180) (14)
Other (8) - (8) 3 - 3
Net income (loss) 177 310 487 (669) 314 (355)
Less: Net loss
attributable to the
noncontrolling
interest 1 - 1 23 - 23
Net income (loss)
attributable to
Cimatron's
shareholders $ 178 $ 310 $ 488 $ (646) $ 314 $ (332)
Net income
(loss) per share
- basic and
diluted $ 0.02 $ 0.05 $ (0.07) $ (0.04)
Weighted average number of shares outstanding
Basic EPS
(in thousands) 9,041 9,041 9,202 9,202
Diluted EPS
(in thousands) 9,041 9,041 9,202 9,202
(1) Non-GAAP adjustment to exclude non-cash amortization of acquired
intangible assets.
(2) Non-GAAP adjustment to exclude the effect of deferred taxes.
CIMATRON LIMITED
CONSOLIDATED BALANCE SHEETS
(US Dollars in thousands)
June 30, December 31,
2010 2009
ASSETS
CURRENT ASSETS:
Total cash, cash equivalents and short-term $ 9,229 $ 6,684
investments
Trade receivables 5,375 5,422
Other current assets 3,085 3,308
Total current assets 17,689 15,414
Deposits with insurance companies and 2,903 2,935
severance pay fund
Net property and equipment 805 1,046
Total other assets 12,663 13,285
Total assets $ 34,060 $ 32,680
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES:
Short-term bank credit $ 82 $ 456
Trade payables 1,484 1,064
Accrued expenses and other liabilities 6,715 6,991
Deferred revenues 5,450 2,397
Total current liabilities 13,731 10,908
LONG-TERM LIABILITIES:
Accrued severance pay 3,970 4,104
Long-term loan 132 204
Deferred tax liability 1,184 1,365
Total long-term liabilities 5,286 5,673
Total shareholders' equity 15,043 16,099
Total liabilities and shareholders' $ 34,060 $ 32,680
equity
CIMATRON LIMITED
STATEMENTS OF CHANGES IN SHAREHOLDERS'EQUITY
(US Dollars in thousands)
Accumulated
Additional other
Noncontrolling Share paid-in comprehensive
Interest capital capital income (loss)
Balance at December 31, 2009 $ (48) $ 304 $ 18,204 $ 75
Changes during the six months
ended June 30, 2010:
Net income (loss) (1)
Exercise of share options - 11
Unrealized loss on derivative (292)
instruments
Other (109)
Stock option compensation 29
Investment in treasury stock
Foreign currency translation (672)
adjustment
Total comprehensive loss
Balance at June 30, 2010 $ (49) $ 304 $ 18,244 $ (998)
Retained Treasury Comprehensive Total
earnings stock income shareholders'
(accumulated (loss) equity
deficit)
Balance at December
31, 2009 $ (1,894) $ (542) $ 16,099
Changes during the six months
ended June 30, 2010:
Net income (loss) 178 177 177
Exercise of share 11
options
Unrealized loss on derivative (292) (292)
instruments
Other (109) (109)
Stock option 29
compensation
Investment in treasury (200) (200)
stock
Foreign currency translation (672) (672)
adjustment
Total comprehensive loss (896)
Balance at June 30, 2010 $ (1,716) $ (742) $ 15,043
CIMATRON LIMITED
STATEMENTS OF CASH FLOWS
(US Dollars in thousands)
Six months
ended
June 30,
2010 2009
Cash flows from operating activities:
Net income $ 177 $ (669)
(loss)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Depreciation 777 832
and
amortization
Increase (decrease) in accrued severance pay (81) 62
Stock option 29 36
compensation
Deferred (127) (165)
taxes, net
Changes in
assets and
liabilities:
Decrease (increase) in accounts receivable and (391) 953
prepaid expenses
Decrease 1 (148)
(increase) in
inventory
Decrease (increase) in deposits with insurance 32 (125)
companies and severance pay fund
Increase in trade payables, accrued expenses 3,513 2,534
and other liabilities
Net cash provided by operating activities 3,930 3,310
Cash flows from investing activities:
Purchase of property and equipment (55) (166)
Net cash used in investing activities (55) (166)
Cash flows from financing activities:
Short-term bank (358) (39)
credit
Long-term (61) (101)
bank
credit
Proceeds from issuance of shares upon exercise 11 -
of options
Investment in (200) (95)
treasury stock
Net cash used in financing activities (608) (235)
Net increase in cash and cash equivalents 3,267 2,909
Effect of exchange rate changes on cash (722) (41)
Cash and cash equivalents at beginning of 6,684 5,727
period
Cash and cash equivalents at end of period $ 9,229 $ 8,595
Appendix A - Non-cash transactions
Purchase of property on credit $ 17 $ 5
Contact:
Ilan Erez, Chief Financial Officer
Cimatron Ltd.
Tel: +972-3-531-2121
E-mail: [email protected]
SOURCE Cimatron Ltd
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