Camtek Announces Record Results for the Third Quarter of 2018
MIGDAL HAEMEK, Israel, Oct. 31, 2018 /PRNewswire/ -- Camtek Ltd. (NASDAQ: CAMT) (TASE: CAMT), today announced its financial results for the quarter ended September 30, 2018.
Highlights of the Third Quarter 2018
-- Revenues were a record at $32.3 million, up 35% year-over-year and ahead
of the upper-end of the previously issued guidance range of $31-32
million;
-- GAAP gross margin was 50.2%; Non-GAAP gross margin was 50.4%;
-- GAAP operating income was $5.6 million and non-GAAP operating income was
$6.2 million, representing margins of 17.2% and 19.2%, respectively;
-- GAAP net income of $5.1 million or $0.14 per diluted share and non-GAAP
net income of $5.7 million or $0.16 per diluted share, representing
year-over-year growth of 84% and 100%, respectively and;
-- Operating cash flow of $7.1 million;
Forward Looking Guidance
Fourth quarter 2018 revenues are expected to increase to $32.5-33.5 million, implying full year 2018 revenues of approximately $123 million, and representing a 2018 year-over-year increase in revenues of over 30%.
Furthermore, management expects the growth to continue into the first quarter of 2019.
Management Comment
Rafi Amit Camtek's CEO commented, "2018 is shaping to be another record year for Camtek, and we are on track for revenue growth in excess of 30% for the year with solid improvements in profitability. Our primary target market, semiconductor advanced packaging, continues to gain strong traction. As a result, we expect growth to continue into the fourth quarter of 2018 and the first quarter of 2019."
The financial results and the comparison to 2017 in this press release include only those of the continuing operations. Camtek sold its PCB operations in the third quarter of 2017.
Third Quarter 2018 Financial Results
Revenues for the third quarter of 2018 were $32.3 million. This compares to third quarter 2017 revenues of $23.8 million, a growth of 35%.
Gross profit on a GAAP basis in the quarter totaled $16.2 million (50.2% of revenues), compared to a gross profit of $11.8 million (49.3% of revenues) in the third quarter 2017. Gross profit on a non-GAAP basis in the quarter totaled $16.2 million (50.4% of revenues), compared to $11.8 million (49.4% of revenues) in the third quarter 2017.
Operating profit on a GAAP basis in the quarter totaled $5.6 million (17.2% of revenues), compared to an operating income of $2.8 million (12.0% of revenues) in the third quarter 2017. Operating profit on a non-GAAP basis in the quarter totaled $6.2 million (19.2% of revenues), compared to $2.9 million (12.3% of revenues) in the third quarter 2017.
Net income on a GAAP basis in the quarter totaled $5.1 million, or $0.14 per diluted share, compared to net income from continuing operations of $2.8 million, or $0.08 per diluted share, in the third quarter 2017. Net income on a non-GAAP basis in the quarter totaled $5.7 million, or $0.16 per diluted share, compared to non-GAAP net income from continuing operations of $2.9 million, or $0.08 per diluted share, in the third quarter 2017.
Cash and cash equivalents, as of September 30, 2018, were $48.3 million compared to $41.2 million as of June 30, 2018. During the quarter the Company generated a positive operating cash flow of $7.1 million.
Conference Call
Camtek will host a conference call today, October 31, 2018, at 9:30 am ET.
Rafi Amit, CEO, Moshe Eisenberg, CFO and Ramy Langer, COO 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: 1-888-668-9141 at 9:30 am Eastern Time
Israel: 03-918-0609 at 3:30 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.com beginning 24 hours after the call.
A summary presentation of the quarterly results will also be available on Camtek's website.
About Camtek Ltd.
Camtek is a leading manufacturer of metrology and inspection equipment and a provider of software solutions serving the Advanced Packaging, Memory, CMOS Image Sensors, MEMS, RF and other segments in the mid end of the semiconductor industry.
Camtek provides dedicated solutions and crucial yield-enhancement data, enabling manufacturers to improve yield and drive down their production costs.
With eight offices around the world, Camtek has best-in-class sales and customer support organization, providing tailor-made solutions in line with customers' requirements.
This press release is available at http://www.camtek.com
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, price reductions as well as due to risks identified in the documents filed by the Company with the SEC.
This press release provides financial measures that exclude: (i) settlement expenses; (ii) changes in valuation allowance on deferred tax assets; (iii) share based compensation expenses, (iv) discontinued operations, and (v) write off costs with regard to the FIT activities, 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. A reconciliation between the GAAP and non-GAAP results appears in the tables at the end of this press release.
Consolidated Balance Sheets
(In thousands)
September 30, December 31,
2018 2017
U.S. Dollars (In
thousands)
Assets
---
Current assets
Cash and cash
equivalents 48,328 43,744
Trade accounts
receivable, net 30,746 23,153
Inventories 25,789 21,336
Other current assets 3,536 3,215
Total current assets 108,399 91,448
Fixed assets, net 15,798 15,503
Long-term inventory 1,799 1,383
Deferred tax asset 2,890 4,067
Other assets, net 153 153
Intangible assets, net 508 482
5,350 6,085
Total assets 129,547 113,036
Liabilities and
shareholders' equity
---
Current liabilities
Trade accounts payable 13,746 10,502
Other current
liabilities 20,127 17,395
Total current
liabilities 33,873 27,897
Long term liabilities
Liability for employee
severance benefits 873 838
873 838
Total liabilities 34,746 28,735
Shareholders' equity
38,526,231 issued
shares at September
30, 2018 and
37,924,507 at
December 31, 2017;
Additional paid-in
capital 81,040 78,437
Retained earnings 15,508 7,613
96,699 86,199
Treasury stock, at
cost (2,092,376 as of
September 30, 2018
and December 31,
2017)
(1,898) (1,898)
Total shareholders'
equity 94,801 84,301
Total liabilities and
shareholders' equity 129,547 113,036
Consolidated Statements of Operations
(in thousands, except share data)
Nine Months ended Three months
ended Year ended
September 30, September 30, December
31,
2018 2017 2018 2017 2017
U.S. dollars U.S. dollars U.S.
dollars
Revenues 90,000 67,641 32,264 23,813 93,485
Cost of revenues 45,921 34,447 16,081 12,063 47,966
Gross profit 44,079 33,194 16,183 11,750 45,519
Research and development
costs 10,456 10,067 3,501 3,215 13,534
Selling, general and
administrative expenses 19,792 16,847 7,128 5,688 22,022
Patent litigation expense 13,000 13,000
Total operating expenses 30,248 39,914 10,629 8,903 48,556
Operating income (loss) 13,831 (6,720) 5,554 2,847 (3,037)
Financial income
(expenses), net 491 (199) 55 10 (150)
Income (loss) from
continuing operations
before income taxes 14,322 (6,919) 5,609 2,857 (3,187)
Income tax benefit
(expense) (1,364) 5,281 (516) (83) 4,875
Income (loss) from
continuing operations 12,958 (1,638) 5,093 2,774 1,688
Discontinued operation
Income from discontinued
operation
Income before tax benefit
(expense) 18,302 13,963 18,302
Income tax benefit
(expense) (5,563) (5,058) (6,028)
Income from discontinued
operation 12,739 8,905 12,274
Net income 12,958 11,101 5,093 11,679 13,962
Net income (loss) per
ordinary share:
Basic earnings (loss)
from continuing
operation 0.36 (0.05) 0.14 0.08 0.05
Basic earnings from
discontinued operation 0.36 0.25 0.35
Diluted earnings (loss)
from continuing
operation 0.35 (0.05) 0.14 0.08 0.05
Diluted earnings from
discontinued
operation 0.35 0.24 0.34
Weighted average number
of
ordinary shares
outstanding:
Basic 36,105 35,374 36,300 35,404 35,441
Diluted 36,657 35,972 36,941 36,361 35,964
Camtek Ltd.
Reconciliation of GAAP To Non-GAAP results
(In thousands, except share data)
Nine Months ended Three Months ended Year ended
September 30, September 30, December 31,
2018 2017 2018 2017 2017
U.S. dollars U.S. dollars U.S. dollars
Reported net income (loss)
attributable to Camtek
Ltd. on GAAP basis 12,958 11,101 5,093 11,679 13,962
Effect of FIT
reorganization (1) 506
Share-based compensation 1,028 276 634 92 426
Settlement expense, net of
tax (2) 12,025 12,025
Realization of deferred
tax assets (3) (4,495) (4,495)
Attributable to
discontinued operations (12,739) (8,905) (12,274)
Non-GAAP net income 14,492 6,168 5,727 2,866 9,644
Non -GAAP diluted net
income per share 0.40 0.17 0.16
Gross margin on GAAP basis
from continuing
operations
49.0% 49.1% 50.2% 49.3% 48.7%
Reported gross profit on
GAAP basis 44,079 33,194 16,183 11,750 45,519
Effect of FIT
reorganization (1) 205
Share-based compensation 105 28 62 9 44
Non- GAAP gross margin 44,389 33,222 16,245 11,759 45,563
Non-GAAP gross profit 49.3% 49.1% 50.4% 49.4% 48.7%
Effect of FIT
reorganization (1) 506
Share-based compensation 1,028 276 634 92 426
Settlement expense (2) 13,000 13,000
Non-GAAP operating income 15,365 6,556 6,188 2,939 10,389
(1) At the end of the first quarter of 2018, the Company ceased its efforts to utilize the remaining inventory and equipment related to FIT development and recorded a one-time write-off in the amount of $0.5 million, consisting of: (1) inventory write-offs of $0.2 million, recorded under the cost of revenue line item; and (2) fixed asset write-offs of $0.3 million recorded under operating expenses.
(2) During the three and the nine months ended September 30, 2017, and the year ended December 31, 2017, the Company recorded a provision of $13 million ($12 million net of tax) in conjunction settlement with Rudolph Technologies Inc.
(3) During the three and the nine months ended September 30, 2017, and the year ended December 31. 2017, the Company recorded net income of $4.5 million as a result of a decrease in the valuation allowance on deferred tax assets following the evaluation of the realizability of the assets based on projected future earnings.
CAMTEK LTD. INTERNATIONAL INVESTOR RELATIONS
Moshe Eisenberg, CFO GK Investor Relations
Tel: +972-4-604 8308 Ehud Helft / Gavriel Frohwein
Mobile: +972-54-900-7100 Tel: (US) +1-646-688-3559
moshee@camtek.com camtek@gkir.com
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SOURCE Camtek Ltd.
