Camtek Announces Record Results for the Fourth Quarter and Full Year 2018
MIGDAL HAEMEK, Israel, Feb. 13, 2019 /PRNewswire/ -- Camtek Ltd. (NASDAQ: CAMT) (TASE: CAMT), today announced its financial results for the quarter and year ended December 31, 2018.
Highlights of the Fourth Quarter of 2018
-- Revenues of $33.2 million, up 28% year-over-year and ahead of the
upper-end of the guidance range of $32-33 million;
-- GAAP operating income of $6.2 million; non-GAAP operating income of $6.9
million, representing an operating margin of 18.7% and 20.7%
respectively;
-- GAAP net income of $5.8 million and non-GAAP net income of $6.4 million,
representing year-over-year growth of 101% and 85%, respectively; and
-- Strong operating cash flow of $7.2 million;
Highlights of the Full Year 2018
-- Revenues of $123.2 million; a 32% year over year increase;
-- GAAP operating income of $20.0 million;
-- Non-GAAP operating income of $22.2 million, more than double that of
2017;
-- GAAP net income of $18.7 million;
-- Non-GAAP net income of $20.9 million; $0.57 per diluted share vs. $0.27
in 2017;
-- Strong operating cash flow of $16.8 million in 2018 leading to year-end
net cash balance of $54.9 million;
Forward Looking Guidance
First quarter 2019 revenues are expected to increase to $33.5-34.5 million, implying continued sequential growth and year-over-year growth of 25% at the mid-point.
Management Comment
Rafi Amit Camtek's CEO commented, "We are very pleased with our performance in 2018. We set ambitious targets in terms of revenue growth and improved profitability and we have exceeded them all. We ended 2018 with over 30% growth in revenue and close to 20% operating margin. We are aware of the uncertainty in the semiconductor market, however we don't see any significant change in the segments in which we operate."
Continued Mr. Amit, "Earlier this week, we announced an investment and important alliance with Chroma, a leading Taiwanese high precision test and measurement equipment corporation. Chroma will enable us to bolster our presence in Asia and especially Taiwan, and will also allow us to expand our addressable markets by leveraging our technological capabilities into new segments."
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.
Fourth Quarter 2018 Financial Results
Revenues for the fourth quarter of 2018 were $33.2 million. This compares to fourth quarter 2017 revenues of $25.8 million, a growth of 28%.
Gross profit on a GAAP basis in the quarter totaled $16.7 million (50.4% of revenues), compared to a gross profit of $12.3 million (47.7% of revenues) in the fourth quarter 2017. Gross profit on a non-GAAP basis in the quarter totaled $16.8 million (50.6% of revenues), compared to $12.3 million (47.8% of revenues) in the fourth quarter 2017. The variance in the gross margin between quarters is a function of the product and sales mix delivered in the quarter.
Operating profit on a GAAP basis in the quarter totaled $6.2 million (18.7% of revenues), compared to an operating income of $3.7 million (14.3% of revenues) in the fourth quarter 2017. Operating profit on a non-GAAP basis in the quarter totaled $6.9 million (20.7% of revenues), compared to $3.8 million (14.8% of revenues) in the fourth quarter 2017.
Net income on a GAAP basis in the quarter totaled $5.8 million, or $0.16 per diluted share, compared to net income from continuing operations of $3.3 million, or $0.09 per diluted share, in the fourth quarter 2017. Net income on a non-GAAP basis in the quarter totaled $6.4 million, or $0.17 per diluted share, compared to non-GAAP net income from continuing operations of $3.5 million, or $0.10 per diluted share, in the fourth quarter 2017.
Cash and cash equivalents, as of December 31, 2018 were $54.9 million compared to $48.3 million as of September 30, 2018. During the fourth quarter, Camtek generated $7.2 million in operating cash flow.
Full Year 2018 Results Summary
Revenues for 2018 were $123.2 million, an increase of 32% over the $93.4 million reported in 2017.
Gross profit on a GAAP basis totaled $60.8 million (49.4% of revenues), compared to $45.5 million (48.7% of revenues) in 2017. Gross profit on a non-GAAP totaled $61.2 million (49.7% of revenues), compared to $45.6 million (48.7% of revenues) in 2017.
Operating income on a GAAP basis totaled $20.0 million (16.3% of revenues), compared to an operating loss of $3.0 million in 2017. The GAAP operating loss in 2017 included a one-time expense of $13 million due to a settlement payment. Operating income on a non-GAAP basis totaled $22.2 million (18.0% of revenues), compared to $10.4 million (11.1% of revenues) in 2017.
Net income on a GAAP basis totaled $18.7 million, or $0.52 per diluted share. This compares to net income of $1.7 million, or $0.05 per diluted share, in 2017. Net income on a non-GAAP basis totaled $20.9 million, or $0.57 per diluted share. This compares to net income of $9.6 million, or $0.27 per diluted share, in 2017.
Conference Call
Camtek will host a conference call today, February 13, 2019, at 10 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 10 am Eastern Time
Israel: 03-918-0609 at 5 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.
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.
CAMTEK LTD.
Moshe Eisenberg, CFO
Tel: +972-4-604-8308
Mobile: +972-54-900-7100
moshee@camtek.com
INTERNATIONAL INVESTOR RELATIONS
GK Investor Relations
Ehud Helft / Gavriel Frohwein
Tel: (US) +1-646-688-3559
camtek@gkir.com
Camtek Ltd.
Consolidated Balance Sheets
December 31
,
2018 2017
U.S. Dollars (In
thousands)
Assets
Current assets
Cash and cash equivalents 54,935 43,744
Accounts receivable, net 31,644 23,153
Inventories 30,109 21,336
Other current assets 2,613 3,215
Total current assets 119,301 91,448
Fixed assets, net 17,117 15,503
Long term inventory 2,056 1,383
Deferred tax asset 2,366 4,067
Other assets, net 231 153
Intangible assets, net 476 482
Total long-term assets 5,129 6,085
Total assets 141,547 113,036
Liabilities and shareholders'
equity
Current liabilities
Accounts payable - trade 15,541 10,502
Other current liabilities 23,701 17,395
Total current liabilities 39,242 27,897
Long term liabilities
Liability for employee severance
benefits 898 838
Total long-term liabilities 898 838
Total liabilities 40,140 28,735
Commitments and contingencies
Shareholders' equity
Ordinary shares NIS 0.01 par
value, authorized 100,000,000
shares,
38,535,445 issued as of December
31, 2018, and 37,924,507 as of
December 31, 2017, outstanding
36,443,069 as of December 31,
2018,
and 35,832,131 as of December 31,
2017 151 149
Additional paid-in capital 81,873 78,437
Retained earnings 21,281 7,613
103,305 86,199
Treasury stock, at cost
(2,092,376 as of December 31,
2018 and December 31, 2017) (1,898) (1,898)
Total shareholders' equity 101,407 84,301
Total liabilities and
shareholders' equity 141,547 113,036
Camtek Ltd.
Consolidated Statements of Operations
(In thousands, except share data)
Year ended Three Months
December 31, ended December
31,
2018 2017 2018 2017
U.S. dollars U.S. dollars
Revenues 123,174 93,485 33,174 25,844
Cost of
revenues 62,378 47,966 16,457 13,519
Gross
profit 60,796 45,519 16,717 12,325
Research
and
development
costs 14,581 13,534 4,125 3,467
Selling,
general
and
administrative
expenses 26,182 22,022 6,390 5,175
Litigation
settlement
expenses 13,000
40,763 48,556 10,515 8,642
Operating
income
(loss) 20,033 (3,037) 6,202 3,683
Financial
income
(expenses),
net 728 (150) 237 49
Income
(loss)
before
income
taxes 20,761 (3,187) 6,439 3,732
Income
taxes
(expense) (2,030) 4,875 (666) (406)
Net
income
from
continuing
operations 18,731 1,688 5,773 3,326
Discontinued
operations
*
Income
from
discontinued
operations
Income
before
tax
expense 18,302
Income
taxes
(expense) (6,028) (465)
Income
(loss)
from
discontinued
operations 12,274 (465)
Net
income 18,731 13,962 5,773 2,861
(*) The financial results of the PCB business are presented as discontinued operations.
Net income (loss) per ordinary share:
Year ended Three Months
December 31, ended December
31,
2018 2017 2018 2017
U.S. dollars U.S. dollars
Basic earnings from
continuing operation 0.52 0.05 0.16 0.09
Basic earnings (losses)
from discontinued
operation *
0.35 (0.01)
Basic net earnings 0.52 0.4 0.16 0.08
Diluted earnings from
continuing operation
0.51 0.05 0.16 0.09
Diluted earnings (losses)
from discontinued
operation *
0.34 (0.01)
Diluted net earnings 0.51 0.39 0.16 0.08
Weighted average number of
ordinary shares
outstanding:
Basic 36,190 35,441 36,440 35,644
Diluted 36,747 35,964 37,020 36,094
(*) The financial results of the PCB business are presented as discontinued operations.
Reconciliation of GAAP To Non-GAAP results
(In thousands, except share data)
Year ended December Three Months ended
31
, December 31,
2018 2017 2018 2017
U.S. dollars U.S. dollars
Reported net
income
attributable to
Camtek Ltd. on
GAAP basis
18,731 13,962 5,773 2,861
Effect of FIT
reorganization
(1) 506
Share-based
compensation 1,682 426 654 150
Settlement
expense, net of
tax (2) 12,025
Realization of
deferred tax
assets (3) (4,495)
Attributable to
discontinued
operations (12,274) 465
Non-GAAP net
income 20,919 9,644 6,427 3,476
Non-GAAP net
income per
diluted share 0.57 0.27 0.17 0.10
Gross margin on
GAAP basis 49.4% 48.7% 50.4% 47.7%
Reported gross
profit on GAAP
basis 60,796 45,519 16,717 12,325
Effect of FIT
reorganization
(1) 205
Share-based
compensation 167 44 62 16
Non-GAAP gross
margin 49.7% 48.7% 50.6% 47.8%
Non-GAAP gross
profit 61,168 45,563 16,779 12,341
Reported
operating
income (loss)
attributable to
Camtek Ltd. on
GAAP basis
20,033 (3,037) 6,202 3,683
Effect of FIT
reorganization
(1) 506
Share-based
compensation 1,682 426 654 150
Settlement
expense (2) 13,000
Non-GAAP
operating
income 22,221 10,389 6,854 3,833
(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) In the third quarter of 2017, the Company recorded a provision of $13 million ($12 million net of tax) in conjunction settlement with Rudolph Technologies Inc.
(3) In the third quarter of 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.
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SOURCE Camtek Ltd.
