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Camtek Announces Third Quarter 2014 Results

$22.4 million revenue; $1.1 million operating income on a non-GAAP basis; Gryphon demonstration center launched in Southern California

MIGDAL HAEMEK, Israel, Oct. 29, 2014 — (PRNewswire) —  Camtek Ltd. (NASDAQ and TASE: CAMT), today announced its financial results for the quarter ended September 30, 2014.

Highlights of the Third Quarter of 2014

Rafi Amit, Camtek's Chairman and CEO, commented, "Strategically the third quarter was very important for us and sets the stage for 2015. We opened a demonstration center for the Gryphon, our 3D Functional InkJet Technology system for PCB solder mask applications, at which potential customers can see the system in action. This will support our efforts to capitalize on the industry interest we are seeing in this product. We remain on track and expect initial commercial Gryphon installations to begin in the fourth quarter, with revenues expected in 2015.

"Additionally, our semiconductor systems achieved qualification at leading semiconductor manufacturers, some of which we had not significantly penetrated in the past. These are large vendors that are getting ready to ramp up with their new manufacturing facilities and their capabilities. As the demand for their products picks up we expect to see the potential for getting multiple orders and selling significant quantities of tools."

Concluded Mr. Amit, "For the fourth quarter, we expect revenues of around $20.5-$22.5 million. Looking further out to 2015, we believe the tailwinds are in place for solid year-over-year growth in both revenue and profit."

Third Quarter 2014 Financial Results

Revenues for the third quarter of 2014 were $22.4 million. This is a 3% improvement compared to revenues of $21.7 million in the third quarter of 2013.

Gross profit on a GAAP basis in the quarter totaled $10.0 million (44.4% of revenues), a 3% improvement compared to $9.7 million (44.6% of revenues) in the third quarter of 2013.

Gross profit on a non-GAAP basis in the quarter was $10.0 million (44.5% of revenues), a 2% improvement compared to $9.8 million (45.0% of revenues) in the third quarter of 2013.

Operating income on a GAAP basis in the quarter was $1.0 million (4.6% of revenues), compared with an operating income of $0.6 million (2.8% of revenues) in the third quarter of 2013.

Operating income on a non-GAAP basis in the quarter was $1.1 million (5.1% of revenues) compared with non-GAAP operating income of $0.8 million (3.8% of revenues) in the third quarter of 2013.

Net income on a GAAP basis in the quarter totaled $0.6 million (2.8% of revenues) or $0.02 per share, compared to a net loss of $0.1 million or ($0.00) per share in the third quarter of 2013.

Net income on a non-GAAP basis in the quarter was $0.9 million (4.2% of revenues) or $0.03 per share, compared to non-GAAP net income of $0.5 million (2.5% of revenues) or $0.02 per share in the third quarter of 2013.

Cash, cash equivalents and short-term deposits as of September 30, 2014 were $24.2 million compared to $20.0 million as of June 30, 2014. The company generated $4.3 million in cash flow for operating activities during the third quarter of 2014.

Conference Call

Camtek will host a conference call today, October 29, 2014, at 10:00 am ET.

Rafi Amit, Chairman and CEO, and Moshe Eisenberg, 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:                          1 888 281 1167          at 10:00 am Eastern Time
Israel:                      03 918 0644              at 4:00 pm Israel Time
International:          +972 3 918 0644

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 and technologically advanced solutions dedicated to enhancing production processes, increasing products yield and reliability, enabling and supporting customer's latest technologies in the Semiconductors, Printed Circuit Boards (PCB) and IC Substrates industries.

Camtek addresses the specific needs of these interconnected industries with dedicated solutions based on a wide and advanced platform of technologies including intelligent imaging, image processing and functional 3D inkjet printing.

This press release is available at 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 such as: (i) revaluation of liabilities and other expenses with respect to the acquisitions of Sela and Printar; and (ii) share based compensation expenses, 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,


2014

2013


U.S. Dollars (In thousands)

Assets






Current assets



Cash and cash equivalents

14,418

16,495

Short-term deposits

9,800

6,000

Trade accounts receivable, net

25,415

27,048

Inventories

21,637

17,911

Due from affiliated companies

-

233

Other current assets

2,889

1,913

Deferred tax asset

638

938




Total current assets

74,797

70,538







Fixed assets, net

13,318

14,481




Long term inventory

2,131

2,225

Long-term deposit

729

729

Deferred tax asset

975

975

Other assets, net

339

339

Intangible assets, net

1,020

1,008

Goodwill

1,555

1,555





6,749

6,831




Total assets

94,864

91,850




Liabilities and shareholders' equity






Current liabilities



Trade accounts payable

7,470

7,753

Due to affiliated companies

118

-

Other current liabilities

16,355

15,585




Total current liabilities

23,943

23,338




Long term liabilities



Liability for employee severance benefits

913

858

Other long term liabilities

4,418

5,758


5,331

6,616




Total liabilities

29,274

29,954










Shareholders' equity



Ordinary shares NIS 0.01 par value, authorized 100,000,000 shares,



32,574,626 issued as of September 30, 2014 and 32,497,902 issued as of December 31, 2013, outstanding 30,482,250



as of September 30, 2014 and 30,405,526 as of December 31, 2013

134

134

Additional paid-in capital

63,391

62,966

Retained earnings

3,963

694


67,488

63,794

Treasury stock, at cost (2,092,376  as of September 30, 2014 and December 31, 2013)

(1,898)

(1,898)




Total shareholders' equity

65,590

61,896




Total liabilities and shareholders' equity

94,864

91,850

 

 

Consolidated Statements of Operations

(in thousands, except share data)





Nine Months ended

Three Months ended

Year ended


September 30,

September 30,

December 31,


2014

2013

2014

2013

2013


U.S. dollars

U.S. dollars

U.S. dollars







Revenues

67,713

62,072

22,443

21,733

85,405

Cost of revenues

36,146

34,363

12,474

12,046

51,003







Gross profit

31,567

27,709

9,969

9,687

34,402













Research and development costs

10,705

10,715

3,741

3,507

14,370

Selling, general and administrative expenses

16,086

15,554

5,186

5,580

22,362

Reorganization and impairment

-

-

-

-

(3,466)


26,791

26,269

8,927

9,087

33,266







Operating income

4,776

1,440

1,042

600

1,136







Financial expenses (income), net

(861)

(1,681)

(167)

(603)

1,738







Income (loss) before income






taxes

3,915

(241)

875

(3)

(602)







Income tax

(646)

(412)

(257)

(119)

609







Net income (loss)

3,269

(653)

618

(122)

7







Net income (loss) per ordinary share:












Basic

0.11

(0.02)

0.02

0.00

0.00







Diluted

0.11

(0.02)

0.02

0.00

0.00







Weighted average number of






ordinary shares outstanding:












Basic

30,457

29,993

30,476

30,046

30,040







Diluted

30,542

29,993

30,556

30,046

30,044

 

 





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,


2014

2013

2014

2013

2013


U.S. dollars

U.S. dollars

U.S. dollars





Reported net income (loss) attributable to Camtek Ltd. on GAAP basis

3,269

(653)

618

(122)

7

Acquisition of Sela and Printar related expenses (1)

 

639

 

1,517

 

227

 

523

 

(1,949)

Inventory and fixed asset write- downs (2)

-

-

-

-

4,433

Share-based compensation

233

429

102

144

377

Realization of deferred tax assets (3)

-

-

-

-

(1,287)

Employee related charges

-

-

-

-

490

Non-GAAP net income

4,141

1,293

947

545

2,071







Non –GAAP net income  per share , basic and diluted

0.14

0.04

0.03

0.02

0.07

Gross margin on GAAP basis

46.6%

44.6%

44.4%

44.6%

40.3%

Reported gross profit on GAAP basis

31,567

27,709

9,969

9,687

34,402

Acquisition of Sela and Printar related expenses ( 1)

-

 

225

-

 

75

 

225

Inventory write-downs  (2)

-

-

-

-

3,915

Share-based compensation

33

50

9

22

55

Employee related charges (4)

-

-

-

-

25

Non- GAAP gross margin

46.7%

45.1%

44.5%

45.0%

45.2%

Non-GAAP gross profit

31,600

27,984

9,978

9,784

38,622







Reported operating income (loss) attributable to Camtek Ltd. on GAAP basis

4,776

1,440

1,042

600

1,136

Acquisition of Sela and Printar related expenses (1)

-

225

-

75

(3,241)

Inventory and fixed asset write- downs (2)

-

-

-

-

4,433

Share-based compensation

200

429

93

144

377

Employee related charges

-

-

-

-

490

Non-GAAP operating income

4,976

2,094

1,135

819

3,195

 

(1)

During the three and nine months ended September 30, 2014 and 2013 and the twelve months ended December 31, 2013, the Company recorded acquisition expenses (income) of $0.2 million, $0.6 million, $0.5 million, $1.5 million and $(1.9) million, respectively, consisting of: (1) Revaluation adjustments of $0.2 million, $0.6 million, $0.4 million, $1.3 million and $(2.2) million, respectively, of contingent consideration and certain future liabilities recorded at fair value. These amounts are recorded under the finance expenses line item and (2) $0, $0, $0.07 million, $0.23 million and $0.2 million, respectively, with respect to amortization of intangible assets acquired recorded under the cost of revenues line item.



(2)

During the three months and nine months ended September 30, 2014 and 2013, and the twelve months ended December 31, 2013, the Company recorded inventory and fixed asset write downs in the amount of $0 million, $0 million, $0 million, $0 million, and $4.4 million, respectively.



(3)

During the three and nine months ended September 30, 2014 and 2013 and the twelve months ended December 31, 2013, the Company recorded net income of $0, $0, $0, $0 and $1.3 million, respectively, 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.



(4)

During the three and nine months ended September 30, 2014 and 2013 and the twelve months ended December 31, 2013, the Company recorded net employee related expenses of $0, $0, $0, $0  and $0.5 million, respectively, as a result of internal reorganization.

CAMTEK LTD.

Moshe Eisenberg, CFO

Tel: +972 4 604 8308

Mobile: +972 54 900 7100

moshee@camtek.co.il

INTERNATIONAL INVESTOR RELATIONS

GK Investor Relations

Ehud Helft / Gavriel Frohwein
Tel: (US) 1 646 688 3559

camtek@gkir.com

SOURCE Camtek Ltd.

Contact:
Camtek Ltd.
Web: http://www.camtek.co.il