Camtek Announces Record Results for the Second Quarter of 2018
Record revenue of $30.5 million, 34% increase YoY; Expects continued strong growth in the second half of 2018
MIGDAL HAEMEK, Israel, July 31, 2018 /PRNewswire/ -- Camtek Ltd. (NASDAQ: CAMT); (TASE: CAMT), today announced its financial results for the quarter ended June 30, 2018.
Highlights of the Second Quarter 2018
- Revenues were a record at $30.5 million, up 34% year-over-year and ahead of the upper end of the previously-issued guidance range;
- Revenues for the first half of 2018 are up over 30% from 2017;
- GAAP operating income was $4.7 million and non-GAAP operating income was $5.0 million, representing a margins of 15.5% and 16.3%, respectively; and
- GAAP net income was $4.3 million and non-GAAP net income was $4.6 million; representing margins of 14.2% and 15.0%, respectively.
Forward Looking Guidance
Third quarter 2018 revenues are expected to grow to $31-32 million, representing a year-over-year increase of approximately 30% for the third quarter and for the first nine months of 2018.
Management Comment
Rafi Amit Camtek's CEO commented, "2018 continues to be a very strong year with revenue growth of approximately 30% and corresponding improvement in profitability. Our strong results are due to our focus on the fastest growing segments of the semiconductors market, particularly advanced packaging. Furthermore, we are successfully leveraging our strong market position in metrology to grow and capture market share in 2D inspection applications as well. Our backlog at record levels and our improved visibility into the end of the year, give us confidence that we will continue revenue growth and associated improvement in margins and profit in the fourth quarter of 2018."
The financial results and the comparison to 2017 in this press release include only those of the continuing operations.
Second Quarter 2018 Financial Results
Revenues for the second quarter of 2018 were $30.5 million. This compares to second quarter 2017 revenues of $22.7 million, a growth of 34%.
Gross profit on a GAAP basis in the quarter totaled $14.9 million (48.9% of revenues), compared to a gross profit of $11.2 million (49.2% of revenues) in the second quarter 2017.
Gross profit on a non-GAAP basis in the quarter totaled $14.9 million (49.0% of revenues), compared to $11.2 million (49.2% of revenues) in the second quarter 2017.
Operating profit on a GAAP basis in the quarter totaled $4.7 million (15.5% of revenues), compared to an operating loss of $11.0 million in the second quarter 2017. The 2017 operating loss was due to a $13 million settlement payment for IP litigation.
Operating profit on a non-GAAP basis in the quarter totaled $5.0 million (16.3% of revenues), compared to $2.1 million (9.2% of revenues) in the second quarter 2017.
Net income on a GAAP basis in the quarter totaled $4.3 million, or $0.12 per diluted share, compared to net loss from continuing operations of $5.7 million, or ($0.16) per diluted share, in the second quarter 2017.
Net income on a non-GAAP basis in the quarter totaled $4.6 million, or $0.13 per diluted share, compared to non-GAAP net income from continuing operations of $2.0 million, or $0.06 per diluted share, in the second quarter 2017.
Cash and cash equivalents, as of June 30, 2018, were $41.2 million compared to $47.2 million as of March 31, 2018. During the quarter the Company paid a $5.1 million dividend. In addition, the Company reported a negative operating cash flow of $1.0 million during the second quarter to support the working capital requirements.
Conference Call
Camtek will host a conference call today, July 31, 2018, at 10:00 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 10:00 am Eastern Time |
Israel: | 03-918-0609 | at 5:00 pm Israel Time |
International: | +972-3-918-0609 | at 5:00 pm Israel Time |
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.
Consolidated Balance Sheets | |||
(In thousands) | |||
June 30, | December 31, | ||
2018 | 2017 | ||
U.S. Dollars (In thousands) | |||
Assets | |||
Current assets | |||
Cash and cash equivalents | 41,204 | 43,744 | |
Trade accounts receivable, net | 32,278 | 23,153 | |
Inventories | 23,693 | 21,336 | |
Other current assets | 2,769 | 3,215 | |
Total current assets | 99,944 | 91,448 | |
Fixed assets, net | 15,731 | 15,503 | |
Long-term inventory | 1,466 | 1,383 | |
Deferred tax asset | 3,308 | 4,067 | |
Other assets, net | 153 | 153 | |
Intangible assets, net | 480 | 482 | |
5,407 | 6,085 | ||
Total assets | 121,082 | 113,036 | |
Liabilities and shareholders' equity | |||
Current liabilities | |||
Trade accounts payable | 15,174 | 10,502 | |
Other current liabilities | 16,552 | 17,395 | |
Total current liabilities | 31,726 | 27,897 | |
Long term liabilities | |||
Liability for employee severance benefits | 870 | 838 | |
870 | 838 | ||
Total liabilities | 32,596 | 28,735 | |
Shareholders' equity | |||
Ordinary shares NIS 0.01 par value, 100,000,000 shares authorized at June 30, 2018 and at December 31, 2017; | |||
38,277,165 issued shares at June 30, 2018 and 37,924,507 at December 31, 2017; | |||
36,184,789 shares outstanding at June 30, 2018 and 35,832,131 at December 31, 2017 | 149 | 149 | |
Additional paid-in capital | 79,820 | 78,437 | |
Retained earnings (losses) | 10,415 | 7,613 | |
90,384 | 86,199 | ||
Treasury stock, at cost (2,092,376 as of June 30, 2018 and December 31, 2017) | (1,898) | (1,898) | |
Total shareholders' equity | 88,486 | 84,301 | |
Total liabilities and shareholders' equity | 121,082 | 113,036 | |
Consolidated Statements of Operations | ||||||||||
(in thousands, except share data) | ||||||||||
Six Months ended June 30, | Three Months ended June 30, | Year ended December 31, | ||||||||
2018 | 2017 | 2018 | 2017 | 2017 | ||||||
U.S. dollars | U.S. dollars | U.S. dollars | ||||||||
Revenues | 57,736 | 43,828 | 30,462 | 22,682 | 93,485 | |||||
Cost of revenues | 29,840 | 22,384 | 15,563 | 11,527 | 47,966 | |||||
Gross profit | 27,896 | 21,444 | 14,899 | 11,155 | 45,519 | |||||
Research and development costs | 6,955 | 6,852 | 3,406 | 3,413 | 13,534 | |||||
Selling, general and administrative expenses | 12,664 | 11,159 | 6,775 | 5,754 | 22,022 | |||||
Patent litigation expense | - | 13,000 | - | 13,000 | 13,000 | |||||
Total operating expenses | 19,619 | 31,011 | 10,181 | 22,167 | 48,556 | |||||
Operating income (loss) | 8,277 | (9,567) | 4,718 | (11,012) | (3,037) | |||||
Financial income (expenses), net | 436 | (209) | 146 | (56) | (150) | |||||
Income (loss) from continuing operations | ||||||||||
before income taxes | 8,713 | (9,776) | 4,864 | (11,068) | (3,187) | |||||
Income tax benefit (expense) | (848) | 5,364 | (533) | 5,404 | 4,875 | |||||
Income (loss) from continuing operations | 7,865 | (4,412) | 4,331 | (5,664) | 1,688 | |||||
Discontinued operation | ||||||||||
Income from discontinued operation | ||||||||||
Income before tax benefit (expense) | - | 4,339 | - | 1,981 | 18,302 | |||||
Income tax benefit (expense) | - | (505) | - | (194) | (6,028) | |||||
Income from discontinued operation | - | 3,834 | - | 1,787 | 12,274 | |||||
Net income (loss) | 7,865 | (578) | 4,331 | (3,877) | 13,962 | |||||
Net income (loss) per ordinary share: | ||||||||||
Basic earnings (loss) from continuing
operation | 0.22 | (0.12) | 0.12 | (0.16) | 0.05 | |||||
Basic earnings from discontinued operation | - | 0.11 | - | 0.05 | 0.35 | |||||
Diluted earnings (loss) from continuing
operation | 0.22 | (0.12) | 0.12 | (0.16) | 0.05 | |||||
Diluted earnings from discontinued
operation | - | 0.11 | - | 0.05 | 0.34 | |||||
Weighted average number of | ||||||||||
ordinary shares outstanding: | ||||||||||
Basic | 36,050 | 35,359 | 36,090 | 35,369 | 35,441 | |||||
Diluted | 36,512 | 35,359 | 36,632 | 35,369 | 35,964 | |||||
Camtek Ltd. | |||||||||
Reconciliation of GAAP To Non-GAAP results | |||||||||
(In thousands, except share data) | |||||||||
Six Months ended
June 30, | Three Months ended
June 30, | Year ended
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 | 7,865 | (578) | 4,331 | (3,877) | 13,962 | ||||
Effect of FIT reorganization (1) | 506 | - | - | - | - | ||||
Share-based compensation | 395 | 184 | 249 | 92 | 426 | ||||
Settlement expense, net of tax (2) | - | 12,025 | - | 12,025 | 12,025 | ||||
Realization of deferred tax assets (3) | - | (4,495) | - | (4,495) | (4,495) | ||||
Attributable to discontinued operations | - | (3,832) | - | (1,787) | (12,274) | ||||
Non-GAAP net income | 8,766 | 3,304 | 4,580 | 1,958 | 9,644 | ||||
Non –GAAP net income per share , basic and diluted | 0.24 | 0.09 | 0.13 | 0.06 | 0.27 | ||||
Gross margin on GAAP basis from continuing operations | 48.4% | 48.9% | 48.9% | 49.2% | 48.7% | ||||
Reported gross profit on GAAP basis | 27,896 | 21,444 | 14,899 | 11,155 | 45,519 | ||||
Effect of FIT reorganization (1) | 205 | - | - | - | - | ||||
Share-based compensation | 44 | 19 | 28 | 9 | 44 | ||||
Non- GAAP gross margin | 28,145 | 21,463 | 14,927 | 11,164 | 45,563 | ||||
Non-GAAP gross profit | 48.8% | 48.9% | 49.0% | 49.2% | 48.7% | ||||
Reported operating income (loss) attributable to Camtek Ltd. on GAAP basis from continuing operations | 8,277 | (9,567) | 4,718 | (11,012) | (3,037) | ||||
Effect of FIT reorganization (1) | 506 | - | - | - | - | ||||
Share-based compensation | 395 | 184 | 249 | 92 | 426 | ||||
Settlement expense (2) | - | 13,000 | - | 13,000 | 13,000 | ||||
Non-GAAP operating income | 9,178 | 3,617 | 4,967 | 2,080 | 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 six months ended June 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 six months ended June 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.
P.O. Box 544, Ramat Gabriel Industrial Park
Migdal Ha'Emek 23150, ISRAEL
Tel: +972-(4)-604-8100
Fax: +972-(4)-644-0523
E-mail: info@camtek.com
Web site: http://www.camtek.com
Contacts:
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
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SOURCE Camtek Ltd.
