Camtek Announces Record Results for the Third Quarter of 2018

10 December 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.

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

 

Cision View original content:http://www.prnewswire.com/news-releases/camtek-announces-record-results-for-the-third-quarter-of-2018-300741175.html

SOURCE Camtek Ltd.