×

Camtek Announces Third Quarter 2017 Results

MIGDAL HAEMEK, Israel, Nov. 7, 2017 /PRNewswire/ -- Camtek Ltd. (NASDAQ: CAMT) (TASE: CAMT), today announced its financial results for the quarter ended September 30, 2017.

Financial highlights of the third quarter 2017

  • Semiconductor revenues were $23.8 million, up 13% year-over-year, in the upper end of the guidance range and a record for the semiconductor segment;
  • GAAP gross margins reached 49.3%; non GAAP gross margin of 49.4%;
  • GAAP operating margins of 12.0%; non-GAAP operating margins of 12.3%;
  • GAAP net profit of $11.7 million;
  • Non-GAAP net income from continuing semiconductor operations of $2.9 million; up 194% year-over-year;
  • End of quarter net cash balance of $21.7 million; additional $22.0 million received on October 2, 2017 as second installment of the PCB transaction.

Guidance for the Fourth Quarter of 2017

Fourth quarter revenues are expected to increase to between $24-25 million, while operating costs are expected to decrease and continue to benefit from Camtek becoming a focused semiconductor inspection and metrology company. As a result, non-GAAP operating margins are expected to improve to approximately 15% in the fourth quarter of 2017, with continued improvement in 2018.

Due to the completion of the sale of Camtek's PCB business at the end of the third quarter, the results of this unit ceased to be consolidated into Camtek's financial statements and are accounted for as discontinued operations in both the current period ended September 30, 2017, as well as the comparative periods. Following the sale of the PCB business, the Company recorded one-time income of $12.5 million to GAAP net income in the third quarter 2017 results. This amount is excluded from the non-GAAP results. The reconciliation between the GAAP and non-GAAP results appears in the tables at the end of this press release.

Dividend Announcement

Camtek's Board of Directors declared a cash dividend in the amount of $0.14 per share representing an aggregate distribution of approximately $4.9 million. The dividend will be paid on November 30, 2017 to all shareholders of record at the close of the NASDAQ Global Select Market on November 22, 2017.

Management Comment

Rafi Amit, Camtek's CEO, commented, "The past few months have been very significant for Camtek from a strategic perspective. We successfully completed the divestment of our PCB business, settled outstanding legal litigation and minimized our FIT-related expenses. Following these initiatives, Camtek has now become a focused semiconductor inspection and metrology company, with significantly reduced operating expenses, which will allow us to continue to support strong and growing levels of profitability."

Added Mr. Amit, "Our guidance for the fourth quarter calls for continued sequential growth in our revenue, built on strong momentum in our markets and we do not see any sign of a seasonal or other slowdown in demand. We intend to capitalize on this momentum and the opportunities we see in our end markets. We recently completed developing a number of breakthrough technologies which will enable us to increase our total available market. We expect them also to increase our market share both in the metrology and the inspection segments. We introduced our new inspection platform, EagleT2D, to the market at the beginning of the year and have already sold it to several major customers. Furthermore, our new system dedicated for the 3D Advance Packaging market, EagleT-AP, was tested by a number of tier-1 customers, showing excellent performance in terms of accuracy and throughput, leaving behind all our competitors' latest systems. Following the positive feedback from our customers, we expect to receive orders for multiple systems in the first half of 2018. We believe that these achievements will enable us to increase our dominance in the 3D segment of the advanced packaging sector, strengthening our leading competitive position."

Concluded Mr. Amit, "Given the significant $32 million in cash that we received from the PCB transaction, and in light of the high level of cash on our balance sheet, the Board of Directors decided to distribute dividend to shareholders which amounted to $4.9 million. This is a reflection of our continued success and our dedication to the creation of shareholder value. We look forward to bringing our business to the next level over the coming years, with even greater vigor and focus."

Third Quarter 2017 Financial Results

Revenues for the third quarter of 2017 were $23.8 million. This compares to third quarter 2016 revenues of $21.0 million, a growth of 13%.

Gross profit on a GAAP and non-GAAP basis in the quarter totaled $11.8 million (49.3% and 49.4% of revenues, respectively). This is compared to $4.4 million (20.9% of revenue) on a GAAP basis and $9.3 million (44.4% of revenues) on a non-GAAP basis in the third quarter 2016. The gross profit in 2016 on a GAAP basis included one-time costs related to the reorganization of Camtek's FIT business. The variance in the non-GAAP 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 $2.8 million (12.0% of revenues), compared to an operating profit of $0.3 million (1.4% of revenues) in the third quarter 2016.

Operating profit on a non-GAAP basis in the quarter totaled $2.9 million (12.3% of revenues), compared to $1.3 million (6.0% of revenues), in the third quarter 2016.

Net income on a GAAP basis in the quarter totaled $11.7 million, or $0.33 per share. This income consists of $2.8 million in net income from continuing operations and $8.9 million from the discontinued operations and the sale of the PCB business. This compares to net income of $1.1 million, or $0.03 per diluted share in the third quarter 2016.

Net income from continuing operations on a non-GAAP basis in the quarter totaled $2.9 million, or $0.08 per diluted share, compared to non-GAAP net income of $1.0 million, or $0.03 per diluted share, in the third quarter 2016.

Cash, cash equivalents, short and long-term restricted deposits, as of September 30, 2017 were $21.7 million compared to $19.7 million as of December 31, 2016. During the third quarter, Camtek paid Rudolph $13 million in a legal settlement. Camtek also received $10 million in initial proceeds from the sale of its PCB business. On October 2, 2017, Camtek received a further $22 million in proceeds from the sale of its PCB business.

Conference Call

Camtek will host a conference call today, November 7, 2017, at 9:00 am ET.

Rafi Amit, CEO, Moshe Eisenberg, CFO and Ramy Langer, VP, Head of the Semiconductors Business 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:

1 866 860 9642

at 9:00 am Eastern Time

Israel:

03 918 0685

at 4:00 pm Israel Time

International:

+972 3 918 0685


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 Semiconductors 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) discontinued operations; (ii) revaluation of liabilities with respect to the acquisition of Printar; (iii) share based compensation expenses, ( iv) changes in valuation allowance on deferred tax assets, and (v) settlement 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.

Camtek Ltd. and its Subsidiaries

Interim Unaudited Condensed Consolidated Balance Sheets

(In thousands)






September 30,

December 31,


2017

*2016


U.S. Dollars (in thousands)

Assets






Current assets



Cash and cash equivalents

21,686

19,740

Due from sale of PCB business

24,929

-

Trade accounts receivable, net

26,374

22,066

Inventories

21,891

16,647

Due from affiliated companies

430

-

Other current assets

2,396

2,039

Current assets held for sale

-

25,018




Total current assets

97,706

85,510







Property, plant and equipment, net

15,841

13,725




Long-term inventory

1,390

1,461

Deferred tax assets

5,048

**4,073

Other assets, net

270

270

Intangible assets, net

482

519




Total long-term assets

7,190

6,323




Total assets

120,737

105,558




Liabilities and shareholders' equity






Current liabilities



Short-term bank loans

3,000

-

Trade accounts payable

15,252

10,304

Other current liabilities

16,472

14,722

Due to affiliated companies

-

18

Current liabilities held for sale

-

6,482




Total current liabilities

34,724

31,526




Long term liabilities



Liability for employee severance benefits

826

667

Total long-term liabilities

826

667




Total liabilities

35,550

32,193




Shareholders' equity



Ordinary shares NIS 0.01 par value, 100,000,000 shares authorized at September 30, 2017 and at December 31, 2016;



37,509,868 issued shares at September 30, 2017 and 37,440,552 at December 31, 2016;



35,417,492 shares outstanding at September 30, 2017 and 35,348,176 at December 31, 2016;

148

148

Additional paid-in capital

77,184

76,463

Retained earnings (accumulated deficit)

9,753

(1,348)


87,085

75,263

Treasury stock, at cost (2,092,376 as of September 30, 2017 and December 31, 2016)

(1,898)

(1,898)




Total shareholders' equity

85,187

73,365




Total liabilities and shareholders' equity

120,737

105,558

* The financial position of the PCB business is presented as discontinued operations.

** Reclassified

Camtek Ltd. and its Subsidiaries

Interim Unaudited Condensed Consolidated Statements of Operations

(In thousands, except share data)





















Nine months ended

Three months

Year ended


September 30,

ended September 30,

December 31,


2017

*2016

2017

*2016

*2016


U.S. dollars

U.S. dollars

U.S. dollars







Revenues

67,641

57,703

23,813

21,034

79,228

Cost of revenues

34,447

30,371

12,063

11,706

41,807

Reorganization and impairment

-

4,931

-

4,931

4,931







Gross profit

33,194

22,401

11,750

4,397

32,490







Research and development costs

10,067

9,497

3,215

3,000

12,630

Selling, general and






administrative expenses

16,847

16,048

5,688

5,161

21,900

Reorganization and impairment

-

(4,059)

-

(4,059)

(4,059)

Expenses from settlement

13,000

-

-

-

-


39,914

21,486

8,903

4,102

30,471







Operating income (loss)

(6,720)

915

2,847

295

2,019







Financial income (expenses), net

(199)

(543)

10

(164)

(847)







Income (loss) from continuing operations before taxes

(6,919)

372

2,857

131

1,172







Income tax benefit (expense)

5,281

(271)

(83)

(124)

(303)







Net income (loss) from continuing operations

(1,638)

101

2,774

7

869







Discontinued operations *






Income from discontinued operations






Income before tax expense

18,302

2,807

13,963

1,308

4,450

Income tax expense

(5,563)

(521)

(5,058)

(237)

(585)







Income from discontinued operations

12,739

2,286

8,905

1,071

3,865







Net income

11,101

2,387

11,679

1,078

4,734

* The financial results of the PCB business are presented as discontinued operations.


Camtek Ltd. and its Subsidiaries

Interim Unaudited Condensed Consolidated Statements of Operations (contd.)

Net income (loss) per ordinary share:










Nine months ended

Three months ended

Year ended


September 30,

September 30

December 31


2017

*2016

2017

*2016

*2016


U.S. dollars

U.S. dollars

U.S. dollars

Basic earnings from continuing operations

(0.05)

0.00

0.08

0.00

0.02







Basic earnings from discontinued operations

0.36

0.06

0.25

0.03

0.11







Basic net earnings

0.31

0.07

0.33

0.03

0.13







Diluted earnings from continuing operations

(0.05)

0.00

0.08

0.00

0.02







Diluted earnings from discontinued operations

0.35

0.06

0.24

0.03

0.11







Diluted net earnings

0.31

0.07

0.32

0.03

0.13







Weighted average number of






ordinary shares outstanding:












Basic

35,374

35,348

35,404

35,348

35,348







Diluted

35,972

35,367

36,361

35,381

35,376

Camtek Ltd. and its Subsidiaries

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,


2017

2016

2017

2016

2016


U.S. dollars

U.S. dollars

U.S. dollars







Reported net income attributable to Camtek Ltd. on GAAP basis

11,101

2,387

11,679

1,078

4,734

Settlement expense, net of tax (1)

12,025

-

-

-

-

Realization of deferred tax assets (2)

(4,495)

-

-

-

-

Effect of FIT reorganization (3)

-

872

-

872

872

Acquisition of Sela and Printar related expenses (4)

-

183

-

-

183

Share-based compensation

276

269

92

96

363

Attributable to discontinued operations including income from sale of PCB business (5)

(12,739)

(2,286)

(8,905)

(1,071)

(3,865)







Non-GAAP net income

6,168

1,425

2,866

975

2,287







Non–GAAP net income per share, basic and diluted

0.17

0.04

0.08

0.03

0.06

Gross margin on GAAP basis from continuing operations

49.1%

38.8%

49.3%

20.9%

41.0%

Reported gross profit on GAAP basis

33,194

22,401

11,750

4,397

32,490

Effect of FIT reorganization (3)

-

4,931

-

4,931

4,931

Share-based compensation

28

26

9

9

31







Non- GAAP gross margin

49.1%

47.4%

49.4%

44.4%

47.3%

Non-GAAP gross profit

33,222

27,358

11,759

9,337

37,452







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

(6,720)

915

2,847

295

2,019

Settlement expense (1)

13,000

-

-

-

-

Effect of FIT reorganization (3)

-

872

-

872

872

Share-based compensation

276

269

92

96

363







Non-GAAP operating income

6,556

2,056

2,939

1,263

3,254

(1) During the nine months ended September 30, 2017, the Company recorded a provision of $13 million ($12 million net of tax) in conjunction settlement with Rudolph Technologies Inc.

(2) During the nine months ended September 30, 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.

(3) During the three and nine months ended September 30, 2016 and the year ended December 31, 2016, the Company recorded reorganization costs with regard to the FIT activities of $0.9 million, consisting of: (1) inventory and fixed asset write-offs of $4.9 million, recorded under cost of revenues line item; (2) other expenses of $0.1 million, recorded under cost of revenues line item; (3) fixed asset write-offs of $0.7 million, recorded under operating expenses; (4) other expenses of $0.2 million, recorded under operating expenses; and (5) income from write-off of liabilities to OCS $5.0 million, recorded under operating expenses.

(4) During the nine months ended September 30, 2016 and the year ended December 31, 2016, the Company recorded acquisition expenses of $0.2 million, consisting of revaluation adjustments of $0.2 million of contingent consideration and certain future liabilities recorded at fair value. These amounts are recorded under finance expenses line item.

(5) Due to the completion of the sale of Camtek's PCB business at the end of the third quarter of 2017, the results of this unit ceased to be consolidated into Camtek's financial statements and are accounted for as discontinued operations in both the current period ended September 30, 2017, as well as the comparative periods. Following the sale of the PCB business, the Company recorded one-time income of $12.5 million to GAAP net income in the third quarter 2017 results. This amount is excluded from the non-GAAP results.

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

View original content:http://www.prnewswire.com/news-releases/camtek-announces-third-quarter-2017-results-300550800.html

SOURCE Camtek Ltd