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Camtek Announces Record Results for the Fourth Quarter and Full Year 2018

Expects Continued Strength into the First Quarter

MIGDAL HAEMEK, Israel, Feb. 13, 2019 /PRNewswire/ -- Camtek Ltd. (CAMT) (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 December 31,

Three Months 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 December 31,  

Three Months 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 31,

Three Months ended 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

Reported gross profit on GAAP basis

 

 

49.4%

60,796

 

48.7%

45,519

 

50.4%

16,717

 

47.7%

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.

 

Cision

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