Camtek Announces Fourth Quarter and Full Year 2017 Results

 

Record semiconductor revenues of $25.8 million, 20% increase YoY;

Expects continued double-digit revenue growth in 2018

MIGDAL HAEMEK, Israel, Feb. 7, 2018 /PRNewswire/ -- Camtek Ltd. (NASDAQ: CAMT) (TASE: CAMT), today announced its financial results for the quarter ended December 31, 2017.

Highlights of the fourth quarter 2017

  • Semiconductor revenues were $25.8 million, up 20% year-over-year, ahead of the upper end of the previously issued guidance range and a record for the semiconductor segment;
  • GAAP operating income of $3.7 million, representing 14.3% operating margins; non-GAAP operating income of $3.8 million, representing 14.8% operating margins
  • GAAP net income from continued operations of $3.3 million; non-GAAP net income of $3.5 million; up 333% and 303% year-over-year, respectively;
  • First quarter revenue guidance of $26-27 million, represents approximately 25% year-over-year growth

Highlights of the full year 2017

  • Semiconductors revenues of $93.5 million; 18% year over year increase;
  • GAAP operating loss of $3 million; non-GAAP operating income of $10.4 million
  • GAAP net income from continued operations of $1.7 million; non-GAAP net income of $9.6 million;
  • Year-end net cash balance of $43.7 million;

Forward Looking Guidance

First quarter 2018 revenues are expected to be between $26-27 million, representing a year-over-year increase of approximately 25%.  The Company expects continued double-digit growth in revenues in 2018, with overall improvement in non-GAAP operating margins.

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. However, they are accounted for as discontinued operations in the full year 2017 results, as well as in the comparative periods. Following the sale of the PCB business, the Company recorded a one-time income of $12.5 million to GAAP net income in 2017. In addition, Camtek paid a one-time legal settlement during 2017 amounting to $13 million. These amounts are 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. The comparisons to 2016 results below include the results only of the continuing operations.

Management Comment

Rafi Amit Camtek's CEO commented, "We are proud to present strong financial results for 2017. The highlight of the year was the strategic steps we took of evolving into a pure-play semiconductor capital equipment company."

Continued Mr. Amit, "We are optimistic with regards to the year ahead. Our cash and strong balance sheet put us in a strong position, which enables us to capitalize on potential growth opportunities. Furthermore, we started the year with our highest ever backlog level, and we have already seen some strong and early order momentum. Accordingly, we expect double-digit revenue growth in 2018, and combined with our strong operating leverage, we expect to enjoy a strong year of profitability."

The financial results and the comparison to 2016 below include only those of the continuing operations:

Fourth Quarter 2017 Financial Results

Revenues for the fourth quarter of 2017 were $25.8 million. This compares to fourth quarter 2016 revenues of $21.5 million, a growth of 20%.

Gross profit on a GAAP and non-GAAP basis in the quarter totaled $12.3 million (47.7% and 47.8% of revenues, respectively). This is compared to $10.1 million (46.9% of revenue) on a GAAP and non-GAAP basis in the fourth quarter 2016. 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 $3.7 million (14.3% of revenues), compared to an operating profit of $1.1 million (5.1% of revenues) in the fourth quarter 2016.

Operating profit on a non-GAAP basis in the quarter totaled $3.8 million (14.8% of revenues), compared to $1.2 million (5.6% of revenues), in the fourth quarter 2016.

Net income on a GAAP basis in the quarter totaled $3.3 million, or $0.09 per diluted share compared to net income of $0.8 million, or $0.02 per diluted share in the fourth quarter 2016. 

Net income on a non-GAAP basis in the quarter totaled $3.5 million, or $0.10 per diluted share, compared to non-GAAP net income of $0.9 million, or $0.02 per diluted share, in the fourth quarter 2016. 

Cash and cash equivalents, as of December 31, 2017 were $43.7 million compared to $19.7 million as of December 31, 2016. During the quarter, Camtek received $24 million in proceeds from the sale of its PCB business and paid out $5.0 million as a dividend payment to shareholders.

Full Year 2017 Results Summary

Revenues for 2017 were $93.5 million. This compares to revenues of $79.3 million in 2016, a growth of 18%.

Gross profit on a GAAP basis totaled $45.5 million (48.7% of revenues), compared to $32.5 million (41.0% of revenues) in 2016.  The gross profit on a GAAP basis in 2016 includes a $4.9 million effect of the FIT re-organization including the write-off of inventory and other one-time expenses.

Gross profit on a non-GAAP totaled $45.6 million (48.7% of revenues), compared to $37.5 million (47.3% of revenues) in 2016.

Operating loss on a GAAP basis totaled $3.0 million, compared to operating profit of $2.0 million (2.5% of revenues) in 2016.  The operating loss in 2017 included a one-time expense of $13 million due to a settlement payment. The operating profit in 2016 included a $4.1 million expense due to the reorganization of the Printar business unit.

Operating profit on a non-GAAP basis totaled $10.4 million (11.1% of revenues), compared to $3.3 million (4.1% of revenues) in 2016.

Net income on a GAAP basis totaled $1.7 million, or $0.05 per diluted share. This compares to net income of $0.9 million, or $0.02 per diluted share, in 2016.

Net income on a non-GAAP basis totaled $9.6 million, or $0.27 per diluted share. This compares to net income of $2.3 million, or $0.06 per diluted share, in 2016. 

Conference Call

Camtek will host a conference call today, February 7, 2018, at 9:00 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:                                           

1 866 860 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) settlement expenses; (ii) changes in valuation allowance on deferred tax assets; (iii) share based compensation expenses, (iv) discontinued operations, and (v) revaluation of liabilities with respect to the acquisition of Printar and reorganization 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.

Consolidated Balance Sheets



December 31,


2017

*2016


U.S. Dollars (In thousands)

Assets



Current assets



Cash and cash equivalents

43,744

19,740

Accounts receivable, net

23,153

22,066

Inventories

21,336

16,647

Due from affiliated companies

681

-

Other current assets

2,534

2,039

Current assets held for sale

-

25,018

Total current assets

91,448

85,510




Fixed assets, net

15,503

13,725




Long term inventory

1,383

1,461

Deferred tax asset

4,067

**4,073

Other assets, net

153

270

Intangible assets, net

482

519

Total long-term assets

6,085

6,323




Total assets

113,036

105,558




Liabilities and shareholders' equity






Current liabilities



Accounts payable – trade

10,502

10,304

Other current liabilities

17,395

14,722

Due to affiliated companies

-

18

Current liabilities held for sale

-

6,482

Total current liabilities

27,897

31,526




Long term liabilities



Liability for employee severance benefits

838

667

Total long-term liabilities

838

667




Total liabilities

28,735

32,193




Commitments and contingencies






Shareholders' equity



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



 37,924,507 issued as of December 31, 2017, and 37,440,552 as of



 December 31, 2016, outstanding 35,832,131 as of December 31, 2017,



 and 35,348,176 as of December 31, 2016

149

148

Additional paid-in capital

78,437

76,463

Retained earnings (losses)

7,613

(1,348)


86,199

75,263

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

(1,898)

(1,898)




Total shareholders' equity

84,301

73,365




Total liabilities and shareholders' equity

113,036

105,558


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

** Reclassified – Due to the retroactive implementation of ASU No. 2015-17, "Balance Sheet Classification of Deferred Taxes"

 

 

Camtek Ltd.

Consolidated Statements of Operations

(In thousands, except share data)



Year ended December 31,

Three Months ended December 31,


2017

*2016

2017

*2016


U.S. dollars

U.S. dollars






Revenues

93,485

79,228

25,844

21,525

Cost of revenues

47,966

41,807

13,519

11,436

Reorganization

-

4,931

-

-






Gross profit

45,519

32,490

12,325

10,089











Research and development costs

13,534

12,630

3,467

3,133

Selling, general and administrative expenses

22,022

21,900

5,175

5,852

Implication of re-organization

-

(4,059)

-

-

Expenses from settlement

13,000

-

-

-


48,556

30,471

8,642

8,985











Operating income (loss)

(3,037)

2,019

3,683

1,104






Financial income (expenses), net

(150)

(847)

49

(304)






Income (loss) before income taxes

(3,187)

1,172

3,732

800






Income taxes (expense)

4,875

(303)

(406)

(32)






Net income from continuing operations

1,688

869

3,326

768











Discontinued operations *





Income from discontinued operations





Income before tax expense

18,302

4,450

-

1,643

Income taxes (expense)

(6,028)

(585)

(465)

(64)

Income (loss) from discontinued operations

12,274

3,865

(465)

1,579






Net income

13,962

4,734

2,861

2,347

 


 

Net income (loss) per ordinary share:


Year ended December 31,

Three Months ended December 31,


2017

2016

2017

2016


U.S. dollars

U.S. dollars






Basic earnings from continuing operation

0.05

0.02

0.09

0.02






Basic earnings (losses) from discontinued operation

 

0.35

 

0.11

 

(0.01)

 

0.05






Basic net earnings

0.4

0.13

0.08

0.07






Diluted earnings from continuing operation

 

0.05

 

0.02

 

0.09

 

0.02






Diluted earnings (losses) from discontinued operation

 

0.34

 

0.11

 

(0.01)

 

0.04






Diluted net earnings

0.39

0.13

0.08

0.07






Weighted average number of





  ordinary shares outstanding:










Basic

35,441

35,348

35,644

35,348






Diluted

35,964

35,376

36,094

35,396

(*) 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 

Three Months ended 

December 31,

December 31,


2017

2016

2017

2016


U.S. dollars 

U.S. dollars






Reported net income (loss)

13,962

4,734

2,861

2,347

  attributable to Camtek Ltd.

  on GAAP basis

Settlement expense, net of tax (1)

12,025

-

-

-

Realization of deferred tax assets (2)

(4,495)

-

-

-

Share-based compensation

426

363

150

94

Effect of FIT reorganization (3)

-

872

-

-

Acquisition of Sela and Printar related expenses (4)

-

183

-

-

Attributable to discontinued operations

(12,274)

(3,865)

465

(1,579)

  including income from sale of PCB business (5)

Non-GAAP net income

9,644

2,287

3,476

862






Non–GAAP net incomeper share,

0.27

0.06

0.1

0.02

  basic and diluted

Gross margin on GAAP basis 

48.70%

41.00%

47.70%

46.90%

Reported gross profit on GAAP basis

45,519

32,490

12,325

10,089

Share-based compensation

44

31

16

5

Effect of FIT reorganization (3)

-

4,931

-

-

Non-GAAP gross margin

48.70%

47.30%

47.80%

46.90%

Non-GAAP gross profit 

45,563

37,452

12,341

10,094






Reported operating income (loss)

(3,037)

2,019

3,683

1,104

  attributable to Camtek Ltd. on GAAP basis

Settlement expense (1)

13,000

-

-

-

Share-based compensation

426

363

150

94

Effect of Fit reorganization (3)

-

872

-

-

Non-GAAP operating income 

10,389

3,254

3,833

1,198

 

 

(1)     During 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.

(2)     During 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.

(3)     During 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 of $5.0 million, recorded under operating expenses.

(4)     During 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 December 31, 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 2017 full year 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

Cision View original content:http://www.prnewswire.com/news-releases/camtek-announces-fourth-quarter-and-full-year-2017-results-300594965.html

SOURCE Camtek Ltd



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http://www.camtek.com

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