Camtek Announces Fourth Quarter and Full Year 2017 Results

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.

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.

(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.

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SOURCE Camtek Ltd