Camtek becomes a pure-play semiconductor company;
MIGDAL HAEMEK, Israel, Aug. 3, 2017 — (PRNewswire) — Camtek Ltd. (NASDAQ: CAMT) (TASE: CAMT), today announced its financial results for the quarter ended June 30, 2017.Recent Highlights
- Signed an agreement to sell the PCB business for up to $35 million;
- Reached final settlement with Rudolph Technologies; and
- Adjusted FIT related expenses to a run rate of $100-125K per quarter.
Financial Highlights of the Second Quarter 2017
- Total revenues (including revenue from the discontinued PCB operations) were $34.3 million, ahead of the guidance range;
- Record revenues in the semiconductor segment of $22.7 million, up 14% year over year;
- GAAP net loss of $3.9 million; mainly due to the $13 million settlement charge
- Non-GAAP net income of $3.8 million;
- Strong operating cash flow of $3.8 million; end of quarter net cash of $27.1 million;
Guidance for the Second Half of 2017
Due to the significant business changes that Camtek has undergone, Camtek is providing additional metrics to enable investors and analysts to better model the new business structure for the remainder of 2017.
Third quarter revenues (semiconductors only) are expected to be between $23-24 million, a year-over-year increase of 12% with gross margins at around 50% and double-digit operating margins.
Fourth quarter revenues are expected to be slightly higher than those of the third quarter while operating costs are expected to reduce and benefit from the reduction in legal and FIT expenses. Non-GAAP operating margins are expected to improve to an approximately 15% in the fourth quarter of 2017 with continued improvement in 2018.
Due to the expected sale of Camtek's PCB business, 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 June 30, 2017 as well as the comparative periods. Following the settlement with Rudolph Technologies, there is a one-time charge of $13 million on GAAP net income in the second quarter 2017 results. This amount is excluded from the non-GAAP results. A reconciliation between the GAAP and non-GAAP results appears in the tables at the end of this press release.
Rafi Amit, Camtek's CEO, commented, "The past few months have been very significant for Camtek from a strategic perspective. We are divesting our PCB business at a time of positive momentum in that sector, to a Shanghai-based private equity fund. Following our decision to focus on ink development and a strategic cooperation with a world leading ink developer and manufacturer, we managed to adjust our FIT-related expenses. We also settled outstanding IP litigation which has been an overhang for more than a decade, and this allows us to significantly reduce our ongoing legal-related expenses. Following these initiatives, Camtek has now become a focused semiconductor inspection and metrology company. We have a very strong balance sheet, opening up many potential opportunities on which we intend to capitalize. Our goal is to cement ourselves as the leading advanced packaging inspection and metrology Company for the semiconductor industry."
"Looking ahead, we expect to see longer-term higher revenue growth rates for Camtek. Additionally, we expect to demonstrate higher gross margins and lower operating expenses, leading to significantly improved operating margins. This should be evident already in the coming quarters, and we expect our fourth quarter results to demonstrate approximately 15% operating margin with potential for further improvement in 2018," continued Mr. Amit.
Concluded Mr. Amit, "We believe the recent actions we have taken will enable the value in Camtek to become more apparent and increase shareholder value. We look forward to taking our business to the next level over the coming years, with even greater vigor and focus."
Second Quarter 2017 Financial Results
Revenues for the second quarter of 2017 were $22.7 million. This compares to second quarter 2016 revenues of $19.8 million, a growth of 14%. Revenues do not include those of the PCB business, whose sale is expected to close in the third quarter, which are accounted for as discontinued operations.
Gross profit on a GAAP and non-GAAP basis in the quarter totaled $11.2 million (49.2% of revenues), compared to $10.0 million (50.5% of revenues) in the second quarter 2016. The variance in the gross margin is a function of the product and sales mix in the quarter.
Operating loss on a GAAP basis in the quarter totaled $11.0 million, compared to an operating income of $0.8 million (3.9% of revenues), in the second quarter 2016. This includes the one-time $13 million charge for the Rudolph settlement.
Operating profit on a non-GAAP basis in the quarter totaled $2.1 million (9.2% of revenues), compared to $0.9 million (4.5% of revenues), in the second quarter 2016.
Net loss on a GAAP basis in the quarter totaled $3.9 million, or $0.11 per share. This compares to net income of $1.3 million, or $0.04 per diluted share, in the second quarter 2016. This includes a deferred tax income of $5.5 million and the results of the discontinued operations.
Net income on a non-GAAP basis in the quarter totaled $3.8 million, or $0.11 per diluted share. This compares to net income of $1.5 million, or $0.04 per diluted share, in the second quarter 2016.
Cash and cash equivalents as of June 30, 2017 were $27.1 million compared to $24.3 million as of March 31, 2017. The $13 million settlement amount is expected to be paid in the third quarter. The Company reported a positive operating cash flow of $3.7 million during the quarter.
Conference Call
Camtek will host a conference call today, August 3, 2017, at 9:00 am ET.
Rafi Amit, CEO, Moshe Eisenberg, CFO and Ramy Langer, VP Head of the Semiconductors Division 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.
