PR Newswire | Aug 5, 2020 06:01AM EDT

08/05 05:00 CDT

Camtek Announces Results for the Second Quarter of 2020Record Revenues of $37.0 million, 17.2% Operating Margin, Expects Continued Growth MIGDAL HAEMEK, Israel, Aug. 5, 2020

MIGDAL HAEMEK, Israel, Aug. 5, 2020 /PRNewswire/ -- Camtek Ltd. (NASDAQ: CAMT) (TASE: CAMT), today announced its financial results for the quarter ended June 30, 2020.

Highlights of the Second Quarter 2020

* Revenues were a quarterly record at $37.0 million, up 8% year-over-year; * GAAP gross margin at 45.8%; Non-GAAP gross margin at 46.1%; * GAAP operating income was $5.4 million and non-GAAP operating income was $6.4 million, representing margins of 14.6% and 17.2%, respectively; * GAAP net income of $5.3 million, or $0.13 per diluted share, non-GAAP net income of $6.3 million, or $0.16 per diluted share; and * Strong operating cash flow of $11.1 million with $101.5 million in net cash and short-term deposits at quarter-end.

Forward-Looking Expectations

Based on orders on hand, management expects continued revenue growth and improved profitability in the third quarter. Management expects revenues for the third quarter to be between $38-39 million.

Management Comment

Rafi Amit Camtek's CEO commented, "Camtek's second quarter results reflect continued demand for our products, especially in Asia.

"We have increased our market share in 2D inspection mainly as a result of the significant improvement in our system performance and competitiveness in all 2D applications. In addition, we are benefitting from our strategy of having in place local professional teams that can independently install and support machines in all our territories. This has enabled us to continue growing our business even during the COVID-19 pandemic."

Continued Mr. Amit,"The revenues in the second quarter were at a record level, and the ongoing demands from our customers for various applications point to a strong third quarter, with encouraging backlog for the fourth quarter. However, it is important to stress that we are still seeing the Coronavirus pandemic effects, which increase risks and uncertainties."

Second Quarter 2020 Financial Results

Revenues for the second quarter of 2020 were $37.0 million. This compares to second quarter 2019 revenues of $34.3 million, a growth of 8%.

Gross profit on a GAAP basis in the quarter totaled $16.9 million (45.8% of revenues), up 2% compared to a gross profit of $16.6 million (48.2% of revenues) in the second quarter of 2019. Gross profit on a non-GAAP basis in the quarter totaled $17.0 million (46.1% of revenues), up 3% compared to a gross profit of $16.6 million (48.4% of revenues) in the second quarter of 2019.

Operating profit on a GAAP basis in the quarter totaled $5.4 million (14.6% of revenues), compared to an operating profit of $6.4 million (18.5% of revenues) in the second quarter of 2019. Operating profit on a non-GAAP basis in the quarter totaled $6.4 million (17.2% of revenues), compared to $7.0 million (20.5% of revenues) in the second quarter of 2019.

Net income on a GAAP basis in the quarter totaled $5.3 million, or $0.13 per diluted share, compared to net income of $7.2 million, or $0.19 per diluted share, in the second quarter of 2019. Net income on a non-GAAP basis in the quarter totaled $6.3 million, or $0.16 per diluted share, compared to a non-GAAP net income of $6.7 million, or $0.18 per diluted share, in the second quarter of 2019.

Cash and cash equivalents and short-term deposits, as of June 30, 2020, were $101.5 million compared to $89.5 million as of December 31, 2019. During the quarter, the Company generated a positive operating cash flow of $11.1 million, of which $7.6 million were advanced payments from customers.

Conference Call

Camtek will host a conference call today, August 5, 2020, 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:1 888 407 2553 at 9:00 am Eastern TimeIsrael:03 918 0610 at 4:00 pm Israel TimeInternational:+972 3 918 0610

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.

A summary presentation of the quarterly results will also be available on Camtek's website.

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 contains projections or other forward-looking statements regarding future events or the future performance of the Company. These statements are only predictions that represent our views only as of the date they are made and may change as time passes. We do not assume any obligation to update that information, except as required by law. These forward-looking statements are subject to risks and uncertainties that may cause actual events or results to differ materially from those projected, including as a result of the effects of general economic conditions; the effect of the COVID-19 crisis on the global markets and on the markets in which we operate, including the risk of a continued disruption to our and our customers', providers', business partners and contractors' business as a result of the outbreak and effects of the COVID-19 pandemic; the risks relating to the concentration of a significant portion of Camtek's expected business in certain countries, particularly China, from which we expect to generate significant portion of our revenues for the second half of 2020, but also Taiwan and Korea, including the risks of deviations from our expectations regarding timing and size of orders from customers in these countries; 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 other risks identified in our Annual Report on Form 20-F and other documents filed by the Company with the SEC.

This press release provides financial measures that exclude: (i) share based compensation expenses; (ii) certain Chroma transaction expenses; and (iii) discontinued operations, 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

Consolidated Balance Sheet

(In thousands)

June December 31, 30,

2020 2019

U.S. Dollars (In thousands)

Assets

Current assets

Cash and cash equivalents 32,469 38,047

Short-term deposits 69,000 51,500

Trade accounts receivable, net 39,528 31,443

Inventories 29,537 23,803

Other current assets 3,523 2,909

Total current assets 174,057 147,702

Fixed assets, net 18,800 18,526

Long term inventory 3,292 2,791

Deferred tax asset 520 746

Other assets, net 80 113

Intangible assets, net 574 491

4,466 4,141

Total assets 197,323 170,369

Liabilities and shareholders' equity

Current liabilities

Trade accounts payable 20,561 11,334

Other current liabilities 28,170 20,272

Total current liabilities 48,731 31,606

Long term liabilities

Other long term liabilities 2,100 2,461

2,100 2,461

Total liabilities 50,831 34,067

Commitments and contingencies

Shareholders' equity

Ordinary shares NIS 0.01 par value, 100,000,000shares authorized atJune 30, 2020 and at December 31, 2019;

41,124,714 issued shares at June 30, 2019 and40,742,355 atDecember 31, 2019;

39,032,338 shares outstanding at June 30, 2020 and38,649,979 at 158 157December 31, 2019

Additional paid-in capital 103,428 101,327

Retained earnings 44,804 36,716

148,390 138,200

Treasury stock, at cost (2,092,376 as of June 30,2020 and December (1,898) (1,898)31, 2019)

Total shareholders' equity 146,492 136,302

Total liabilities and shareholders' equity 197,323 170,369

Camtek Ltd.

Consolidated Statements of Operations

(in thousands, except share data)

Three Months Year Six Months ended ended June 30, ended June 30, December 31,

2020 2019 2020 2019 2019

U.S. dollars U.S. dollars U.S. dollars

Revenues 67,179 68,348 37,000 34,346 134,019

Cost of revenues 36,679 34,623 20,057 17,777 69,235

Gross profit 30,500 33,725 16,943 16,569 64,784

Research and development costs 8,884 7,727 4,754 3,803 16,331

Selling, general and administrative 13,338 12,987 6,779 6,412 26,481expenses

22,222 20,714 11,533 10,215 42,812

Operating income 8,278 13,011 5,410 6,354 21,972

Financial income, net 651 152 276 135 801

Income from continuing operations

before income taxes 8,929 13,163 5,686 6,489 22,773

Income tax expense (841) (1,110) (378) (463) (1,950)

Net income from continuing 8,088 12,053 5,308 6,026 20,823operations

Discontinued operations *

Income from discontinued operations

Income before tax expense - 1,257 - 1,257 1,257

Income tax expense - 94 - 94 94

Net income from discontinued - 1,163 - 1,163 1,163operations

Net income 8,088 13,216 5,308 7,189 21,986

*Relates to the earn-out payment received from the sale of the PCB business.

Net income per ordinary share:

Six months Three months Year ended ended

June 30, ended June December 30, 31,

2020 2019 2020 2019 2019

Note U.S. dollars U.S. dollars U.S. dollars

Basic earnings from 0.21 0.33 0.14 0.16 0.55continuing operation

Basic earnings from - 0.03 - 0.03 0.03discontinued operation

Basic net earnings 0.21 0.36 0.14 0.19 0.58

Diluted earnings from 0.20 0.32 0.13 0.16 0.54continuing operation

Diluted earnings from discontinued - 0.03 - 0.03 0.03operations

Diluted net earnings 0.20 0.35 0.13 0.19 0.57

Weighted average number of

ordinary shares outstanding

(in thousands):

Basic 38,849 36,644 39,033 36,816 37,626

Diluted 39,779 37,476 39,940 37,734 37,432

Camtek Ltd.

Reconciliation of GAAP To Non-GAAP results

(In thousands, except share data)

Six Months ended, Year ended June 30th Six Months ended, December 31, June 30th

2020 2019 2020 2019 2019

U.S. Dollars U.S. Dollars U.S. Dollars

Reported net income attributable to 8,088 13,216 5,308 7,189 21,986Camtek Ltd. on GAAP basis

Share-based compensation 1,768 1,250 951 605 2,892

Chroma transaction expenses (1) - 73 - 73 136

Attributable to discontinued operations - (1,163) - (1,163) (1,163)

Non-GAAP net income 9,856 13,376 6,259 6,704 23,851

Non-GAAP net income per diluted share 0.25 0.37 0.16 0.18 0.62

Gross margin on GAAP basis from continuing operations 45.4% 49.4% 45.8% 48.2% 48.3%

Reported gross profit on GAAP basis 30,500 33,725 16,943 16,569 64,784

Share-based compensation 189 122 103 61 292

Non- GAAP gross margin 30,689 33,847 17,046 16,630 65,076

Non-GAAP gross profit 45.7% 49.5% 46.1% 48.4% 48.6%

Reported operating income attributableto Camtek Ltd. on GAAP basis from continuing operations 8,278 13,011 5,410 6,354 21,972

Share-based compensation 1,768 1,250 951 605 2,892

Chroma transaction expenses (1) - 73 - 73 136

Non-GAAP operating income 10,046 14,334 6,361 7,032 25,000

(1) In the second and third quarters of 2019, certain transaction expenseswere incurred in relation to the technological cooperation agreement withChroma. These were recorded under operating expenses.

CAMTEK LTD. INTERNATIONAL INVESTOR RELATIONS Moshe Eisenberg, CFO GK Investor RelationsTel: +972 4 604 8308 Ehud HelftMobile: +972 54 900 7100 Tel: (US) 1 646 688 3559

moshee@camtek.com camtek@gkir.com



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SOURCE Camtek Ltd