Shamir Optical Industry
Shamir Optical Industry Ltd. Reports Third Quarter 2009 Results
Wednesday 18 November 2009
KIBBUTZ SHAMIR, Israel, Nov. 18 /PRNewswire-FirstCall/ -- Shamir Optical Industry Ltd. (NASDAQ: SHMR) ("Shamir"), a leading provider of innovative products and technology to the ophthalmic lens market, today announced unaudited financial results for the third quarter ended September 30, 2009.
For the quarter ended September 30, 2009, revenues were $36.2 million, compared to $36.1 million for the third quarter of 2008. Gross profit for the quarter increased 3.8% to $19.7 million, or 54.6% of revenues, compared to gross profit of $19.0 million, or 52.7% of revenues for the same period last year.
For the quarter ended September 30, 2009, operating income increased 64.3% to $4.8 million, or 13.4% of revenues, compared to operating income of $2.9 million, or 8.2% of revenues for the same period last year. Net income for the quarter increased 67.7% to $3.7 million compared to net income of $2.2 million for the comparable period in 2008. Net income attributable to Shamir's shareholders was $0.22 per diluted share, compared with $0.13 per diluted share for the same period in 2008.
For the quarter ended September 30, 2009, excluding the effects of non-cash stock-based compensation expenses amortization of intangible assets, and in 2008 compensation to our former Chief Executive Officer, non-GAAP operating income was $5.2 million, or 14.3% of revenues, compared to non-GAAP operating income of $3.8 million, or 10.4% of revenues for the same period of 2008.
Excluding the effect of non-cash stock-based compensation expenses, amortization of intangible assets, and in 2008 compensation to our former Chief Executive Officer, net of tax, net income attributable to Shamir's shareholders for the quarter was $3.9 million, or $0.24 per diluted share, compared to net income of $2.9 million, or $0.18 per diluted share for the same period last year.
The reconciliation of GAAP operating income and net income to non-GAAP operating income and non-GAAP net income is set forth below.
As of September 30, 2008, the Company had cash and cash equivalents, including short-term investments of $28.1 million.
Commenting on the results, Amos Netzer, Chief Executive Officer of Shamir, said, "Shamir preformed well in the third quarter, particularly in light of the difficult economic environment throughout the world. We executed solidly and continued to make important inroads in many of our operating markets, with the goal of advancing the recognition of Shamir-branded products. Concurrent with these efforts, we continue to stress the importance of strict cost controls, which has always been a centerpiece of our operating philosophy, but has become increasingly important during these difficult economic times."
Mr. Netzer continued, "To support our long range goals of expanding our worldwide sales and manufacturing capabilities, we recently purchased a 66.6% stake in a local lab in Australia that currently has annual revenue of approximately USD $7 million. We are enthusiastic about this opportunity and are confident in our ability to penetrate and expand our holdings in this new market and to promote the Shamir brand in this region. This new acquisition follows the recently reported gain of control of our lab in Thailand which as of this quarter was consolidated into our reported financial results."
Mr. Netzer concluded, "In terms of our overall strategy, we continue to maintain a strong balance between investing in long-term growth and monitoring operational expenses, which has helped us achieve positive performance thus far this year."
Conference Call:
Shamir has scheduled a conference call for 10:00 a.m. ET today to discuss third quarter results. To participate in the call, please dial (888) 562-3356 (U.S. and Canada) or (973) 582-2700 (International). The conference ID for this event is 40966354. For those unable to participate there will be replay available from 12:00 p.m. ET on November 18, 2009, through 11:59 p.m. ET, November 25, 2009. Please call: (800) 642-1687 (U.S. and Canada) (706) 645-9291 (International). The ID code for the replay is 40966354.
The call will be available as a live, listen-only webcast at www.kcsa.com. Please go to the KCSA website at least 15 minutes prior to the scheduled start time to register, download and install any necessary audio software. A 30-day archive of the webcast will be available approximately 2 hours after the conclusion of the live call.
About non - GAAP financial measures
This press release includes non-GAAP financial measures - non-GAAP operating income and non-GAAP net income - that exclude certain charges. The presentation of this 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 of Shamir believes that non-GAAP operating income and non-GAAP net income provides meaningful supplemental information because these numbers, which exclude the effect of non-cash stock-based compensation expenses amortization of intangible assets and compensation to former Chief Executive Officers, reflect our core operational results and are used by management internally to review Shamir's financial results.
About Shamir
Shamir is a leading provider of innovative products and technology to the spectacle lens market. Utilizing its proprietary technology, the company develops, designs, manufactures, and markets progressive lenses to sell to the ophthalmic market. In addition, Shamir utilizes its technology to provide design services to optical lens manufacturers under service and royalty agreements. Progressive lenses are used to treat presbyopia, a vision condition where the eye loses its ability to focus on close objects. Progressive lenses combine several optical strengths into a single lens to provide a gradual and seamless transition from near to intermediate, to distant vision. Shamir differentiates its products from its competitors' primarily through lens design. Shamir's leading lenses are marketed under a variety of trade names, including Shamir Genesis™, Shamir Piccolo™, Shamir Office™, Shamir Nano™, Shamir Autograph™ and Shamir Smart™. Shamir believes that it has one of the world's preeminent research and development teams for progressive lenses, molds, and complementary technologies and tools. Shamir developed software dedicated to the design of progressive lenses. This software is based on Shamir's proprietary mathematical algorithms that optimize designs of progressive lenses for a variety of activities and environments. Shamir also has created software tools specifically designed for research and development and production requirements, including Eye Point Technology software, which simulates human vision.
Safe Harbor Statement
Statements concerning Shamir's business outlook or future economic performance; product introductions and plans and objectives related thereto; and assumptions made or expectations as to any future events, conditions, performance or other matters, are "forward-looking statements" as that term is defined under U.S. federal securities laws. Forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from those stated in such statements. These risks, uncertainties and factors include, but are not limited to: The conflicts in the region; the effects of competition in our industry, and changes in our relationships with optical laboratories, distributors, research and development partners and other third parties; the effects of the international expansion of our operations and our ability to manage our growth, including our ability to manage potential future acquisitions; the effect of global economic conditions in general and conditions in Shamir's industry and target markets in particular; shifts in supply and demand; market acceptance of new products and continuing products' demand; the impact of competitive products and pricing on Shamir's and its customers' products and markets; timely product and technology development/upgrades and the ability to manage changes in market conditions as needed; interest rate fluctuations; and other factors detailed in Shamir's filings with the Securities and Exchange Commission. Shamir assumes no obligation to update the information in this release.
(Tables to follow)
SHAMIR OPTICAL INDUSTRY LTD.
Consolidated Balance Sheets
(US dollars in thousands, except As of As of
share and per share data) December 31, September 30,
2008 2009
---- ----
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $18,276 $13,395
Short-term investment 7,187 14,723
Trade receivables (1) 30,331 35,176
Other receivables and prepaid expenses 8,469 9,299
Inventory 26,063 27,206
------ ------
TOTAL CURRENT ASSETS 90,326 99,799
LONG-TERM INVESTMENTS:
Severance pay fund 2,584 2,854
Long-term receivables 813 242
Investments in affiliates 2,085 1,319
----- -----
TOTAL LONG-TERM INVESTMENTS 5,482 4,415
PROPERTY, PLANT AND EQUIPMENT, NET 38,617 38,369
OTHER ASSETS 5,902 5,949
GOODWILL 9,169 9,764
----- -----
TOTAL ASSETS $149,496 $158,296
======== ========
CURRENT LIABILITIES:
Short-term bank credit and loans $11,597 $9,224
Current maturities of long-term loans 10,403 6,562
Trade payables 8,876 11,583
Accrued expenses and other liabilities 11,680 14,324
------ ------
TOTAL CURRENT LIABILITIES 42,556 41,693
LONG-TERM LIABILITIES:
Long-term loans 9,800 7,522
Capital leases 3,393 2,625
Accrued severance pay 3,172 3,276
Other long-term liabilities 634 560
Deferred income taxes 1,922 1,988
----- -----
TOTAL LONG-TERM LIABILITIES 18,921 15,971
EQUITY:
Share capital
Common shares of NIS 0.01 par value
Authorized: 100,000,000 shares at
December 31, 2008 and September
30, 2009; Issued and outstanding:
16,423,740 shares at December 31,
2008 and September 30, 2009 37 37
Additional paid-in capital 67,362 67,733
Accumulated other comprehensive income (2,637) (876)
Retained earnings 22,007 31,451
------ ------
Total Shamir Optical Industry Ltd.
Shareholders' equity 86,769 98,345
Non-controlling interests 1,250 2,287
----- -----
TOTAL EQUITY 88,019 100,632
------ -------
TOTAL LIABILITIES AND EQUITY $149,496 $158,296
======== ========
(1) Net of allowance for doubtful accounts of $2,159 and $2,691 as of
December 31, 2008 and September 30, 2009, respectively.
SHAMIR OPTICAL INDUSTRY LTD.
Consolidated Statements of Income
(US dollars in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- --------------------
2008 (1) 2009 2008 (1) 2009
-------- ---- -------- ----
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues, net $36,118 $36,157 $111,171 $105,311
Cost of revenues 17,098 16,410 51,272 48,748
------ ------ ------ ------
Gross profit 19,020 19,747 59,899 56,563
Operating Expenses:
Research and
development costs 868 802 2,607 2,332
Selling and
marketing
expenses 10,472 10,274 33,527 30,422
General and
administrative
expenses 4,733 3,828 13,308 11,023
----- ----- ------ ------
Total operating
expenses 16,073 14,904 49,442 43,777
------ ------ ------ ------
Operating income 2,947 4,843 10,457 12,786
Financial expenses
and other, net 369 335 869 237
--- --- --- ---
Income before taxes
on income 2,578 4,508 9,588 12,549
Taxes on income 379 826 2,063 2,877
--- --- ----- -----
Income after taxes
on income 2,199 3,682 7,525 9,672
Equity in losses
(earnings) of
affiliates, net 11 13 (14) (48)
--- --- --- ---
Net income 2,188 3,669 7,539 9,720
Net income (loss)
attributable to
non-controlling
interests (18) 43 (180) 276
--- --- ---- ---
Net income attributable
to Shamir Optical
Industry Ltd.
Shareholders $2,206 $3,626 $7,719 $9,444
====== ====== ====== ======
Net earnings per share:
Basic $0.13 $0.22 $0.47 $0.58
===== ===== ===== =====
Diluted $0.13 $0.22 $0.47 $0.57
===== ===== ===== =====
Number of shares:
Basic 16,424 16,424 16,424 16,424
Dilutive 16,527 16,546 16,532 16,499
(1) Amounts have been reclassified to reflect the implementation of
SFAS No. 160, Non-controlling Interests in Consolidated Financial
Statements, an amendment of ARB No. 151.
SHAMIR OPTICAL INDUSTRY LTD.
Reconciliation of Non-GAAP Operating Income and Net Income
(US dollars in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------- -----------------
2008 2009 2008 2009
---- ---- ---- ----
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Operating income $2,947 $4,843 $10,457 $12,786
Non-GAAP adjustment:
Stock based
compensation (45) (60) (593) (372)
Amortization of
intangible assets (345) (272) (1,036) (761)
Compensation to
former Chief
Executive Officers (434) - (434) (303)
---- --- ---- ----
Non-GAAP operating
income $3,771 $5,175 $12,520 $14,222
====== ====== ======= =======
Net income attributable
to Shamir Optical
Industry Ltd.
Shareholders $2,206 $3,626 $7,719 $9,444
Non-GAAP adjustment:
Stock based
compensation (45) (60) (593) (372)
Amortization of
intangible assets,
net (264) (207) (820) (579)
Compensation to
former Chief
Executive
Officers, net (378) - (378) (227)
---- --- ---- ----
Non-GAAP net income
attributable to
Shamir Optical
Industry Ltd.
Shareholders $2,893 $3,893 $9,510 $10,622
====== ====== ====== =======
Net earnings per share:
Basic $0.18 $0.24 $0.58 $0.65
===== ===== ===== =====
Diluted $0.18 $0.24 $0.58 $0.64
===== ===== ===== =====
Number of shares:
Basic 16,424 16,424 16,424 16,424
Dilutive 16,527 16,546 16,532 16,499
SOURCE: Shamir Optical Industries Ltd.
Web site: http://www.shamir.co.il/