Shamir Optical Industry
Shamir Optical Industry Ltd. Reports First Quarter 2009 Results
Thursday 14 May 2009
KIBBUTZ SHAMIR, Israel, May 14 /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 first quarter ended March 31, 2009.
For the quarter ended March 31, 2009, revenues were $33.9 million, compared with revenues of $38.0 million for the same period in 2008. Approximately $2.4 million of the decrease in revenues related to a decrease in the value of the Euro versus the US dollar between the comparable quarters. Gross profit for the quarter was $17.9 million, or 52.6% of revenues, compared with gross profit of $20.8 million, or 54.7% of revenues for the same period last year.
For the quarter ended March 31, 2009, operating income was $3.9 million, or 11.4% of revenues, compared with operating income of $4.3 million, or 11.2% of revenues for the same period last year.
Net income for the quarter was $2.2 million, compared with net income of $2.6 million for the same period in 2008. Net income attributable to Shamir's shareholders was $0.13 per diluted share, compared with $0.17 per diluted share for the same period in 2008.
For the quarter ended March 31, 2009, excluding the effect of non-cash stock-based compensation expenses and amortization of intangible assets, operating income was $4.3 million, or 12.6% of revenues, compared with operating income of $4.8 million, or 12.7% of revenues, for the same period last year.
Excluding the effect of non-cash stock-based compensation expenses and amortization of intangible assets, net of tax, net income attributable to Shamir's shareholders for the quarter was $2.5 million, or $0.15 per diluted share, compared with net income of $3.4 million, or $0.21 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 March 31, 2009, the Company had cash and cash equivalents, including short-term investments of $26.5 million.
Commenting on first quarter results, Eyal Hayardeny, chief executive officer of Shamir, said, "Shamir had a very good start in 2009. During the first quarter, we experienced favorable results, many of which reflect the changes we have instituted throughout our organization to effectuate improved sales and manufacturing capabilities."
Conference Call:
Shamir has scheduled a conference call for 10:00 a.m. ET today to discuss first 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 97394745. For those unable to participate there will be replay available from 1:00 p.m. ET on May 14, 2009 through 11:59 p.m. EDT, May 21, 2009. Please call: (800) 642-1687 (U.S. and Canada) (706) 645-9291 (International). The ID code for the replay is 97394745.
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 and amortization of intangible assets, 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™ and Shamir Autograph™. 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
share and per share data) As of December 31, As of March 31,
2008 2009
(Unaudited) (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $18,276 $16,269
Short-term investment 7,187 10,185
Trade receivables (1) 30,331 33,254
Other receivables and prepaid
expenses 8,469 8,787
Inventory 26,063 24,115
TOTAL CURRENT ASSETS 90,326 92,610
LONG-TERM INVESTMENTS:
Severance pay fund 2,584 2,427
Long-term receivables 813 791
Investments in affiliates 2,085 2,108
TOTAL LONG-TERM INVESTMENTS 5,482 5,326
PROPERTY, PLANT AND EQUIPMENT, NET 38,617 36,433
OTHER ASSETS 5,902 5,441
GOODWILL 9,169 9,226
TOTAL ASSETS $149,496 $149,036
CURRENT LIABILITIES:
Short-term bank credit and loans $11,597 $11,368
Current maturities of long-term loans 10,403 7,227
Trade payables 8,876 11,479
Accrued expenses and other liabilities 11,680 12,290
TOTAL CURRENT LIABILITIES 42,556 42,364
LONG-TERM LIABILITIES:
Long-term loans 9,800 9,010
Capital leases 3,393 2,993
Accrued severance pay 3,172 2,945
Other long-term liabilities 634 581
Deferred income taxes 1,922 1,665
TOTAL LONG-TERM LIABILITIES 18,921 17,194
EQUITY:
Share capital
Common shares of NIS 0.01 par value
Authorized: 100,000,000 shares at
December 31, 2008 and March 31,
2009; Issued and outstanding:
16,423,740 shares at December 31,
2008 and March 31, 2009 37 37
Additional paid-in capital 67,362 67,509
Accumulated other comprehensive income (2,637) (3,454)
Retained earnings 22,007 24,129
Total Shamir Optical Industry Ltd.
Shareholders' equity 86,769 88,221
Non-controlling interests 1,250 1,257
TOTAL EQUITY 88,019 89,478
TOTAL LIABILITIES AND EQUITY $149,496 $149,036
(1) Net of allowance for doubtful accounts of $2,159 and $2,099
as of December 31, 2008 and March 31, 2009, respectively.
Three Months Ended March 31,
2008 (1) 2009
(Unaudited) (Unaudited)
Revenues, net $37,998 $33,920
Cost of revenues 17,225 16,065
Gross profit 20,773 17,855
Operating Expenses:
Research and development costs 874 741
Selling and marketing expenses 11,667 9,865
General and administrative expenses 3,982 3,380
Total operating expenses 16,523 13,986
Operating income 4,250 3,869
Financial expenses and other, net 74 833
Income before taxes on income 4,176 3,036
Taxes on income 1,557 867
Income after taxes on income 2,619 2,169
Equity in earnings of affiliates, net (10) (27)
Net income 2,629 $2,196
Net income (loss) attributable to
non-controlling interests (263) 74
Net income attributable to Shamir Optical
Industry Ltd. Shareholders $2,892 $2,122
Net earnings per share:
Basic $0.18 $0.13
Diluted $0.17 $0.13
Number of shares:
Basic 16,424 16,424
Dilutive 16,539 16,453
(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.
Three Months Ended March 31,
2008 2009
(Unaudited) (Unaudited)
Operating income $4,250 $3,869
Non-GAAP adjustment:
Stock based compensation 274 147
Amortization of intangible assets 319 244
Non-GAAP operating income $4,843 $4,260
Net income attributable to Shamir Optical
Industry Ltd. Shareholders $2,892 $2,122
Non-GAAP adjustment:
Stock based compensation 274 147
Amortization of intangible assets, net 254 185
Non-GAAP net income attributable to Shamir
Optical Industry Ltd. Shareholders $3,420 $2,454
Net earnings per share:
Basic $0.21 $0.15
Diluted $0.21 $0.15
Number of shares:
Basic 16,424 16,424
Dilutive 16,539 16,453
SOURCE: Shamir Optical Industry Ltd.