Shamir Optical Industry
Shamir Optical Industry Ltd. Reports Second Quarter 2009 Results
Thursday 13 August 2009
KIBBUTZ SHAMIR, Israel, Aug. 13 /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 second quarter ended June 30, 2009.
For the quarter ended June 30, 2009, revenues were $35.2 million, compared with revenues of $37.1 million for the same period in 2008. The decrease in revenues was mainly due to the decrease in the value of the Euro versus the US dollar between the comparable quarters. Gross profit for the quarter was $19.0 million, or 53.8% of revenues, compared with gross profit of $20.1 million, or 54.3% of revenues for the same period last year.
For the quarter ended June 30, 2009, operating income increased by 25.0% to $4.1 million, or 11.6% of revenues, compared with operating income of $3.3 million, or 8.8% of revenues for the same period last year. Net income for the quarter increased by 39.1% to $3.9 million compared with net income of $2.8 million for the comparable period in 2008. Net income attributable to Shamir's shareholders was $0.22 per diluted share, compared with $0.16 per diluted share for the same period in 2008
For the quarter ended June 30, 2009, excluding the effect of non-cash stock-based compensation expenses, amortization of intangible assets and compensation to the Company's former chief executive officers, operating income increased by 22.5% to $4.8 million, or 13.6% of revenues, compared with operating income of $3.9 million, or 10.5% of revenues, for the same period last year.
Excluding the effect of non-cash stock-based compensation expenses, amortization of intangible assets and compensation to the Company's former chief executive officers, net of tax, net income attributable to Shamir's shareholders for the quarter was $4.3 million, or $0.26 per diluted share, compared with net income of $3.2 million, or $0.19 per diluted share for the same period last year.
The reconciliation of GAAP operating income and GAAP net income to non-GAAP operating income and non-GAAP net income is set forth below.
As of June 30, 2009, the Company had cash and cash equivalents, including short-term investments of $27.4 million.
Commenting on the results, Amos Netzer, Chief Executive Officer of Shamir, said, "During the past few years, Shamir has worked diligently, not only to expand our geographic footprint, but also to improve our manufacturing capabilities and solidify and expand our sales and marketing capabilities. The positive effect of these efforts is reflected in our favorable results for the second quarter. In Europe, we generated improved sales and operating results and our operations in the United States continued to perform well."
Mr. Netzer added, "To support our long range goals of expanding our selling and manufacturing capabilities, in July 2009 we increased our ownership in our lab in Thailand from 40.4% to 51%. We are very encouraged with the performance of our investment in Thailand and are pleased to have been able to increase our ownership in the subsidiary."
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 helped us achieve positive performance thus far this year. However, due to the uncertainty in the global economic landscape and the remaining challenges, our visibility for the second half of 2009 is unclear."
Conference Call:
Shamir has scheduled a conference call for 11:00 a.m. today to discuss second 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 23500382. For those unable to participate there will be replay available from 12:00 p.m. EDT on August 13, 2009 through 11:59 p.m. EDT, August 20, 2009. Please call: 800-642-1687 (U.S. and Canada) 706-645-9291 (International). The ID code for the replay is 23500382.
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, compensation to the former Chief Executive Officers 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™, 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.
Investor Relations Contacts:
Roni Gavrielov Jeffrey Goldberger/Marybeth Csaby
KM / KCSA Investor Relations KCSA Strategic Communications
+972-3-516-7620 212-896-1249/212-896-1236
roni@km-ir.co.il jgoldberger@kcsa.com / mcsaby@kcsa.com
(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 June 30,
2008 2009
------------------ --------------
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $18,276 $12,862
Short-term investment 7,187 14,499
Trade receivables (1) 30,331 34,469
Other receivables and prepaid expenses 8,469 8,150
Inventory 26,063 25,395
------ ------
TOTAL CURRENT ASSETS 90,326 95,375
LONG-TERM INVESTMENTS:
Severance pay fund 2,584 2,703
Long-term receivables 813 417
Investments in affiliates 2,085 2,661
----- -----
TOTAL LONG-TERM INVESTMENTS 5,482 5,781
PROPERTY, PLANT AND EQUIPMENT, NET 38,617 36,518
OTHER ASSETS 5,902 5,334
GOODWILL 9,169 9,583
----- -----
TOTAL ASSETS $149,496 $152,591
======== ========
CURRENT LIABILITIES:
Short-term bank credit and loans $11,597 $10,185
Current maturities of long-term loans 10,403 6,398
Trade payables 8,876 11,984
Accrued expenses and other liabilities 11,680 13,158
------ ------
TOTAL CURRENT LIABILITIES 42,556 41,725
LONG-TERM LIABILITIES:
Long-term loans 9,800 7,270
Capital leases 3,393 2,846
Accrued severance pay 3,172 3,179
Other long-term liabilities 634 547
Deferred income taxes 1,922 1,754
----- -----
TOTAL LONG-TERM LIABILITIES 18,921 15,596
EQUITY:
Share capital
Common shares of NIS 0.01 par value
Authorized: 100,000,000 shares at
December 31, 2008 and June 30, 2009;
Issued and outstanding: 16,423,740
shares at December 31, 2008 and June
30, 2009 37 37
Additional paid-in capital 67,362 67,674
Accumulated other comprehensive income (2,637) (1,890)
Retained earnings 22,007 27,825
------ ------
Total Shamir Optical Industry Ltd.
Shareholders' equity 86,769 93,646
Non-controlling interests 1,250 1,624
----- -----
TOTAL EQUITY 88,019 95,270
------ ------
TOTAL LIABILITIES AND EQUITY $149,496 $152,591
======== ========
(1) Net of allowance for doubtful accounts of $ 2,159 and $ 2,451 as of December 31, 2008 and June 30, 2009, respectively.
SHAMIR OPTICAL INDUSTRY LTD.
Consolidated Statements of Income
(US dollars in thousands,
except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ---------------------
2008 (1) 2009 2008 (1) 2009
--------- --------- --------- ---------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues, net $37,055 $35,234 $75,053 $69,154
Cost of revenues 16,949 16,273 34,174 32,338
------ ------ ------ ------
Gross profit 20,106 18,961 40,879 36,816
Operating Expenses:
Research and development
costs 865 789 1,739 1,530
Selling and marketing
expenses 11,388 10,283 23,055 20,148
General and
administrative expenses 4,593 3,815 8,575 7,195
----- ----- ----- -----
Total operating expenses 16,846 14,887 33,369 28,873
------ ------ ------ ------
Operating income 3,260 4,074 7,510 7,943
Financial expenses (income)
and other, net 426 (931) 500 (98)
--- ---- --- ---
Income before taxes on
income 2,834 5,005 7,010 8,041
Taxes on income 127 1,184 1,684 2,051
--- ----- ----- -----
Income after taxes on
income 2,707 3,821 5,326 5,990
Equity in earnings of
affiliates, net 15 34 25 61
-- -- -- --
Net income 2,722 3,855 5,351 6,051
Net income (loss)
attributable to
non-controlling interests 101 159 (162) 233
--- --- ---- ---
Net income attributable to
Shamir Optical Industry
Ltd. Shareholders $2,621 $3,696 $5,513 $5,818
====== ====== ====== ======
Net earnings per share:
Basic $0.16 $0.23 $0.34 $0.35
===== ===== ===== =====
Diluted $0.16 $0.22 $0.33 $0.35
===== ===== ===== =====
Number of shares:
Basic 16,424 16,424 16,424 16,424
Dilutive 16,532 16,475 16,535 16,475
(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 Six Months Ended
June 30, June 30,
--------------------- ---------------------
2008 2009 2008 2009
--------- --------- --------- ---------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Operating income $3,260 $4,074 $7,510 $7,942
Non-GAAP adjustment:
Stock based compensation (274) (165) (548) (312)
Amortization of intangible
assets (373) (249) (691) (490)
Compensation to former
Chief Executive Officers - (303) - (303)
--- ---- --- ----
Non-GAAP operating income $3,907 $4,791 $8,749 $9,047
====== ====== ====== ======
Net income attributable
to Shamir Optical
Industry Ltd.
Shareholders $2,621 $3,696 $5,513 $5,818
Non-GAAP adjustment:
Stock based compensation (274) (165) (548) (312)
Amortization of intangible
assets, net (302) (187) (556) (372)
Compensation to former
Chief Executive Officers,
net - (227) - (227)
--- ---- --- ----
Non-GAAP net income
attributable to Shamir
Optical Industry Ltd.
Shareholders $3,197 $4,275 $6,617 $6,729
====== ====== ====== ======
Net earnings per share:
Basic $0.19 $0.26 $0.40 $0.41
===== ===== ===== =====
Diluted $0.19 $0.26 $0.40 $0.41
===== ===== ===== =====
Number of shares:
Basic 16,424 16,424 16,424 16,424
Dilutive 16,532 16,475 16,535 16,475
SOURCE Shamir Optical Industry Ltd.
SOURCE: Shamir Optical Industry Ltd.