Shamir Optical Industry Ltd. (US Headquarters) Reports Fourth Quarter and Year-End 2010 Results
Published: Mar 14, 2011
KIBBUTZ SHAMIR, Israel, March 14, 2011 /PRNewswire/ -- 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 fourth quarter and year ended December 31, 2010.
For the quarter ended December 31, 2010, revenues increased 5.4% to $39.1 million, compared with revenues of $37.1 million for the same period in 2009. Gross profit for the quarter was $21.1 million, or 54.0% of revenues, compared with gross profit of $20.4 million, or 55.0% of revenues for the same period last year.
For the quarter ended December 31, 2010, operating income was $3.3 million, or 8.6% of revenues, compared with operating income of $4.5 million, or 12.3% of revenues for the same period last year. The reduction in operating income year-over-year was primarily due to the mix of products sold which negatively affected gross profit, costs associated with the Company's previously announced transaction with Essilor International, restructuring costs in France and an increase in marketing and selling expenses.
Net income for the quarter was $3.0 million, compared with net income of $3.5 million for the same period in 2009. Net income attributable to Shamir's shareholders was $2.8 million or $0.16 per diluted share, compared with $3.3 million or $0.20 per diluted share for the same period in 2009.
Excluding the effect of non-cash stock-based compensation expenses, amortization of intangible assets, restructuring costs in France in 2010 and Essilor transaction costs in 2010, operating income for the quarter was $4.6 million, or 11.8% of revenues, compared with operating income of $5.0 million, or 13.5% of revenues, for the same period last year.
Excluding the effect of non-cash stock-based compensation expenses, amortization of intangible assets, accretion of redeemable non-controlling interest, restructuring costs in France in 2010 and Essilor transaction costs in 2010, all net of tax, net income attributable to Shamir's shareholders for the quarter was $3.9 million, or $0.22 per diluted share, compared with net income of $3.6 million, or $0.22 per diluted share for the same period last year.
For the year ended December 31, 2010, revenues increased 11.0% to $158.0 million, compared with revenues of $142.4 million for the year 2009. Gross profit for the year 2010 was $86.5 million, or 54.8% of revenues, compared with gross profit of $76.9 million, or 54.0% of revenues for last year.
For the year ended December 31, 2010, operating income increased 14.0% to $19.8 million, or 12.5% of revenues, compared with operating income of $17.3 million, or 12.2% of revenues for last year.
Net income for the year increased 17.5% to $15.6 million, compared with net income of $13.3 million for the year 2009. Net income attributable to Shamir's shareholders increased 15.8% to $14.8 million or $0.87 per diluted share, compared with $12.8 million or $0.77 per diluted share for the year 2009.
Excluding the effect of non-cash stock-based compensation expenses, amortization of intangible assets, restructuring costs in France in 2010, Essilor transaction costs in 2010 and compensation to the Company's former chief executive officer in 2009, operating income for the year was $23.4 million, or 14.8% of revenues, compared with operating income of $19.2 million, or 13.5% of revenues, for last year.
Excluding the effect of non-cash stock-based compensation expenses, amortization of intangible assets, accretion of redeemable non-controlling interest, restructuring costs in France in 2010, Essilor transaction costs in 2010 and compensation to the Company's former chief executive officer in 2009, all net of tax, net income attributable to Shamir's shareholders for the year increased 24.2% to $17.7 million, or $1.05 per diluted share, compared with net income of $14.3 million or $0.86 per diluted share for 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 December 31, 2010, the Company had cash and cash equivalents, including short-term investments of $28.4 million.
Commenting on the results, Amos Netzer, Chief Executive Officer of Shamir, said, "I am satisfied with our results for 2010. During the year, we continued to successfully increase the recognition for Shamir-branded products, a testament to the strength of our organic growth and strategic acquisition strategy. We also continued to have similar success with our efforts to optimize our operations as was demonstrated in the fourth quarter in France, where we went from a two-subsidiary structure, down to a single, more efficient structure."
Mr. Netzer continued, "Most recently, we expanded our reach in Israel through the acquisition of the operations of a local distributor. Through this action, we expect to achieve improved access to customers and to drive increased sales volume. In addition, we expect to complete the acquisition of the operation of a local Italian laboratory in the second quarter to expand our footprint in Italy."
Shamir has scheduled a conference call for 11:00 a.m. ET today to discuss fourth 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 47057180. For those unable to participate there will be a replay available from 2:00 p.m. ET on March 14, 2011 through 11:59 p.m. ET, March 21, 2011. Please call: (800) 642.1687 (U.S. and Canada) or (706) 645.9291 (International). The ID code for the replay is 47057180.
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 reflect the Company's core operational results and are used by management internally to review Shamir's financial results.
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 Creation, Shamir Piccolo, Shamir Office, Shamir Autograph, Shamir Attitude 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:
Jeffrey Goldberger/Marybeth Csaby
KM / KCSA Investor Relations
KCSA Strategic Communications
SHAMIR OPTICAL INDUSTRY LTD.
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