KIBBUTZ SHAMIR, Israel, May 29 /PRNewswire-FirstCall/ -- Shamir Optical Industry Ltd. (“Shamir”), a leading provider of innovative products and technology to the progressive ophthalmic lens market, today announced unaudited financial results for the first quarter ended March 31, 2007.
For the quarter ended March 31, 2007, revenues increased 26.9% to $29.3 million, compared to revenues of $23.1 million for the same period of 2006. Gross profit for the quarter increased 16.0% to $15.4 million, or 52.5% of revenues, compared to gross profits of $13.3 million, or 57.5% of revenues for the same period last year.
For the quarter ended March 31, 2007, operating income increased 39.5% to $3.3 million, or 11.4% of revenues, from operating income of $2.4 million, or 10.4% of revenues for the same period last year. Net income for the quarter increased 11.4% to $2.3 million, or $0.14 per diluted share, compared to net income of $2.1 million for the comparable period in 2006.
For the quarter ended March 31, 2007, excluding the effects of non-cash stock-based compensation expenses, operating income was $3.7 million, or 12.5% of revenues, compared to operating income of $2.7 million, or 11.6% of revenues, for the same period last year.
Excluding the effects of non-cash stock-based compensation expenses, net income for the quarter was $2.6 million, or $0.16 per diluted share, an increase of 11.8% from net income of $2.4 million 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, 2007, the Company had cash and cash equivalents, including short-term investments of $39.0 million.
Commenting on its first quarter results, Giora Ben-Ze’ev, chief executive officer of Shamir, said, “Shamir generated strong revenue growth in all of its operating markets, with particular strength in the United States. In our European markets we continued to show revenue growth and we made additional operational inroads in the United Kingdom, France and Turkey.”
Mr. Ben-Ze’ev added, “Our ongoing investments are intended to continue to help us meet our customers’ high expectations for quality. To that end, our newly established and acquired laboratories in Israel and Mexico are performing well. In the beginning of 2007 we have completed the acquisition of approximately 26% of a laboratory in Thailand. These laboratories clearly exhibit our key competitive advantage of being able to develop and execute a long-term vision. We are confident that these laboratories will support Shamir’s global growth.”
Mr. Ben-Ze’ev concluded, “During the first quarter Shamir demonstrated its continued focus and execution of providing innovative progressive lenses and molds to a growing network of optical laboratories, opticians and optical lens manufacturers. Our focus on solid execution continues, our business remains strong and we believe we are well positioned for the future.”
For the fiscal year ending on December 31, 2007, Shamir currently estimates revenue growth in the range of 10%-18%, reconfirming previously announced forecasts.
Conference Call:
Shamir has scheduled a conference call for 9:00 a.m. today to discuss first quarter results. To participate in the call, please dial 888-802-8571 (U.S. and Canada) or 973-582-2794 (International). The conference ID for this event is 8799709. For those unable to participate there will be replay available from 12:00 p.m. EDT on May 29, 2007 through 11:59 p.m. EDT, June 5, 2007. Please call: 1-877-519-4471 (U.S. and Canada) 1-973-341-3080 (International). The ID code for the replay is 8799709.
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, 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 progressive 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(TM), Shamir Piccolo(TM), Shamir Office(TM), Shamir Nano(TM) and Shamir Autograph(TM). 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 Worldwide +972-3-516-7620 212-896-1249/212-896-1236 roni@km-ir.co.iljgoldberger@kcsa.com/mcsaby@kcsa.comm SHAMIR OPTICAL INDUSTRY LTD. Consolidated Balance Sheets (US dollars in thousands, except share As of As of and per share data) December 31, March 31, ------------- ------------- 2006 2007 ------------- ------------- (Unaudited) (Unaudited) Cash and cash equivalents $23,205 $18,260 Short-term investment 16,911 20,771 Trade receivables (1) 23,918 29,726 Other receivables and prepaid expenses 6,552 7,474 Inventory 27,898 25,471 ------------- ------------- TOTAL CURRENT ASSETS 98,484 101,702 LONG-TERM INVESTMENTS: Severance pay fund 2,542 2,802 Long-term loan to a related party 1,324 92 Long-term loan to others 240 - Investments in affiliates 3,513 4,344 ------------- ------------- TOTAL LONG-TERM INVESTMENTS 7,619 7,238 PROPERTY, PLANT AND EQUIPMENT, NET 28,368 29,256 OTHER ASSETS 5,362 4,981 GOODWILL 7,178 7,176 ------------- ------------- TOTAL ASSETS $147,011 $150,353 ============= ============= CURRENT LIABILITIES: Short-term bank credit and loans $13,654 $13,686 Current maturities of long-term loans 4,428 4,456 Trade payables 8,930 10,613 Accrued expenses and other liabilities 11,559 11,150 ------------- ------------- TOTAL CURRENT LIABILITIES 38,571 39,905 LONG-TERM LIABILITIES: Long-term loans 22,299 21,884 Accrued severance pay 2,828 3,107 Deferred income taxes 1,287 1,189 ------------- ------------- TOTAL LONG-TERM LIABILITIES 26,414 26,180 MINORITY INTERESTS 2,223 2,143 ------------- ------------- SHAREHOLDERS’ EQUITY: Share capital Common shares of NIS 0.01 par value Authorized: 100,000,000 shares at December 31, 2006 and March 31, 2007; Issued and outstanding: 16,256,514 shares at December 31, 2006 and March 31, 2007 37 37 Additional paid-in capital 65,599 65,935 Accumulated other comprehensive income 958 963 Retained earnings 13,209 15,190 ------------- ------------- TOTAL SHAREHOLDERS’ EQUITY 79,803 82,125 ------------- ------------- TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $147,011 $150,353 ============= ============= (1) Net of allowance for doubtful accounts of $ 1,037 and $ 1,211 as of December 31, 2006 and March 31, 2007, respectively. SHAMIR OPTICAL INDUSTRY LTD. Consolidated Statements of Income (US dollars in thousands, except per share data) Three Months Ended March 31, ------------------------------- 2006 2007 ------------- ------------- (Unaudited) (Unaudited) Revenues, net $23,112 $29,338 Cost of revenues 9,827 13,927 ------------- ------------- Gross profit 13,285 15,411 Operating Expenses: Research and development costs 541 630 Selling and marketing expenses 7,772 8,308 General and administrative expenses 2,577 3,132 ------------- ------------- Total operating expenses 10,890 12,070 ------------- ------------- Operating income 2,395 3,341 Financial expenses and other, net 9 58 ------------- ------------- Income before taxes on income 2,386 3,283 Taxes on income 985 1,032 ------------- ------------- Income after taxes on income 1,401 2,251 Equity in losses of affiliates, net 12 29 Minority interest in (losses) of subsidiaries (685) (88) ------------- ------------- Net income $2,074 $2,310 ============= ============= Net earnings per share: Basic $0.13 $0.14 ============= ============= Diluted $0.13 $0.14 ============= ============= Number of shares: Basic 16,257 16,257 Dilutive 16,555 16,542 SHAMIR OPTICAL INDUSTRY LTD. Reconciliation of Non-GAAP Operating Income and Net Income (US dollars in thousands, except per share data) Three Months Ended March 31, ------------------------------- 2006 2007 ------------- ------------- (Unaudited) (Unaudited) Operating income $2,395 $3,341 Non-GAAP adjustment: Stock based compensation (293) (336) ------------- ------------- Non-GAAP operating income $2,688 $3,677 ============= ============= Net income $2,074 $2,310 Non-GAAP adjustment: Stock based compensation, net (293) (336) ------------- ------------- Non-GAAP net income $2,367 $2,646 ============= ============= Non-GAAP net earnings per share : Basic $0.15 $0.16 ============= ============= Diluted $0.14 $0.16 ============= ============= Number of shares: Basic 16,257 16,257 Dilutive 16,555 16,542
Shamir Optical Industry Ltd.
CONTACT: Investor Relations: Roni Gavrielov, KM / KCSA Investor Relations,+972-3-516-7620, roni@km-ir.co.il; Jeffrey Goldberger, +1-212-896-1249,jgoldberger@kcsa.com, or Marybeth Csaby, +1-212-896-1236, mcsaby@kcsa.comm,both of KCSA Worldwide
