KIBBUTZ SHAMIR, Israel, Nov. 26 /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, 2008.
For the quarter ended September 30, 2008, revenues increased by 16.8% to $36.1 million, compared to $30.9 million for the third quarter of 2007. Gross profit for the quarter increased by 17.5% to $19.0 million, or 52.7% of revenues, compared to gross profit of $16.2 million, or 52.3% of revenues for the same period last year.
For the quarter ended September 30, 2008, operating income was $2.9 million, or 8.2% of revenues, compared to operating income of $3.2 million, or 10.2% of revenues for the same period last year. Net income for the quarter was $2.2 million, or $0.13 per diluted share, compared to net income of $2.3 million for the comparable period in 2007. For the quarter, operating and net income were negatively impacted by approximately $0.4 million due to a one time compensation payment to the Company's former CEO.
Excluding the effects of non-cash stock-based compensation expenses, amortization of intangible assets and one-time compensation to the Company's former CEO, non-GAAP operating income was $3.8 million, or 10.4% of revenues, compared to non-GAAP operating income of $3.7 million, or 11.9% of revenues, for the same period of 2007.
Excluding the effects of non-cash stock-based compensation expenses, amortization of intangible assets and one-time compensation to the former CEO, net of tax, non-GAAP net income for the quarter increased 4.1% to $2.9 million, or $0.18 per diluted share, from $2.8 million for the comparable period in 2007.
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 $25.1 million.
Commenting on the results, Eyal Hayardeny, Chief Executive Officer of Shamir, said, "Shamir preformed well in the third quarter, particularly in light of an increasingly 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 for Shamir-branded products. Concurrent with these efforts, we continue to stress the importance of strict cost controls, which has always been a main component of our operating philosophy, but has become increasingly important during these difficult economic times."
Mr. Hayardeny continued, "With Altra coming under full ownership and operational control of Shamir during the quarter, we further advanced our European distribution network. In addition, we are now in a position to exact greater operational and cost efficiencies throughout our European operations. With the team we currently have in place, we are confident that we can continue to expand our footprint throughout the region and in turn gain strong returns on this investment."
Mr. Hayardeny concluded, "With the widening of the economic difficulties throughout the world, it has become increasingly difficult to forecast our sales. With that said, we still believe we will be able to meet previously announced forecasts of estimate for growth in the range of 10%-16%, based on the December 2007 exchange rates and excluding the results of our Mexican operation."
Shamir has scheduled a conference call for 11:00 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 73332398. For those unable to participate there will be replay available from 12:00 p.m. ET on November 26, 2008 through 11:59 p.m. ET, December 3, 2008. Please call: 800-642-1687 (U.S. and Canada) 706-645-9291 (International). The ID code for the replay is 73332398.
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 one-time compensation to the former CEO, reflect our core operational results and are used by management internally to review Shamir's financial results. Shamir's management believes that amortization of intangible assets does not reflect our core operational and due to recent acquisitions these non-cash expenses becomes more material and should be excluded for non-GAAP measurement.
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(TM), Shamir Piccolo(TM), Shamir Office(TM), Shamir Nano(TM), Shamir Autograph(TM) and Shamir Smart(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.
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 September 30, 2007 2008 (Unaudited) CURRENT ASSETS: Cash and cash equivalents $18,953 $21,786 Short-term investment 14,375 3,338 Trade receivables(1) 30,719 34,699 Other receivables and prepaid expenses 7,523 11,130 Inventory 27,972 27,985 TOTAL CURRENT ASSETS 99,542 98,938 LONG-TERM INVESTMENTS: Severance pay fund 3,089 3,623 Long-term receivables 1,299 1,073 Investments in affiliates 4,437 1,495 TOTAL LONG-TERM INVESTMENTS 8,825 6,191 PROPERTY, PLANT AND EQUIPMENT, NET 39,170 41,536 OTHER ASSETS 5,412 6,945 GOODWILL 7,542 9,455 TOTAL ASSETS $160,491 $163,065 CURRENT LIABILITIES: Short-term bank credit and loans $15,950 $13,860 Current maturities of long-term loans 7,689 12,837 Trade payables 10,852 10,937 Accrued expenses and other liabilities 12,735 12,619 TOTAL CURRENT LIABILITIES 47,226 50,253 LONG-TERM LIABILITIES: Long-term loans 17,491 11,906 Capital leases 4,303 4,190 Accrued severance pay 3,337 4,284 Other long-term liabilities 753 789 Deferred income taxes 1,358 2,199 TOTAL LONG-TERM LIABILITIES 27,242 23,368 MINORITY INTERESTS 800 1,322 SHAREHOLDERS' EQUITY: Share capital Common shares of NIS 0.01 par value Authorized: 100,000,000 shares at December 31, 2007 and September 30, 2008; Issued and outstanding: 16,423,740 shares at December 31, 2007 and September 30, 2008 37 37 Additional paid-in capital 66,629 67,222 Accumulated other comprehensive income 1,628 215 Retained earnings 16,929 20,648 TOTAL SHAREHOLDERS' EQUITY 85,223 88,122 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $160,491 $163,065 (1) Net of allowance for doubtful accounts of $ 2,140 and $2,256 as of December 31, 2007 and September 30, 2008, 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, 2007 2008 2007 2008 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues, net $30,934 $36,118 $89,823 $111,171 Cost of revenues 14,747 17,098 42,622 51,272 Gross profit 16,187 19,020 47,201 59,899 Operating Expenses: Research and development costs 639 868 1,901 2,607 Selling and marketing expenses 8,961 10,472 26,469 33,527 General and administrative expenses 3,418 4,733 9,628 13,308 Total operating expenses 13,018 16,073 37,998 49,442 Operating income 3,169 2,947 9,203 10,457 Financial expenses (income) and other, net (25) 369 133 869 Income before taxes on income 3,194 2,578 9,070 9,588 Taxes on income 1,277 379 3,352 2,063 Income after taxes on income 1,917 2,199 5,718 7,525 Equity in losses (earnings) of affiliates, net 16 11 19 (14) Minority interest in losses of subsidiaries (402) (18) (934) (180) Net income $2,303 $2,206 $6,633 $7,719 Net earnings per share: Basic $0.14 $0.13 $0.41 $0.47 Diluted $0.14 $0.13 $0.40 $0.47 Number of shares: Basic 16,418 16,424 16,311 16,424 Dilutive 16,568 16,527 16,553 16,532 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, 2007 2008 2007 2008 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Operating income $3,169 $2,947 $9,203 $10,457 Non-GAAP adjustment: Stock based compensation (248) (45) (741) (593) Amortization of intangible assets (277) (344) (757) (1,035) Compensation to former CEO - (434) - (434) Non-GAAP operating income $3,694 $3,770 $10,701 $12,519 Net income $2,303 $2,206 $6,633 $7,719 Non-GAAP adjustment: Stock based compensation (248) (45) (741) (593) Amortization of intangible assets, net (228) (265) (616) (820) Compensation to former CEO, net - (378) - (378) Non-GAAP net income $2,779 $2,894 $7,990 $9,510 Net earnings per share: Basic $0.17 $0.18 $0.49 $0.58 Diluted $0.17 $0.18 $0.48 $0.58 Number of shares: Basic 16,418 16,424 16,311 16,424 Dilutive 16,568 16,527 16,553 16,532
|SOURCE Shamir Optical Industry Ltd.|
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