Shamir Optical Industry Ltd. (MM) (NASDAQ:SHMR)
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Shamir Optical Industry Ltd. Reports First Quarter 2005 Results
Revenues of $20.7 Million
KIBBUTZ SHAMIR, Israel, May 17 /PRNewswire-FirstCall/ -- Shamir Optical
Industry Ltd. (NASDAQ:SHMR), a leading provider of innovative products and
technology to the progressive ophthalmic lens market, today announced financial
results for the first quarter ended March 31, 2005.
For the first quarter of 2005, revenues were $20.7 million, an increase of
32.9% compared to revenues of $15.5 million for the first quarter of 2004.
Gross profit for the quarter was $10.9 million, or 53.0% of revenues, an
increase of 40.8% from gross profit of $7.8 million, or 50.0% of revenues in
the same period last year.
Operating income was $3.8 million, or 18.2% of revenues for the first quarter
of 2005, representing an increase of 36.9% from operating income of $2.7
million, or 17.6% of revenues in the same period last year. Net income for the
quarter was $1.9 million or $0.14 per diluted share compared to $1.9 million
for the comparable period in 2004. Pro forma net income was $1.9 million an
increase of 19.5 % compared to $1.6 million for the comparable period in 2004.
Excluding the effects of non-cash stock-based compensation expenses, for the
first quarter of 2005, operating income was $3.8 million, or 18.5% of revenues.
This was an increase of 39.6% from operating income of $2.7 million, or 17.6%
of revenues in the same period last year. Excluding the effects of non-cash
stock-based compensation expenses and non-cash tax effect of changes in status
from a non-taxable to a taxable entity, net income for the quarter was $2.4
million, an increase of 50.4% compared to $1.6 million for the comparable
period in 2004. The reconciliation of GAAP operating income and net income to
adjusted operating income and adjusted net income is set forth below in this
release.
On March 11, 2005, Shamir completed its initial public offering, raising net
proceeds of $42 million. As of March 31, 2005, the Company had cash and cash
equivalents of $47 million. Commenting on the results, Giora Ben-Zeev, Chief
Executive Officer of Shamir Optical said, "Our strong results for the first
quarter reflect the continued growth that we have experienced during the last 5
years. Positive market drivers include a strong demand shift from traditional
bifocal lenses to progressive lenses and positive demographic trends that
position our target market, people over the age of 45, as an increasingly large
percentage of the worldwide population. We believe that Shamir Optical's growth
can also be attributed to the success of our marketing initiatives, as well as
our focus on progressive lenses, which has enabled us to develop lenses that
are considered among the best-performing."
Mr. Ben-Zeev continued, "Part of Shamir Optical's growth strategy is to expand
our presence in the United States and Europe, the two largest and most
developed markets for our products. In the United States, we experienced
significant organic growth during the first quarter. In Europe, we began to
see the expansion of our customer base particularly in the United Kingdom as a
result of our acquisition of Cambridge Optical Group on September 1, 2004."
Mr. Ben-Zeev concluded, "We believe that through our broad distribution
channels, technological leadership, and expansion into key geographic markets,
Shamir Optical will maintain its strong position in the progressive lens
market, and will continue to grow in the years to come."
Conference Call:
Shamir Optical has scheduled a conference call for 9 a.m. EDT today, May 17, to
discuss the first quarter results. To participate in the call, please dial
(800) 247-9979 (U.S. and Canada), or (973) 409-9254 (International). For those
unable to participate there will be replay available from 12:00 p.m. EDT on May
17, 2005 through 11:59 p.m. EDT, May 24, 2005. To listen to the replay, please
call: 1-877-519-4471 (U.S. and Canada), 1-973-341-3080 (International). The ID
code for the replay is 6040930.
The call will be available as a live, listen-only webcast at
http://www.kcsa.com/. An archive of the webcast will be available approximately
2 hours after the conclusion of the live call. To listen to the live call,
please go to the KCSA Web site at least 15 minutes prior to the scheduled start
time to register, download and install any necessary audio software.
About non - GAAP financial measures
This press release includes a financial measure defined as a non-GAAP financial
measure by the Securities and Exchange Commission: adjusted operating income
and adjusted net income. This measure may be different from non-GAAP financial
measures used by other companies. 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 Optical Industry Ltd. believes that adjusted operating
income and adjusted net income provides meaningful supplemental information
that these numbers exclude the non-cash, one-time charge related to tax effects
from when we changed the structure of our company from an A.C.S. into an
Israeli limited liability company.
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), 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
This press release does not constitute an offer to sell or the solicitation of
an offer to buy, nor shall there be any sale of, any securities described
herein in any state in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such
state.
Statements concerning Shamir's business outlook or future economic performance;
product introductions and plans and objectives related thereto; and statements
concerning 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 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; possible business
disruptions from acquisitions; 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.
SHAMIR OPTICAL INDUSTRY LTD
Consolidated Statements of Income
(US dollars in thousands, except share and per share data)
Three Months Ended March 31,
2004 2005
Revenues, net $15,537 $ 20,654
Cost of revenues 7,768 9,713
Gross profit 7,769 10,941
Operating Expenses:
Research and development costs 389 434
Selling and marketing expenses 3,959 5,130
General and administrative expenses 679 1,550
Stock based compensation - 72
Total operating expenses 5,027 7,186
Operating income 2,742 3,755
Financial expenses (income) and other, net 94 (54)
Income before taxes on income 2,648 3,809
Taxes on income 478 1,661
Income after taxes on income 2,170 2,148
Equity in losses of affiliates, net 23 -
Minority interest in earnings of subsidiaries 204 268
Net income $1,943 $1,880
Pro forma - additional taxes on income 370 -
Pro forma net income $1,573 $1,880
Non-GAAP adjustment:
Non-cash tax expenses related to
change of tax status - (414)
Non-GAAP net income $1,573 $2,294
Net earnings per share:
Basic (*) $0.14
Diluted (*) $0.14
Non-GAAP net earnings per share:
Basic (*) $0.17
Diluted (*) $0.17
(*) The company did not present EPS data for the three months ended
March 31, 2004 in its Form F-1.
SHAMIR OPTICAL INDUSTRY LTD
Consolidated Balance Sheets
(US dollars in thousands, except share and per share data)
As of As of
December 31, March 31,
2004 2005
CURRENT ASSETS:
Cash and cash equivalents $6,235 $ 46,993
Short-term investment - 353
Trade receivables (1) 15,394 16,690
Other receivables and prepaid expenses 3,395 3,932
Inventory 16,296 15,051
TOTAL CURRENT ASSETS 41,320 83,019
LONG-TERM INVESTMENTS:
Severance pay fund 1,765 1,787
Investments in affiliates 666 703
TOTAL LONG-TERM INVESTMENTS 2,431 2,490
PROPERTY, PLANT AND EQUIPMENT, NET 15,609 15,692
OTHER ASSETS, NET 1,998 2,322
GOODWILL 3,986 3,944
TOTAL ASSETS $65,344 $107,467
CURRENT LIABILITIES:
Short-term bank credit and loans $10,986 $7,487
Current maturities of long-term loans 3,857 3,014
Trade payables 4,624 5,639
Dividend payable 5,201 4,127
Accrued expenses and other liabilities 8,531 9,398
TOTAL CURRENT LIABILITIES 33,199 29,665
LONG-TERM LIABILITIES:
Long-term loans 4,664 4,723
Accrued severance pay 2,049 2,145
Deferred taxes 432 423
TOTAL LONG-TERM LIABILITIES 7,145 7,291
MINORITY INTERESTS 7,370 7,397
TEMPORARY EQUITY
Issued and outstanding: 502,400 shares
at December 31, 2004 and no shares
at March 31, 2005 3,000 -
SHAREHOLDERS' EQUITY:
Share capital
Common shares of NIS 0.01 par value
Authorized: 12,711,332 shares at
December 31, 2004 and 100,000,00 shares
at March 31, 2005; Issued and outstanding:
12,208,932 shares at December 31, 2004 and
16,111,332 shares at March 31, 2005 29 37
Additional paid-in capital 10,053 62,740
Deferred stock compensation (844) (1,211)
Foreign currency translation adjustments 1,236 1,025
Retained earnings 4,156 523
TOTAL SHAREHOLDERS' EQUITY 14,630 63,114
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $65,344 $107,467
(1) net of allowance for doubtful accounts of $ 533 and $ 497 as of
December 31, 2004 and March 31, 2005, respectively
DATASOURCE: Shamir Optical Industry Ltd.
CONTACT: Investor Relations Contacts - Jeff Corbin, +1-212-896-1214,
, or Lee Roth, +1-212-896-1209, , both of KCSA
Worldwide; or Roni Gavrielov, , or Miri Segal,
, both of KM KCSA Investor Relations, +972-3-516-7620, for
Shamir Optical Industry Ltd.
Web site: http://www.kcsa.com/