Camtek Announces Strong Growth in First Quarter 2011 Results

Sequential Quarterly Revenue Increase of 8% and Year Over Year Increase of 56%

MIGDAL HAEMEK, Israel, April 28, 2011 — (PRNewswire) — Camtek Ltd. (NASDAQ and TASE: CAMT), today announced its financial results for the quarter ended March 31, 2011.

Main Financial Highlights of the First Quarter

- Revenues of $27.5 million, representing a sequential quarterly increase of 8% and a year-over-year increase of 56%.

- Non-GAAP gross margin of 47.0% for the quarter compared with 41.0% in the first quarter of last year; GAAP gross margin of 46.6% for the current quarter.

- Both non-GAAP operating income and net income of $3.1 million in the quarter; GAAP operating income of $3.0 million and GAAP net income of $2.4 million.

- Non-GAAP earnings per diluted share of $0.10; GAAP earnings per diluted share of $0.08.

Results for the three months ended March 31, 2011 on a non-GAAP basis, exclude the following items: (i) Expenses with respect to the acquisition of SELA and Printar; and (ii) share based compensation expenses. A re-conciliation between the GAAP and non-GAAP results appears in the tables at the end of this press release.

First Quarter 2011 Financial Results

Revenues for the first quarter of 2011 increased 56% to $27.5 million, compared to $17.6 million in the first quarter of 2010. Revenues grew 8% sequentially, and came in slightly above the formerly issued guidance range of between $25-27 million. The ongoing growth is as a result of the continued increase in demand from customers as well as the penetration into new customers and increasing sales of the Company's new products.

Gross profit on a GAAP basis in the quarter totaled $12.8 million (46.6% of revenues), compared with $7.0 million (40% of revenues) in the first quarter of 2010. Gross profit on a non-GAAP basis in the quarter totaled $12.9 million (47.0% of revenues), compared with $7.3 million (41% of revenues) in the first quarter of 2010.

Operating income on a GAAP basis in the quarter was $3.0 million (10.8% of revenues) compared with an operating loss of $0.4 million in the first quarter of 2010. Non-GAAP operating income was $3.1 million (11.5% of revenues) in the quarter compared with an operating loss of $0.1 million in the first quarter of 2010.

Net income on a GAAP basis in the first quarter of 2011 totaled $2.4 million, or $0.08 per diluted share, compared to a net loss of $0.9 million, or a loss of $0.03 per diluted share in the first quarter of 2010.

Net income on a non-GAAP basis in the first quarter of 2011 was $3.1 million, or $0.10 per diluted share, compared with a net loss of $0.3 million, or $0.01 per diluted share in the first quarter of 2010.

Cash and cash equivalents levels as of March 31, 2011 were $9.2 million with an additional amount of $5.2 million in restricted cash compared with $9.6 million and $5.2 million restricted cash at December 31, 2010.

Management Comment

Roy Porat, Camtek's Chief Executive Officer, commented: "We are very pleased with our strong results and it is a great start for 2011. This quarter's success was the result of our continuous efforts in reshaping our business that started eight quarters ago and has resulted in gradual growth since then. The growth has cemented our sound position in our legacy inspection businesses in the back-end semiconductor and PCB industries. We are also now moving from proving feasibility to actually establishing a position with our new front-end semiconductor inspection and sample preparation product lines."

Mr. Porat concluded: "For the second quarter of 2011, we anticipate flat to moderate growth with revenues of between $27-29 million."

Conference Call

Camtek will host a conference call today, April 28, 2011, at 10:00 am ET. Roy Porat, Chief Executive Officer and Mira Rosenzweig, Chief Financial Officer, will host the call and will be available to answer questions after presenting the results.

To participate, please call one of the following telephone numbers a few minutes before the start of the call.

    US:               1-888-668-9141   at 10:00 am Eastern Time
    Israel:              03-918-0609   at 5:00 pm Israel Time
    International:   +972-3-918-0609

For those unable to participate, the teleconference will be available for replay on Camtek's website at http://www.camtek.co.il beginning 24 hours after the call.

ABOUT CAMTEK LTD.

Camtek Ltd provides automated solutions dedicated for enhancing production processes and yield, enabling our customers new technologies in two industries; Semiconductors, Printed Circuit Board (PCB) & IC Substrates.

Camtek addresses the specific needs of these industries with dedicated solutions based on a wide and advanced platform of technologies including intelligent imaging, image processing, ion milling and digital material deposition. Camtek's solutions range from micro-to-nano by applying its technologies to the industry-specific requirements.

This press release is available at http://www.camtek.co.il.

This press release may contain projections or other forward-looking statements regarding future events or the future performance of the Company. These statements are only predictions and may change as time passes. We do not assume any obligation to update that information. Actual events or results may differ materially from those projected, including as a result of changing industry and market trends, reduced demand for our products, the timely development of our new products and their adoption by the market, increased competition in the industry, intellectual property litigation, price reductions as well as due to risks identified in the documents filed by the Company with the SEC.

Use of non-GAAP Measures

This press release provides financial measures that exclude certain items and are therefore not calculated in accordance with generally accepted accounting principles (GAAP). Management believes that these Non-GAAP financial measures provide meaningful supplemental information regarding our performance. The presentation of this non-GAAP 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 uses both GAAP and non-GAAP measures when evaluating the business internally and therefore felt it is important to make these non-GAAP adjustments available to investors.

    CAMTEK LTD. and its subsidiaries

    Consolidated Balance Sheets
    (In thousands)

                                                     March 31,  December 31,
                                                         2011          2010
                                                                                   U.S.  Dollars  (In  thousands)
        Assets

        Current  assets
        Cash  and  cash  equivalents                                                      9,218                  9,577
        Accounts  receivable,  net                                                      32,672                28,817
        Inventories                                                                                24,227                24,034
        Due  from  affiliates                                                                      844                      384
        Other  current  assets                                                                2,322                  2,414
        Deferred  tax  asset                                                                          54                        54

        Total  current  assets                                                              69,337                65,280

        Fixed  assets,  net                                                                    14,877                15,077

        Restricted  deposits  *                                                              5,196                  5,182
        Long  term  inventory                                                                  2,155                  2,304
        Deferred  tax  asset                                                                        152                      152
        Other  assets,  net                                                                          460                      460
        Intangible  assets,  net  **                                                      4,108                  4,163
        Goodwill                                                                                        3,653                  3,653

                                                                                                              15,724                15,914

        Total  assets                                                                              99,938                96,271

        Liabilities  and  shareholders'  equity

        Current  liabilities
        Short  term  bank  loans                                                              1,436                  1,409
        Accounts  payable  -  trade                                                      10,291                  9,761
        Long  term  bank  loans  -  current  portion                                433                      433
        Other  current  liabilities                                                    22,292                21,408

        Total  current  liabilities                                                    34,452                33,011

        Long  term  liabilities
        Long  term  bank  loans                                                                    650                      758
        Liability  for  employee  severance  benefits                          673                      626
        Other  long  term  liabilities  **                                            7,494                  7,884
                                                                                                                8,817                  9,268

        Total  liabilities                                                                    43,269                42,279

        Commitments  and  contingencies

        Shareholders'  equity
        Ordinary  shares  NIS  0.01  par  value,
        authorized  100,000,000  shares,
        31,425,945  issued  as  March  31,  2011  and
        31,370,359  as  of  December  31,  2010,
        outstanding  29,333,569
        as  of  March  31,  2011  and  29,277,983  as  of                          133                      132
        December  31,  2010
        Additional  paid-in  capital                                                  60,707                60,452
        Accumulated  losses                                                                  (2,273)              (4,694)
                                                                                                              58,567                55,890
        Treasury  stock,  at  cost  (2,092,376  as  of
        March  31,  2011  and  December  31,  2010)
                                                                                                              (1,898)              (1,898)

        Total  shareholders'  equity                                                  56,669                53,992

        Total  liabilities  and  shareholders'  equity                  99,938                96,271


        (*)    Bank  guarantee  against  credit  line  related  to  the  Rudolph
                  Technologies  appeal
        (**)  Relates  to  Printar  and  SELA  acquisitions



                                                                                                                                    Camtek  Ltd.

        Consolidated  Statements  of  Operations
        (in  thousands,  except  share  data)

                                                                                          Three  months  ended    Year  ended

                                                                                                      March  31,        December  31,
                                                                                              2011              2010                  2010
                                                                                                  U.S.  dollars

        Revenues                                                                  27,470          17,627              87,780
        Cost  of  revenues                                                  14,663          10,612              49,361

        Gross  profit                                                          12,807            7,015              38,419

        Research  and  development  costs                        3,779            3,086              12,906
        Selling,  general  and  administrative              6,063            4,341              20,662
        expenses

                                                                                            9,842            7,427              33,568

        Operating  income  (loss)                                      2,965              (412)              4,851

        Financial  expenses,  net                                        (408)            (432)            (1,478)

        Income  (loss)  before  income  taxes                  2,557              (844)              3,373

        Income  tax                                                                  (136)            (100)                (557)

        Net  income  (loss)                                                  2,421              (944)              2,816

        Earnings  (loss)  per  ordinary  share:

        Basic                                                                            0.08            (0.03)                0.10

        Diluted                                                                        0.08            (0.03)                0.09

        Weighted  average  number  of  ordinary
        shares  outstanding:

        Basic                                                                        29,300          29,242              29,259

        Diluted                                                                    30,112          29,242              30,360



        RECONCILIATION  OF  GAAP  TO  NON-GAAP  RESULTS

        (in  thousands,  except  share  data)

                                                                                          Three  months  ended    Year  ended

                                                                                                      March  31,        December  31,
                                                                                              2011              2010                  2010
                                                                                                  U.S.  dollars

        Reported  net  income  (loss)  on  GAAP  basis    2,421              (944)              2,816

        Acquisition  of  Sela  and  Printar  related
        expenses(1)                                                                  563                647                2,093

        Inventory  write-downs                                                  -                    -                    159

        Share-based  compensation                                        109                  41                    155
        Restructuring  expenses(2)                                          -                    -                    544

          Non-GAAP  net  income  (loss)                              3,093              (256)              5,767

          Gross  margin  on  GAAP  basis                                46.6%                40%                43.8%
          Reported  gross  profit  on  GAAP  basis          12,807            7,015              38,419

          Acquisition  of  Sela  and  Printar  related
          expenses(1)                                                                563                280                    731
          Inventory  write  off                                                    -                    -                    159
          Non  GAAP  gross  margin                                          47.0%                41%                44.8%
          Non-GAAP  gross  profit                                      12,910            7,295              39,309

          Reported  operating  income  (loss)  on  GAAP
          basis                                                                        2,965              (412)              4,851

          Acquisition  of  Sela  and  Printar  related
          expenses(1)                                                                  80                280                    731

          Inventory  write  off                                                    -                    -                    159

          Share-based  compensation                                      109                  41                    155
          Restructuring  expenses  (2)                                      -                    -                    544

          Non-GAAP  operating  income  (loss)                  3,154                  (91)            6,440


 

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