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/
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